Walmart Revisted (Part Two): Why I’m Still Cautiously Optimistic

by Bettina Elias Siegel on January 28, 2011

Yesterday I posted a round-up of various blogger’s opinions on Walmart’s recently announced nutrition initiative.  Many of them greeted the news with a heavy dose of skepticism, questioning whether the initiative is anything but corporate white washing — and taking issue with the behind-the-scenes nature of the retailer’s negotiations with the First Lady and her Let’s Move! team.

So where do I come out?

Reformulation of Walmart Products

The nutritional re-jiggering of Walmart’s house brand products strikes me as unlikely to produce hugely meaningful changes across the board.  As others have noted, a lot of these products are already of such questionable nutritional quality that the reformulations won’t suddenly make them healthy.  That said, if the end result is that a box of house  brand pilaf made from whole grain brown rice is cheaper than the one using white rice, or the house brand whole grain cereal is cheaper than the sugary one, how can that be anything but good for cash-strapped consumers?

Food activists have long lamented that soda is cheaper than milk, and McDonald’s is cheaper than a meal of whole foods.  Now, in a way, Walmart is going to bring about what food policy experts can only dream of  – i.e., something akin to a soda tax, where the least healthy products will now be more expensive than the healthier ones.   Couldn’t this development drive consumer behavior in the right direction for a change?

Effect on Suppliers

Moreover, Walmart has pledged to get its major food suppliers to follow suit in reformulating their own products, which means that such changes will most certainly happen.  (I used to work at one of the world’s largest consumer products and food conglomerates, and if Walmart told one of our companies to change its packaging or formulations, it was done yesterday.)  That means Walmart consumers can look forward to an ever-growing array of better-for-you products offered at lower prices.  Are they going to be the “best-for-you” products out there?  Certainly not.  We’re still talking about processed foods, after all.  But to me, even incremental changes that improve a food’s nutritional profile are better than no such changes at all.

Cheaper Fruits and Vegetables

Probably of most interest to me is the promise by Walmart to bring cheaper fruits and vegetables to its consumers.  Marion Nestle is right to ask how that move will affect small farmers, and that’s a huge open question.

But on a related note, I was very interested to read a piece published last year in The Atlantic Monthly which compared produce and other agricultural products (goat cheese, etc.) purchased at Whole Foods versus those purchased Walmart.  The author (using a blind taste test and a panel of chefs) found that in many cases the Wal-Mart products are superior, but what really caught my attention was a description of Walmart’s Heritage Agriculture program, which I’d never heard about before.

Under the Heritage Agriculture program, Walmart encourages farms within a day’s drive from a Walmart warehouse to grow crops that would otherwise have to be shipped by truck over many days from Florida and California.  Walmart’s motive, of course, is cost-cutting and a cynical desire to capitalize on the demand for all things “local,” but the effect is nonetheless hugely significant:  local crops which had vanished due to competition from Big Agriculture are suddenly profitable again, resulting in more diversified agriculture, support for small local farmers, and fresher produce for consumers.

And Walmart is clearly putting significant thought and investment behind the program.  According to the article, which highlighted Walmart’s particular efforts in Arkansas:

Walmart talked with the local branch of the Environmental Defense Fund . . . and with the Applied Sustainability Center at the University of Arkansas. The center (of which the Walmart Foundation is a chief funder) is part of a national partnership called Agile Agriculture, which includes universities such as Drake and the University of New Hampshire and nonprofits like the American Farmland Trust.  To get more locally grown produce into grocery stores and restaurants, the partnership is centralizing and streamlining distribution for farms with limited growing seasons, limited production, and limited transportation resources.

Walmart says it wants to revive local economies and communities that lost out when agriculture became centralized in large states. . . . It’s not something you expect from Walmart, which is better known for destroying local economies than for rebuilding them.

As everyone who sells to or buys from (or, notoriously, works for) Walmart knows, price is where every consideration begins and ends. Even if the price Walmart pays for local produce is slightly higher than what it would pay large growers, savings in transport and the ability to order smaller quantities at a time can make up the difference. Contracting directly with farmers, which Walmart intends to do in the future as much as possible, can help eliminate middlemen, who sometimes misrepresent prices. . . .

Michelle Harvey, who is in charge of working with Walmart on agriculture programs at the local Environmental Defense Fund office, summarized a long conversation with me on the sustainability efforts she thinks the company is serious about: “It’s getting harder and harder to hate Walmart.”

Criticisms About Process

Two of the bloggers I cited yesterday would apparently still take issue with the Walmart deal — even if the best case scenarios I’ve described above come to pass.

Michelle Simon, author of the book Appetite for Profit and the blog of the same name, asked

What was the First Lady’s staff doing in secret talks with Walmart for over a year? How did such an approach even get started? Here’s an alternative scenario: Congress holds hearings (you know, in public) on how the entire food industry should be changing its ways with enforceable, meaningful laws that apply to everyone, not just Walmart.

And Kristin Wartman, writing for Civil Eats, dismissed Walmart’s promises to offer lower price fruits and vegetables by asking, “[W]hy can’t the government step in and subsidize fruits and vegetables like they do the corn and soy that go into nearly every processed food item?”

Both of these questions strike me as terribly naive.  First, nothing in the First Lady’s negotiations with Walmart precludes public Congressional hearings or changes to our nation’s agricultural policies.  But radically reforming our food industry through the legislative process is going to be — let’s face it — close to impossible given the enormous lobbying influence of Big Agriculture.

Whether you think this is a lamentable state of affairs or not, Walmart wields tremendous power due to its size and it’s beholden only to its own shareholders, not any other entrenched interest.  By working with Walmart directly, Mrs. Obama may have achieved far more in a year of back room negotiations than we could see in the coming decades by relying on the legislative process alone.

Maybe.

It of course remains to be seen how this all really plays out.  And nothing I’ve talked about above relates to other, valid criticisms of the retailer, such as its shoddy labor practices.  But viewed solely through the lens of how this deal may affect our nation’s health, I’m willing to keep an open mind.

{ 9 comments… read them below or add one }

Dr. Susan Rubin January 28, 2011 at 8:23 am

Walmart was a topic of discussion last night after the NYC premier screening of the Economics of Happiness.
To fully understand the implications of food and Walmart, you should take the time to watch The High Cost of Low Prices
http://www.walmartmovie.com/
We must consider all relevant factors when considering how to heal our broken food system.

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Grace @eatdinner January 28, 2011 at 9:10 am

I have also been struggling with this one. Many folks in NYC have been fighting Wal-Mart for years due to their bad labor practices and I think a big dose of skepticism in need for any corporate “do-good” campaign. YET, I also know that millions of people shop at Wal-Mart, including my parents who are on a fixed income. Reduced prices for fruits, veggies, and more healthy food will make a HUGE difference to many middle to low income folks. That’s a reality. Yes, I would rather the gov’t have a more enlightened food subsidy program, but big food has to be part of the change too. I think the obesity crisis in this country is too important to ignore, and if Wal-Mart is able to influence the shopping and eating habits of millions in a positive direction, I’m open to it. There I said it.

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bettina elias siegel January 28, 2011 at 9:14 am

Grace: That’s just how I felt writing this post! Like, Yay, Walmart! And now I need to go take a shower. Thanks for having the courage to join me on the dark side. :-)

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Milehimama January 28, 2011 at 9:43 am

I wrote about WalMart’s Heritage Agriculture Program when it was announced. I am skeptical of Walmart’s claims and think it will damage farmers and be a bad thing for sustainable agriculture who try to take part.
You can see that post here:
http://www.milehimama.com/2010/11/04/walmart-local-farms-and-sustainability/

Replacing the transfat sounds healthier- but what will it be replaced with? More chemicals and preservatives? They are cutting sugar, but will that mean adding artificial sweeteners, which have implications on health and may contribute to obesity, also? If sodium is cut, will that mean an increase in other taste enhancers, such as autolyzed yeast extract (MSG)?

When Walmart talks about lowering the cost of fresh food, what they mean is that they will pay farmers less. And so the farmers will have financial pressure to produce more food for less money. I’m not sure pushing farms to make cheaper food, rather than more nutrititious food, is a step in the right direction.

I think there will be some serious environmental implications (if they replace trans fat with palm oil, for example, or if vegetable farmers use more pesticides/GMO seeds/chemical fertilizers to maximize yields.)

BTW – I can’t find the text of Leslie Dachman’s remarks, it’s not on the Walmart press site or the Whitehouse site. Do you have a link so I can see exactly what she said?

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Michele Simon January 28, 2011 at 12:54 pm

Thanks for citing me (Michele with one l, btw).

My reaction is, since you asked: Let’s see.

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bettina elias siegel January 28, 2011 at 2:53 pm

Oh, sorry for the typo. As a “Bettina” I usually try to be quite sensitive to name misspellings! Thanks for coming by and yes, let’s collectively revisit down the road. . .

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Renee January 28, 2011 at 3:39 pm

I don’t know how I feel about this, but I really appreciate reading your analysis. There are so many angles to consider in this situation that thinking about it becomes kind of dizzying.

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Melissa Carle January 28, 2011 at 5:46 pm

Thank you for giving the benefit of the doubt, as I have been wont to do during this announcement. I am not convinced, as it sounds neither are you, that this is a panacea. But credit must be given to one of the largest players in the market for starting a conversation with its suppliers and its customers, none of whom may be that otherwise encouraged to talk of such things; so, well done.

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Lorenzo Lopez January 31, 2011 at 9:40 pm

I work in Walmart’s communications team and have worked with our colleagues on this program. I wanted to acknowledge your analysis of our efforts to make food healthier and healthier food more affordable. We know this is a big endeavor and we’re committed to it because we truly believe that our customers should not have to choose between a product that is healthier for them and one they can afford.

By working with supliers to reformulate packaged food we can help reduce the consumption of sodium, sugar and trans fats – contributors to the obesity epidemic and chronic diseases in America.

We also know we can help customers save money on fresh produce by removing the unnecessary costs out of the supply chain. One way we’re able to do this is buy sourcing from local suppliers and reducing transportation costs – typically the largest cost behind produce. This is a move that can result in more income for farmers while lowering prices for customers.

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