Wal-Mart pledges more purchases from local farmers across the world
Thursday, October 14, 2010; 10:11 PM
Wal-Mart announced aggressive goals Thursday for improving the way that food is grown and transported across the globe, bringing the weight of the world's largest grocer to an industry that environmentalists say is riddled with inefficiency and waste.
The retail behemoth said it plans to triple the amount of food it sells from small- and medium-size farms in emerging markets such as India and Brazil to $1 billion within five years. In the United States, Wal-Mart vowed to double the sales of locally sourced produce to 9 percent of purchases. And it will begin holding farms accountable for the amount of water, energy, fertilizer and pesticides used to grow food.
"Our size and scale have been big tools for change," Wal-Mart chief executive Mike Duke said in a meeting with employees at the company's headquarters in Bentonville, Ark. "There is an opportunity to lead in this area of sustainable agriculture."
The company embarked on a mission five years ago to transform its business - often criticized for its singular focus on low prices despite collateral environmental damage - into an eco-friendly enterprise and to reshape its image. It aimed to use only renewable energy, eliminate waste and sell more sustainable products and to work with some of the same environmental advocacy groups that once criticized the company.
Since then, Wal-Mart has introduced hybrid 18-wheelers that use less fuel and smaller laundry detergent bottles to reduce packaging. It set new environmental standards for its suppliers in China, where regulations are notoriously lax. Last week, it launched a program to recycle the company's used plastic bottles into dog beds sold at its stores.
But Thursday's announcement was the most comprehensive and far-reaching initiative since the original goals were laid out. Wal-Mart began working on the project a year ago with advocacy groups such as the Natural Resources Defense Council, Environmental Defense Fund and the World Wildlife Fund.
"This is where Wal-Mart's scale enables them to do what other retailers aren't large enough to do," said Michelle Harvey, who helps manage EDF's work with Wal-Mart. "They really can change a market."
The retailer said it plans to boost sales of local produce - food grown in the same state that it is sold - by working with large farms to expand their operations closer to Wal-Mart supply centers and by buying more from small and female-owned farms near its stores. It also promised to buy harvests from farmers who grow certain crops in strategic locations, such as tomatoes, blueberries and broccoli along the Interstate 95 corridor. The program aims to reduce the distance that food must travel, lowering energy use and costs.
Internationally, Wal-Mart wants to boost production and improve practices at small- and medium-size farms. The retailer said it plans to train 1 million workers - half of them likely to be women - in sustainable-farming practices. The program is expected to raise their income by 10 to 15 percent, Wal-Mart said.
Stores in each of the 10 countries where Wal-Mart operates have created their own strategies for achieving those goals. In Mexico, the company plans to work with growers to increase use of drip irrigation. India's target is to reduce the amount of chemical fertilizers and pesticides used. In Japan, Wal-Mart buys produce directly from 15,000 farmers, cutting out the middle man and saving money. It aims to increase the number of farmers to 17,000 within five years.
The retailer also has committed to using palm oil from only sustainable farms for the products that it manufactures in-house, then sells in its stores. And it will not buy any beef from Brazil that contributes to the destruction of the Amazon rain forest.
"When Wal-Mart sends a signal like that, producers and suppliers listen," said Sabrina Vigilante, who works on sustainability for the Rainforest Alliance and helped advise Wal-Mart. "People are paying attention."
Other companies have adopted similar sustainability programs. Unilever has pledged to harvest all of its Lipton tea from farms that meet the Rainforest Alliance's criteria. Costco changed packaging on its chicken breasts and cut out 224 truckloads of Styrofoam annually - enough to fill 417 football fields. FedEx pioneered the use of hybrid delivery trucks and now has the largest fleet on the continent.
But Duke said that Wal-Mart has a unique responsibility to address the problems of farming because it is the biggest grocer in the world.
"We know we can ensure a more sustainable food supply chain for our growing population," he said.