retail news in context, analysis with attitude

The New York Times this morning reports that Walmart plans to unveil later today a five-year plan “to make thousands of its packaged foods lower in unhealthy salts, fats and sugars, and to drop prices on fruits and vegetables.”

According to the story, “The plan, similar to efforts by other companies and to public health initiatives by New York City, sets specific targets for lowering sodium, trans fats and added sugars in a broad array of foods - including rice, soups, canned beans, salad dressings and snacks like potato chips - packaged under the company’s house brand, Great Value ... The changes will not happen overnight. Wal-Mart is pledging to reduce sodium by 25 percent, eliminate industrially added trans fats and reduce added sugars by 10 percent by 2015. Its other plans are less specific. In addition to proposing to lower prices on healthy foods, Wal-Mart is planning to develop criteria, and ultimately a seal, that will go on truly healthier foods, as measured by their sodium, fat and sugar content.”

“In interviews previewing the announcement, Wal-Mart and White House officials said the company was also pledging to press its major food suppliers, like Kraft, to follow its example. Wal-Mart does not disclose how much of its sales come from its house brand. But Kraft says about 16 percent of its global sales are through Wal-Mart.

“In addition, Wal-Mart will work to eliminate any extra cost to customers for healthy foods made with whole grains, said Leslie Dach, Wal-Mart’s executive vice president for corporate affairs. By lowering prices on fresh fruits and vegetables, Wal-Mart says it will cut into its own profits but hopes to make up for it in sales volume. ‘This is not about asking the farmers to accept less for their crops,’ he said.”

The program will be phased in slowly over five years, and Dach concedes that not all the tactics have been worked out. “We think it’s a realistic target, but it’s aspirational in the sense that we can’t tell you today how it’s all going to get done,” he tells the Times.

The Times reports that the Center for Science in the Public Interest (CSPI) said that while the moves by Walmart push the food industry “in the right direction,” it would have been better if the company had been more aggressive and set a faster timeline.

The Times also reports that the “initiative came out of discussions the company has been having with Michelle Obama, the first lady, who will attend the announcement in Washington and has made healthy eating and reducing childhood obesity the centerpiece of her agenda. Aides say it is the first time Mrs. Obama has thrown her support behind the work of a single company.” The First Lady reportedly pushed Walmart to publish regular progress reports, a condition to which Walmart agreed.
KC's View:
The CSPI complaints notwithstanding, I think this is a positive thing...but I’m almost more interested in the things not mentioned in the pre-announcement chatter.

One is the adoption of some sort of nutritional labeling system ... because I fully expect that Walmart is going to introduce some sort of proprietary plan with goals similar to those set by systems such as Guiding Stars and NuVal. It is my understanding that Walmart has been working on such a system for some time now, and so I would guess that it won;t be long before we hear about it.

The other thing not mentioned - and, to be fair, it is not related to nutrition - is Walmart’s expected roll-out of online grocery shopping, almost certainly geared to store pick-up. That’s on the horizon, and getting closer ... and supermarkets need to be prepared.

The big news here is that Walmart doesn’t want to just dominate the selling of food in the US. It also wants to dominate the discussion, to be perceived as a thought leader.