Wal-Mart Grows Organically, Responsibly
Wal-Mart’s announcement and subsequent ad campaign touting its organic product offerings certainly has gotten the attention of other retailers, manufacturers, industry organizations – and quite a few consumers, as well.
To date, those in organic products retailing have expressed little concern,
but that does not mean they are not keeping a close eye on what is going on
in Wal-Mart’s stores.
Walter Robb, co-president and chief operating officer at Whole Foods, told The Dallas Morning News, “I’m all over it, and so far I can tell you the impact is minimal.”
The fact that Wal-Mart may not have made a major dent in others’ sales of organic products should not necessarily bring a sense of comfort, said Sandra Skrovan, director of Retail Forward’s Wal-Mart program. She said Wal-Mart doesn’t get into a business unless it believes it can capture about a 30 percent market share. It accomplishes this, she said, by growing the category and grabbing market share from others.
“Wal-Mart is taking this seriously because mainstream grocery offers organics – and we all know how well Whole Foods has been doing,” she said.
“It doesn’t make sense for Wal-Mart to have it in all their stores, but Wal-Mart is indeed looking to broaden its customer base. They’ve done their homework and know which stores have shoppers who demand organics.”
Wal-Mart has promised to make organics more affordable for the average consumer with a goal of selling items at 10 percent over non-organic alternatives. Some see this as a source of concern because they fear the retail giant may push for a lowering of requirements to meet the organic standard.
“I truly believe that Wal-Mart’s promise to deliver lower prices is based on large, industrialized food production,” said Ronnie Cummins, national director of the Organic Consumers Association.
Gail Lavielle, a spokesperson for Wal-Mart, said the company is not looking to alter standards.
“It’s very important to us to work with suppliers who follow the rules. Cheating by anyone isn’t in our interest,” she said. “The trust factor is really a big one with our customers.”
Discussion Questions: Will the standards set for gaining
“organic” designation become more lax as demand for these types of products
increases? What role, if any, should retailers play in maintaining the integrity
of the organic food supply to consumers?
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retailers want piece of organic pie – The Dallas Morning News