Wal-Mart, the nation's leading food retailer, announced plans on Monday to double its organic offerings in the next two weeks. DeDe Priest, Wal-Mart's senior vice president of dry grocery, told Reuters that Wal-Mart hopes to prove that organic foods aren't “just for the rich.”
Of course, organic food tends to cost more because it costs more to produce. So how does a company best known for its rock-bottom prices plan to make a profit on organics?
Wal-Mart is already number one in organic milk sales in the U.S. That statistic might come as a surprise to some people, but if you're familiar with Wal-Mart's habit of squeezing its vendors, you won't be surprised by the story behind Wal-Mart's dominance in the organic dairy market.
Organic Valley, a cooperative of relatively small organic dairy farmers, was Wal-Mart's supplier of organic dairy products for three years. But when Wal-Mart demanded a 20 percent price cut, Organic Valley told Wal-Mart to get a new supplier, so Wal-Mart switched to Horizon Organics.
“Wal-Mart allows you to really build market share,” George Simeon, Organic Valley's CEO, told the New York Times. “But we're about our values and being able to sustain our farmers. If a customer wants to stretch us to the point where we're not able to deliver our mission, then we have to find different markets.”
Horizon, meanwhile, has been accused by numerous watchdog groups of failing to uphold organic standards and cutting corners. Is that why they can afford to do business with Wal-Mart when Organic Valley couldn't?
Even Coca-Cola kowtows to Wal-Mart. When Coke announced plans to launch a new diet soda last year to be sweetened with aspartame, Wal-Mart insisted that they make the soda with Splenda instead. Coke complied.
I would love to see organic foods become more affordable and more available. Those of us who routinely pay extra for organic out of a belief that we're doing our bodies and our planet a favor have long fantasized that the cost of organic food might drop as its popularity rises.
But that fantasy may never be realized, as Christy Harris explained in a Grist article citing the complex factors that could prevent organic food from ever achieving any economy of scale.
The bottom line? Beware of organic foods bearing rock-bottom prices.
good article nice to have the watchdogs out there monitoring the the organic labeling issue
I swear they seem like they’re out for world domination!! Interesting that they have this kind of squeeze power… “With great power comes great responsibility!”
Now Wal-Mart can make our race to the bottom an organic race. They are truely evil.