It was just a matter of time for Wal-Mart to join the local-and-sustainable food trend, the only question is what took them so long. Sure thing, the second they announced the intention to “make a difference,” the mainstream media begun celebrating the event like the second coming… Wal-Mart’s PR machine has scored again. But there’s something more here than meets the eye, and after a bit of dissecting, one concludes that the whole is nothing but noise with a marketing twist.
When they made the announcement, Michael T. Duke the retailer’s president and chief executive, came prepared with a bunch of notes. The New York Times quoted one of the statements:
“No other retailer has the ability to make more of a difference than Wal-Mart. Grocery is more than half of Wal-Mart’s business. Yet only four of our 39 public sustainability goals address food.”
But whatever was said at the conference, nothing beats the Wal-Mart sustainability page, which is indicative of the intent and scope. Wal-Mart will focus more on local produce, because “buying locally grown produce is a hot marketplace trend, with customers increasingly reaching for staples such as tomatoes and corn that grew in local soil.” In translation, it’s not really about responding to consumers and caring, it’s about stocking what sells. If you didn’t know, Wal-Mart committed to buying local produce in the past as well, but this news got somehow lost in translation. A release dated July 1, 2008 makes the recent announcement a deja vu:
Today, hundreds of growers across the United States provide produce sold in Walmart Supercenters and Neighborhood Markets, making Walmart the nation’s largest purchaser of local produce.
To make the deal sweeter, the release dated October 14, 2010 added some buzz-words like sustainability, new global commitment, sustainable agriculture and so on. The company also promised to double its sale of locally sourced produce in the US. There can be no better clarification of what this means, than that given by Jim Prevor in a recent analysis:
Since Wal-Mart defines local as “in state,” there can be massive changes in its local percentages by virtue of changes in its store distribution. The more stores Wal-Mart opens in California, the more “local” it gets, without changing anything about its procurement model.
Interestingly, for the altruistic Wal-Mart, sustainability is a trend and not a necessity (where trend reads “direction” and not “vogue” – we can only assume). But buying local produce doesn’t translate in buying organic produce, as you imagined. Wal-Mart is not concerned about such details. The quantity appears to be the main focus, while pesticides and fertilizer don’t need to be eliminated, but used more efficiently:
“Through sustainable agriculture, Walmart is uniquely positioned to make a positive difference in food production — for farmers, communities and customers. Our efforts will help increase farmer incomes, lead to more efficient use of pesticides, fertilizer and water, and provide fresher produce for our customers.”
Another important aspect is Wal-Mart’s “global” commitment to this “cause.” By “global” you can already assume that the company has researched the market prior to making the announcement, and that it is already practicing what it preaches. The thing that was missing was the PR that gives Wal-Mart the needed credits to boost its leverage over competitors. Again Jim Prevor:
Global procurement is, to a large extent, just a way for Wal-Mart to “get credit” by having its name listed as the exporter or importer for product it was already buying. This gives Wal-Mart political power.
The thing that got the media buzzing, the illusion of “making a difference” should also be considered. Wal-Mart is an empire. As such, whatever announcement they make that appears altruistic, can only get accolades. Below, a few highlights that show how the company promises to support farmers:
- selling $1 billion in food sourced from 1 million small and medium farmers;
- providing training to 1 million farmers and farm workers in such areas as crop selection and sustainable farming practices — the company expects half of those trained to be women;
- and increasing the income of the small and medium farmers it sources from by 10 to 15 percent.
These sound all promising, but… Wal-Mart is probably already selling $1 billion in food sourced locally. See above the release dated July 1, 2008. To outsource $1 billion locally, from 1 million farmers and still make a profit… do the math if you want to learn how much these farmers will gain per capita on the deal.
Providing training to farmers… again I have to leave room for somebody with a clear perspective: the billion dollar limit makes us see it as a PR stunt, not a serious procurement approach. A step by step documentary on how exactly Wal-Mart will be doing this, produced by someone like Morgan Spurlock is a must.
Last, but not least, increasing the income of farmers by 10 to 15 percent doesn’t mean that Wal-Mart is ready to pay them more. If anything, they will reduce what they pay to farmers per pound, only to order more and more and more… The strategy is simple: the farmer will supply exclusively to Wal-Mart, for the price imposed by the company, which, more likely, will be less than the real value of the produce. The word “subsistence” used by Wal-Mart in its official press release thus translates its true meaning: bare minimal.