retail news in context, analysis with attitude

National Public Radio has an interview with Corby Kummer, senior editor of the Atlantic, who wrote a piece for the magazine recently favorably comparing the produce sold at Walmart to that sold at Whole Foods. Some excerpts:

Follow the yellow brick road... “It wasn't exactly like coming into Oz, but it was very surprising. I'd been told that Wal-Mart was going after high-ish-end supermarkets, and I'd better get myself to one of their so-called supercenters and have a look at the fruit and vegetables. So I did. It wasn't so easy in Boston because the closest stores in Boston are the oddly named neighborhood stores, which, of course, you know, are vast and look nothing like neighborhood stores that we think of. But I found myself in this supercenter, and I found very good-looking produce, and, in fact, one of those pick-your-own apple bags - you know, they're cute and white and have pictures of apples and handles on them - from exactly the same Massachusetts farm that I had seen at Whole Foods the day before. So, I decided I'm going to try doing a regular marketing here.”

On a taste test he engineered... “I went armed with the exact shopping list to get the same set of ingredients at Whole Foods and Wal-Mart and bring them into the restaurant kitchen, where I can assure you the cooks were very surprised to see a parade of Wal-Mart bags coming into their walk-in ... (The guests/tasters) only knew they came from two different purveyors and that they were the same thing, and that they had to score them on sheets. They were local food bloggers and food tasters and restaurant critics and one farmer who turned out to be another contributor to the Food Channel, who turned out to be the ringer. She knew the difference. But most people found themselves routinely preferring the vegetables and fruit from Wal-Mart, and they weren't happy when it was un-blinded.”

The Walmart initiative... “They've launched this initiative very quietly, because it's still in the test phases - but, of course, a test phase for Wal-Mart has huge implications and huge immediate results, which is that they're trying to revive agriculture in areas for staple crops, not fancy heirlooms like we think of with farmers markets, staple crops: onions, potatoes, lettuce, herbs, things that are - have really only been available from California and Florida and Texas, big-ag states.

And they're saying if you can deliver them to one of our distribution centers that's within a day's drive, we will buy from you, not California and Florida, and the money that we save on the three to five days of truck transport, we'll pay you a slight premium, as long as we can offer it at Wal-Mart at the same price we would be for produce from the big-ag states. That's their initiative.

“It is huge because, in a state like mine - I just talked about apples in Massachusetts, once an extremely important crop commercially, lost out entirely to Washington State. And now - and to an extent, New York State. And now both of those states are losing out to China, which decided 10 to 15 years ago to plant enormous crops of apples.

So the - all of this centralization doesn't pay off for farming areas, and Wal-Mart recognized this and recognized that a lot of university networks and nonprofits are trying to help farmers get access to enormous markets like Wal-Mart by helping smooth the distribution network, which is always the big sticking point in buying local produce for big supermarket chains. So they decided: Let's capitalize on this government investment, some of it from smoking settlement money in tobacco-growing states, and see what we can do to try to get farms to raise these staple crops they long ago had to give up.”

The long-term strategy... “Everyone's suspicious of Wal-Mart. I'm suspicious of Wal-Mart. And the proof of their sincerity is going to be whether they renew these contracts year after year, because very right-minded - I'm not going to name supermarket chains that make a big deal of buying local produce - will buy it for one year from a farm, and the farm gets all excited, invests in a lot more acreage, and then the next year, the buyer has disappeared because there's a lot of staff turnover. There's no loyalty to this farmer, and this farmer is stuck with a lot of crop that she or he can't sell. The majority of farmers, at least in Massachusetts, are women.

“So the question is whether Wal-Mart is going to, you know, put its money where its mouth is - which I think it will, because it's hardly publicized this at all - and buy year after year from the farmers who do increase their acreage.”
KC's View:
One of the other things that Kummer tells NPR is that he has heard anecdotal stories that Whole Foods can be tougher for suppliers to work with than Walmart...which is sort of ironic, considering the Bentonville Behemoth’s reputation.