Walmart takes on Whole Foods

The current issue of The Atlantic has interesting feature about Walmart its attempts to source more local produce — ie to move into Whole Foods territory (The Great Grocery Smackdown, Mar 2010):

[H]ow and why Walmart could be plausibly competing with Whole Foods, and found that its produce-buying had evolved beyond organics, to a virtually unknown program—one that could do more to encourage small and medium-size American farms than any number of well-meaning nonprofits, or the U.S. Department of Agriculture, with its new Know Your Farmer, Know Your Food campaign. Not even Fishman, who has been closely tracking Walmart’s sustainability efforts, had heard of it. “They do a lot of good things they don’t talk about,” he offered.The program, which Walmart calls Heritage Agriculture, will encourage farms within a day’s drive of one of its warehouses to grow crops that now take days to arrive in trucks from states like Florida and California. In many cases the crops once flourished in the places where Walmart is encouraging their revival, but vanished because of Big Agriculture competition.

Ron McCormick, the senior director of local and sustainable sourcing for Walmart, told me that about three years ago he came upon pictures from the 1920s of thriving apple orchards in Rogers, Arkansas, eight miles from the company’s headquarters. Apples were once shipped from northwest Arkansas by railroad to St. Louis and Chicago. After Washington state and California took over the apple market, hardly any orchards remained. Cabbage, greens, and melons were also once staples of the local farming economy. But for decades, Arkansas’s cash crops have been tomatoes and grapes. A new initiative could diversify crops and give consumers fresher produce.

This relates to my earlier post on the possibility of greater professionalization coming to marijuana growing if pot ever became legal.  In some ways, what Walmart is doing is the reverse of what has happened in US agriculture over the last 50 or so years.  It is backing away from favoring huge industrial farming concerns that can serve all of your stores. Instead it is aiming to offer greater variety of produce and position its offerings as both local and fresh.  In article, the authors writes about a blind taste testing for a bunch of foodees with identical dishes made with food bought at Walmart and Whole Foods.  To make it more interesting, the showdown was done in Austin, home of Whole Paycheck. The end results are that Whole Foods generally comes out ahead but Walmart hangs tough and impresses the food snobs.

This in intriguing remaking of Walmart’s supply chain. To be sure, Walmart cannot simply give up on industrial farms.  I suspect that the inputs for their private label processed foods all come from factory farms. As noted in a recent essay in the New York Times (A Balance Between the Factory and the Local Farm, Feb 14), when it comes down to is that localism doesn’t scale well and cannot deliver a year-round variety of food (for much of the country). However, Walmart’s move to encourage a broader agriculture base across the country is going to help a lot of smaller farms. Whatever Walmart does tends to have a big impact — for good or for ill.  Here it seems that they could if not remake at least refocus a slice of US agriculture in a way that provides a great variety of fresh produce at reasonable prices to much of America.  It’s hard to say that would be bad.