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Walmart’s answer to Aldi and Amazon: ‘designer cantaloupe’

Walmart spent two years developing the Sweet Spark cantaloupe, picture on the right. (Courtesy of Walmart)

Off-season cantaloupes, Walmart executives say, “taste like a piece of wood.”

Which is why the world’s largest retailer recently set out to create a “designer” melon that tastes as sweet and flavorful in winter as it does in summer. The Sweet Spark, as it is called, has been in the works for two years and is up to 40 percent sweeter than the current winter fare sold at Walmart, Bloomberg originally reported this week.

“We sell 10 times as many cantaloupes in the summer than during the fall and winter,” said Molly Blakeman, a Walmart spokeswoman. “When we looked closer, it was easy to identify why cantaloupe sales dropped off: They weren’t as good in the wintertime as they were in the summertime. This was our way of fixing that.”

The company’s roll-out of its new cantaloupe comes as the company braces for competition from German discount grocers Lidl, which is opening its first U.S. stores on Thursday, and Aldi, which is investing $3.4 billion to open 900 locations by 2022. Both are known for offering sweeping discounts on groceries, which could mean bad news for Walmart, which has long relied on its formidable buying power to offer lower prices than its competitors.

Walmart partnered with Bayer AG, the German agriculture giant that is in talks to buy Monsanto, to develop the new cantaloupe seed. The retailer tested 20 types of seeds and spent six months evaluating their fruit before coming up with the winning combination, Blakeman said. Walmart employees rated the fruit on attributes like taste, texture and aroma. (“People who tried it were very fanatical about it,” Blakeman said.) Employees also voted on the fruit’s name, which was whittled down from a list of 150 submissions.

Walmart’s approach — to create an entirely new variety of fruit that fits its needs — is increasingly popular in the United States as grocers, faced with increasing competition and ever-growing demand for novelty produce, look for new ways to stand out, said Courtney Weber, a berry breeder and horticulture professor at Cornell University.

“The goal is to have something that is special in some way,” Weber said. “From a plant breeder’s standpoint, our goal is to provide improved varieties of fruit — which can mean improving color, flavor, yield or disease resistance.”

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Japan, where white strawberries have become the ultimate luxury item, is at the forefront of specialty-bred fruits, Weber said. The practice has also begun to take hold in Europe, , where fruit makers increasingly sell certain varieties only to certain supermarkets. And in the United States, programs like Walmart’s could ultimately help usher in a new wave of improved fruits and vegetables, according to Susan Brown, director of Cornell’s Fruit and Vegetable Genomics Initiative.

“Often the problem now is that if we have a new variety of fruit, it’s very hard to convince retailers to try something new,” Brown said. “When a company like Walmart partners with breeders and growers, they know exactly what the market is for the new fruit, which actually helps everybody: Consumers, producers and breeders.”

Creating its own breed of cantaloupe — and potentially enlisting a number of growers to produce it — made particular sense for Walmart because of its size, breeders said. The company currently has more than 4,600 stores across the country.

(In 2011, cantaloupes contaminated with listeria — some of which were sold at Walmart — killed 33 people. Walmart later reached a settlement with 23 families for an undisclosed amount.)

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“The problem that Walmart has is volume,” Weber said. “They’re such a big company and they need so much to fill their shelves, that their only real option if they want to have uniformity and to be able to have it everywhere, is to do it this way. It’s unlikely one company could grow enough cantaloupes for Walmart.”

Cantaloupes, he added, were likely an obvious starting point because they are relatively resilient and sturdy. A more delicate fruit, like berries, would have required special care and handling, adding to their cost. The thicker skin on cantaloupe means it can be shipped and stored relatively easily, without fear of compromising quality.

The Sweet Spark, which is not genetically modified, is grown in Guatemala and Costa Rica. It is currently sold in 200 U.S. stores, with an expansion planned for later this year.

The company in recent years has expanded its line-up of organic fruits and vegetables to appeal to health-conscious customers. It has also forged exclusive partnerships to sell products like Oreo O’s cereal and Jelly Donut Oreos, and Blakeman says the company’s next goal is to develop a more flavorful tomato.

“If you try to frame what we’re doing, it’s pretty simple: We’re trying to win customers,” Doug McMillon, presidnet and chief executive of Walmart, told reporters earlier this month. “We’re working on cost and price. We’re working on assortment.”

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