| BENTONVILLE, Arkansas
BENTONVILLE, Arkansas A year ago, a Wal-Mart
shopper buying a three-pack of romaine lettuce hearts wound up
purchasing organic, and it wasn't because the organic trend had
convinced shoppers to cast aside conventional lettuce.
They had no choice -- the only three-pack of romaine hearts
Wal-Mart Stores Inc. sold was organic.
But over the past seven months, conventional packs of
romaine hearts have returned to store shelves at the world's
largest retailer. That's because Wal-Mart has found its initial
strategies for ramping up organic offerings at stores that sell
food did not always work.
"It's almost inappropriate for us, who always try to be the
low-cost leader and the low-price leader in our stores, to opt
for an exclusive program," said Ron McCormick, Wal-Mart vice
president of produce and floral, of the lettuce experiment.
Last year Wal-Mart said it would double its offerings of
organic food. Since then, the number of organic items in its
stores has been scrutinized for the way they rise and fall on a
daily basis and from store to store, with many wondering if
Wal-Mart has pulled back from its commitment.
McCormick, in an interview in his office at the company's
headquarters in Bentonville, Arkansas, declined to discuss the
specific number of organic items Wal-Mart stocks, saying that
with 2,400 stores it varies, especially from market to market.
Wal-Mart now has a number of so-called "tier one" stores
that carry a large organic selection, and McCormick sees the
potential for the category to succeed in all of its stores.
"There are really very few stores that can't sell 20 to 25
produce items on a pretty consistent basis," he said.
TESTING IT OUT
McCormick said Wal-Mart began testing organic produce at a
store near Albuquerque, New Mexico, about three years ago,
after noticing that virtually all of its competitors had moved
into the category.
"We thought if it was a high population, fast-growing
market like this, and there's that many people into it, it
takes it beyond the world of a Whole Foods or a specialty store
-- there must be something there," he said.
So the company set up a 12-foot section in its produce
area, combining natural foods, vegetarian items and organic
"I think we added initially about 45 items, and we were
getting it from local sources, so it was easy to do," he said.
Some items sold well, others did not, and McCormick said
his team played around with the section for a year before
organics garnered company-wide interest, with talk of expanding
it across the country.
One way Wal-Mart figured it would tackle the category on
such a large scale was to go exclusive -- find certain products
that were relatively as easy to grow organically as they were
to grow conventionally, and then sell only the organic version.
But by only offering three-packs of organic romaine hearts,
the company was unable to take advantage of local supply and
times when farmers would offer deals on conventional lettuce.
"We were having to say no because our program was
exclusively organic on that item. So it got to be foolish not
to take advantage of those opportunities," McCormick said.
Wal-Mart also ran into supply issues.
"The growers were straining to meet our volume, which I
think also pushes you into an unenviable position in produce,"
"Whenever growers are straining to meet your volume it
means they're forced almost into selling you something that
would not be their best crop because they're desperate to get
you something to meet your demand."
McCormick said Wal-Mart continues to fiddle with its
organic strategy, trying to figure out the premium that its
shoppers will pay for organic produce. It is also focused on
developing a consistent supply of products.
"We're now trying to build a network of good suppliers that
will be able to grow with us and be consistent. Our ideal
supplier is one that has a passion for what they're doing and
also has the ability to grow as we grow, so you don't have
thousands and thousands of suppliers," he said.