Wal-Mart Responds to BusinessWeek Organics Article
On Thursday, we pointed to a BusinessWeek article (via Gristmill) that claimed "A number of organic farmers across the country say that Wal-Mart has backed off of aggressive plans to offer more organic foods." Writer Pallavai Gogoi quoted two organic farmers who said that orders from the giant retailer have dried up; the executive director of the Florida Certified Organic Growers & Consumers group further suggested the Wal-Mart's move into organic foods appeared to misinterpret demand for these items at its stores.
In response to these claims, Karen Burk, a member of Wal-Mart's corporate communications team, assured Gogoi that the company remained committed to selling a wide variety of organic foods, and that its original goals had been miscommunicated; furthermore, the company had met or exceeded the goals for organic foods.
Today, Burk submitted a letter to BusinessWeek's editor claiming that the article created "an erroneous and inaccurate representation of Wal-Mart’s commitment to providing our customers with affordable access to organic products." A representative of the company passed the letter along to Green Options, and we've published it in full below. Wal-Mart's efforts to "green" its products and operations will have an enormous effect on the supply of and demand for more sustainable options in the marketplace, so we believe this conversation about the company's commitments needs to happen through a broad range of media channels.
Karen Burk's letter
April 13, 2007
Dear Editor,
Pallavi Gogoi’s article, posted April 12, 2007, on Businessweek.com, is an erroneous and inaccurate representation of Wal-Mart’s commitment to providing our customers with affordable access to organic products.
We have been selling organic products in our Supercenters and Neighborhood Markets for many years and, due to customer demand, announced plans to double the organic food offerings in those locations in March of 2006. We quickly met that goal and even exceeded it in communities where there is an exceptionally high demand for organic offerings. We continue to see steady customer interest in buying quality organics at great prices.
We realize that the customer base in each of our communities is unique, so we tailor the assortment in each of our stores to meet our customers’ needs. This is part of our long-standing “store of the community” philosophy of matching the mix of merchandise with the customer base and demand in each specific community. At a Bear Stearns investors conference on March 8, 2006, Wal-Mart executive Stephen Quinn announced, “We’re soon going to have over 400 SKUs (stock keeping units) of both fresh and brand name superior organic foods available at the Wal-Mart price.” Today we’re proud to offer significantly more than that company-wide, which is completely in line with our plans. This enables specific locations to customize their assortment of organics to fit the consumers in their community. This simply makes good business sense. We’ve used this same philosophy of tailoring our merchandise mix for each store for various categories for more than 10 years.
As a company that’s always working to provide our customers with the best products at the best value, we determine what we’ll buy based on ongoing assessments of quality, price, customer feedback and other factors. Organic apples are one of the top selling organic produce items at Wal-Mart, along with carrots, citrus, lettuce and packaged salads. Far from “backing off,” sales for Wal-Mart’s organic produce for 2006 were at a growth rate well above the industry average of 13.7 percent, based on data from the Organic Trade Association.
Bottom line, Wal-Mart’s growth in the organics category will continue to be reflective of the demand and we will continue providing our customers with the organic products they desire at low prices.
Sincerely,
Karen Burk
Wal-Mart Corporate Communications
We're interested to hear what you think about the claims made both in the BusinessWeek article, and in Ms. Burk's response.
April 14th, 2007 at 2:36 am
What do you think? Do you like the fact that Wal-Mart is facing criticism head-on by taking the coversation to the green blogosphere? Or does it just seem like greenwashing?
David
Founder and CEO
Green Options, LLC
April 15th, 2007 at 8:08 pm
Well, first, if Burk submitted the letter to BusinessWeek, she is responding to this print publication and not the green blogosphere, no? Or is there something I missed?
At first, I thought it seemed like a good sign that Wal-Mart responded to the article. The fact that they would spend time and energy on the issue seemed to suggest they did indeed have a commitment to organic foods.
Then I noticed that the sources who told BusinessWeek that orders from Wal-Mart were drying up were two organic farmers and Florida’s organic growers group, sources that would know what they were talking about.
So, I’m wondering if Wal-Mart responded just to keep its image intact. I’m still on the fence, interested to hear what others think?
Regardless, despite my healthy mistrust of huge corporations, it does seem like a good sign that Wal-Mart responded. Since they are a ginormous corporation, they don’t have to do anything they don’t want to do, so the response suggests to me that organics are indeed important to them .
Janis Mara
http://www.ecotality.com
April 16th, 2007 at 4:43 pm
I think the article talked to more small, traditionally organic growers and did not take into consideration that Wal-Mart doesn't often work with these suppliers. Typically, they're looking for volume and as soon as they announced the initiatives last year, their big suppliers stepped up conversion of conventional acreage to organic (in the case of produce).
Tonya Antle, vice president of organic sales for Earthbound Farm, was quoted in an article on thepacker.com (a fresh produce industry newspaper) and she vehemently denied that Wal-Mart is pulling back on its programs. Here is an excerpt from the article:
Tonya Antle, vice president of organic sales for Natural Selection Foods LLC, San Juan Bautista, Calif., which sells the Earthbound Farm brand, said she was skeptical of the article. “All of our experience with Wal-Mart has been completely different than what was written in that article,” she said. “I really feel strongly that that was one reporter and one grower’s viewpoint and it’s not at all the overall theme of what’s happening with organics at Wal-Mart.” Wal-Mart’s demand for Earthbound Farm product continues to grow, Antle said. “We’ve had nothing but a success story with Wal-Mart and they have continued growing the number of items they’re carrying and the number of distribution centers that are carrying organics,” she said. “They’re very supportive of the brands that they work with and are willing to give some valuable real estate to the organic category within their produce departments.”
Could it be that they'd rather go in their own distribution network than work with smaller growers? It may be a sad thing, but it's the way that Wal-Mart usually works.
April 18th, 2007 at 4:53 am
Not so long ago, the blogosphere was critical of Wal-Mart for entering the organic market at all, high-volume seller that it would have to be. Now we’re complaining that they might be pulling back? I understand that this would hurt small farmers that may have geared up for Wal-Mart (facing the same risk as any Wal-Mart supplier, selling to them is both good news and bad news), what do we want as consumers?