Wal-Mart and Organic Food Brand
A new report by the Cornucopia Institute, an organic farming watchdog, accuses Wal-Mart Inc. of cheapening the value of the organic label by sourcing products from industrial-scale factory farms and Third World countries, including China.
Wal-Mart announced earlier this year that it would greatly increase the number of organic products it offers and sell them at a price 10 above the prices for conventional food.
"We have received scores of press inquiries over the past few months asking us if Wal-Mart's organic expansion was 'good news or bad news' for the industry," said Mark Kastel, senior farm policy analyst for the Cornucopia, Wis.-based farm policy research group. "My stock answer has been: If Wal-Mart lends their logistical prowess to organic food, both farmers and consumers will be big winners by virtue of a more competitive marketplace. However, if Wal-Mart applies their standard business model, and in essence 'Wal-Marts' organics, then everyone will lose."
In a white paper about the industry, the institute contends Wal-Mart is poised to drive down the price of organic food in the marketplace by inventing a "new" organic - food from corporate agribusiness, factory farms and cheap imports of "questionable" quality.
"Organic family farmers in this country could see their livelihoods disintegrate the same way so many industrial workers saw their family-supporting wages evaporate as Wal-Mart and other big-box retailers put the screws to manufacturers — forcing a production shift to China and other low-wage countries," Kastel said.Wal-Mart already is the nation's largest organic milk retailer, partnering with milk processor Dean Foods (Horizon Organic) to introduce its own private-label organic milk packaged by Aurora Organic Dairy. The venture in Boulder, Colo., is being criticized for operating industrial-scale dairies with thousands of cows confined in feedlot-like conditions. Aurora Organic Dairy is the subject of two current U.S. Department of Agriculture investigations.
"If there was any previous doubt as to their intentions, partnering with Dean/Horizon and Aurora should leave no question in anyone's mind as to how Wal-Mart is approaching its organic initiative," said Steve Sprinkel, columnist for Acres USA, a sustainable agricultural journal.
Conversely, the industry's largest organic and natural foods retailer, Austin, Texas-based Whole Foods Market Inc., announced plans this summer to greatly expand its offerings of locally grown produce in deference to organic consumer sentiments. Whole Foods recently opened a new store on Milwaukee's east side at the corner of North and Prospect avenues.
"Between Whole Foods and hundreds of the nation's cooperatively owned natural foods groceries, we are certainly set up for a clash of the titans," said Ronnie Cummins, director of the Organic Consumers Association. "Will consumers choose cheap industrial food, be it from factory farms or questionable Third World imports, or will they continue to support ethical processors and family farmers?"
"Wal-Mart's move into organics is worrisome to investors who realize that the credibility of organic label, and the sustainability of organic farming, is of greater significance to their returns than the mere branding of the term 'organic,'" said Daniel Stranahan, chairman of the Investment Committee of the Toledo-based The Needmor Fund. "If we undermine the legitimacy of organic label, then we also undermine the investor and consumer confidence that have brought historic premiums to organic products."
Bentonville, Ark.-based Wal-Mart has not yet responded publicly to the criticisms of its foray into the organic food market.