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Walmart Jumps on the Local Food Bandwagon -- Is This a Blessing or a Curse?

It may seem out of character for Walmart to act as an agent for positive change, but the only thing really out of character would be to knowingly undermine its bottom line.
 
 
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Once reviled as a seven-letter word representing the myriad evils of capitalism, Walmart has, in recent years, gone a bit greenish. Hybrid 18-wheelers haul Walmart goods around the world's roads. Windmills and other renewable energy sources supply power to many company stores. And now the world's largest retailer has embraced the virtues of locally and sustainably produced food.

An October 14 company press release reads more like the mission statement of your local nonprofit food co-op than a communication from the world's largest retailer:

Walmart today launched its new global commitment to sustainable agriculture that will help small and medium sized farmers expand their businesses, get more income for their products, and reduce the environmental impact of farming, while strengthening local economies and providing customers around the world with long-term access to affordable, high-quality, fresh food.

Walmart's definition of "local" means food that's produced in the same state in which it is sold, and the company aims to have at least 9% of the produce sold in its U.S. stores meet this criteria by 2015. In other countries the target percentage rises, to 30% in Canadian stores and 50% in Indian and Chinese Walmarts. By 2015, the retail behemoth aims to have sold $1 billion worth of food from 1 million small and medium-sized farmers, while boosting those farmers' incomes by 10 to 15 percent. The company will also make efforts to keep track of its suppliers' use of pesticides, water, and energy, and provide training to farmers to help them reduce their resource use. In addition to encouraging farming practices that produce more food with fewer resources and less waste, Walmart's also intends to assist its farmers in crop selection - including plans to work with Southern tobacco farmers in hopes of convincing them to switch to growing blueberries.

These initiatives dovetail with Walmart's new Heritage Agriculture program, which focuses on encouraging the production of regional crops that have declined in recent years. Walmart's Ron McCormick, senior director for Strategic Food Sourcing, told Food Safety News that the economic decline of many rural farming regions was one reason that prompted Walmart's interest in establishing a connection with local food producers. Many areas throughout the US that were once supported by thriving agricultural economies now have a Walmart store or food distribution center, he says. "It made sense to us, that if we could revitalize those economies, it would let us buy fresher product for our customers and save food miles. At the same time, we would be supporting many rural communities that support our stores," he said.  
It may seem out of character for Walmart to act as an agent for positive change, but remember: the only thing Walmart could do that would truly be out of character would be to knowingly undermine its bottom line. Like everything else it does, the promotion of sustainable, local agriculture is a calculated move to increase profits - if the corporate brainstem were to determine that reconciling quantum mechanics with Newtonian physics would boost sales of cheap bath towels, it would probably do that as well.

Compared to quantum mechanics, the economic advantages of local food are straightforward and easy to calculate. The market for this kind of food is booming, and of course the company wants to cash in. But Walmart is even more interested in the opportunities embodied in the popular locavore's mantra that the average particle of food travels 1,500 miles from field to plate. This inefficiency provides a huge opportunity for the company with the world's largest food supply chain to further streamline its operations. That's where the Heritage Agriculture program comes in, encouraging the cultivation of crops that history has shown grow well in certain regions - especially areas that surround the company's 40 food distribution centers. This builds long-term efficiency into Walmart's supply chain, saving money on transport and packaging while adding shelf-life to its perishable produce. The ensuing cost savings should help Walmart toward the goal of improving the bottom line of its produce suppliers by 10-15%.

 
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