Walmart has announced a local food initiative, pledging to carry more locally grown fresh produce and seafood in its stores. The company plans to increase sales of locally grown produce to $1 billion worth of food from 1 million small and medium-sized farms by 2015.
Groceries account for more than half of Walmart’s business; many of these products are packaged, processed, and imported. There are 40 Walmart food distribution centers in the U.S.A. The company’s Heritage Agriculture program will double the amount of fresh, locally sourced food in Walmart stores, especially in the East coast’s I-95 corridor, the Delta region of the South, and the Mid-America region.
The first question about this big-box bounty: what does “local” food mean to Walmart? Mark Bittman asked, and Walmart answered. “Local” means “produced in the same state.” While this is reassuring in Delaware, it means that in Texas your food may be grown a thousand miles away.
The huge retailer benefits from economy of scale, but Walmart’s corporate claim to fame is an innovative supply chain management system (SCM) which allows “just-in-time” delivery. This practice passes the warehousing burden from big corporations back to the little guys who make components or products. It has been used with success in manufacturing and retailing, demand-driven processes, but veggies don’t last forever and cannot be made market-ready on demand. Whether Walmart’s large-scale SCM and distribution channels can be adapted to agricultural products on this scale remains to be seen.
Walmart corporate press release.
“Walmart U.S.: Committed to More Local Produce” (video press release)
“Wal-Mart to Buy More Local Produce,” Stephanie Clifford, New York Times.
”Walmart doubles down on local food,” Tom Philpot, Grist.
Image by Mike Licht. Download a copy here. Creative Commons license; credit Mike Licht, NotionsCapital.com
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