Wal-Mart Goes Organic!?

From BusinessWeek Online today: Wal-Mart’s Organic Offensive.

Wow. The world’s largest retailer is planning to make a big dent in the organic foods market. Yes, Wal-Mart, everyone’s favourite symbol of corporate avarice, is aiming to become a leading purveyor of the archetypical goody-goody lefty-progressive counterculture boutique consumer good.

But not everyone is happy about this (which is what makes the title of the article a play on words. Get it?)

Richard DeWilde has a long history with organic farming. His grandfather, Nick Hoogshagen, adopted the organic approach five decades ago on his farm in South Dakota, well before it became popular with consumers…
But DeWilde isn’t thrilled. Instead, he’s dismayed at the prospect of Wal-Mart becoming a player in the organic market. He fears that the company will use its market strength to drive down prices and hurt U.S. farmers. “Wal-Mart has the reputation of beating up on its suppliers,” says DeWilde. “I certainly don’t see ‘selling at a lower price’ as an opportunity.”
He’s hardly the only one. Many farmers who have benefited from the strong demand and healthy margins for organic goods are fretting that the market’s newfound success also brings with it newfound risks.

Now, I’m not about to say anything anti-farmer. Most farmers work much harder than I do, and deserve every penny they make. But still, it’s a little hard to have much sympathy for the idea that organic foods should be priced so that only people driving Volvos while sipping Starbucks cappucinos can afford them.

More interesting, perhaps, is the worry that Wal-Mart (and other major corporate players) might use their influence in Washington “to lower the standards for what is classified as organic food,” and that they might import ostensibly “organic” food from China, which would hurt American farmers and (in some people’s eyes) render the authenticity of the supposedly organic foods suspect.

But the article ends on an up note. It reminds us that a retailer the size of Wal-Mart is capable of changing the way suppliers do business. The result of Wal-Mart entering the market for organics might well mean an overall increase in the supply of organic foods.

While some farmers are concerned that Wal-Mart may try to squeeze them financially, there could be a more benign impact. Farmers who now use pesticides and other chemicals could turn to organic farming, as they see increased demand.

(Of course, just how much credit Wal-Mart deserves, here, depends in part on what we think of organic foods. Certainly, using less pesticide & so on seems like a good thing, from an environmental point of view. But there’s at least some reason to doubt whether organic foods are any healthier than other foods).

2 comments so far

  1. Jean-Yves Landry on

    Wal-Mart is one of the weirdest corporations on earth. You can bet your dollar that their move to incorporate the organic movement into their stores has more to do with making money of a trend, than providing chemical-free alternatives. Wal Mart will always be wal-mart and organic fans should buy their stuff elsewhere.

  2. Chris MacDonald on

    Um, OK. I’ve heard Wal-Mart called a lot of things. “Weird” is a new one.Of course, making money is why most people (not all) go into business. I’m not sure I see any argument, here, why I wouldn’t want to buy my organic food from Wal-Mart.


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