(This one’s for Zoe!)
The New York Times has a story today about Wal-Mart’s new push to source more of its produce from local (read: in-state) farmers:
The program is intended to put more locally grown food in Wal-Mart stores in the United States, invest in training and infrastructure for small and medium-sized farmers particularly in emerging markets and begin to measure the efficiently of large suppliers in growing and getting their produce to market.
Given that Wal-Mart is the world’s largest grocer, with one of the biggest food supply chains, any changes that it makes would have wide reaching implications. Wal-Mart’s decision five years ago to set sustainability goals that, among other things, increased its reliance on renewable energy and reduced packaging waste among its supplies, send broad ripples through product manufacturers. Large companies like Procter & Gamble redesigned packages that are now also carried by other retailers, while Wal-Mart’s measurements of environmental efficiency among its suppliers helped define how they needed to change.
In the United States, Wal-Mart will double the percentage of locally sourced produce it uses, to 9 percent, the company said. Wal-Mart defines local produce as that grown and sold in the same state. Still, the program is far less ambitious than in some other countries — in Canada, for instance, where Wal-mart expects to buy 30 percent of produce locally by the end of 2013, and, when local produce is available, increase that to 100 percent.
In emerging markets, Wal-mart has pledged to sell $1 billion of food from small and medium farmers (which it defines as farmers with fewer than 20 hectares or about 50 acres). It will also provide training for the farmers and their laborers on how to choose crops that are in demand as well as the proper application of water and pesticides.
Both in the United States and globally, Wal-Mart will invest more than $1 billion to improve its perishable supply chain. For example, if trucks, trains and distribution centers could help farmers in rural Minnesota get crops to Wal-Mart more quickly, the result would be less spoiled food, a longer shelf life, and presumably more profit for both the farmer and for Wal-Mart. Wal-Mart said it planned to reduce food waste in emerging-market stores by 15 percent, and in other stores by 10 percent.
Wal-Mart is, in many ways, the poster child of the excesses of corporate America. But the flip side of Wal-Mart’s size and buying power is that it has the ability to impact supply chains in a profoundly positive way, if it chooses to use its super powers for good.
The irony is that a company long known for putting local mom and pop stores out of business may in fact, if it becomes committed to this goal, in some measure revitalize local mom and pop farming. It’s also ironic to think that a company which can provide goods cheaply because they are sourced from labor markets on the other side of the world – like China – may in fact help to bolster local economies and community sustainability through moves that restore short supply-chains and reduce the distance our food travels to reach our plates.
I worry that Wal-Mart’s “Always Low Prices” will mean purchasing agreements that don’t compensate local producers well enough to keep them afloat, but time will tell how this works out for everyone involved.