Marketplace Report: Wal-Mart's Organic Food Push

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NOAH ADAMS, host:

Back now with DAY TO DAY. There is word that Wal-Mart has big plans to boost its sales of organic foods. The New York Times reports the world's biggest retailer is pushing its suppliers to increase their range of products to meet higher demand. The move is expected to bring down prices for organic foods across the nation.

Bob Moon joins us now from the MARKETPLACE news bureau in New York. Bob, how much more organic food does Wal-Mart, could Wal-Mart indeed expect to sell, and how much will that affect prices?

BOB MOON reporting:

Well, now, anytime Wal-Mart gets into a different area of retailing, it makes a big impact. The company has about 2,000 super-centers and even more stores that sell at least some groceries. Analysts are saying that this move to boost its organic sales could soon make Wal-Mart the biggest player in this area. It's already the largest seller of organic milk. So the impact of that, according to this report today, is that organic products could sell for about 10 percent more than non-organic varieties. Right now, organic foods generally go for a premium of anywhere between 20 and 30 percent higher than non-organic.

Wal-Mart officials are quoted as saying that the company wants to democratize organic foods and to change the way that consumers view Wal-Mart itself. They say consumers of organic products don't always think of Wal-Mart as their first destination, and they aim to change that by making it clear that the retailer is in this organic business.

ADAMS: Now, any response from the sort of organic food consumer group community out there?

MOON: Well, some mixed reactions being reported to all this. Some advocates of the more natural foods are pleased by Wal-Mart's move. They say it's going to give consumers healthier and more varied choices. But critics say that mass manufacturing really goes against the whole idea of organic production. They say this could lead to lower standards for producing these kinds of products and that the very size of Wal-Mart really threatens the idea of the environmental benefits that are derived through organic farming.

ADAMS: Yeah. You know, that very word, organic, is a moveable feast. Who decides how you get to put that label on the foods now?

MOON: Well, right now foods sold as organic has to meet U.S. Department of Agriculture regulations to use the label. It generally means that they're grown without the use of toxic pesticides and chemical fertilizers. It means that the animals aren't fed antibiotics and they can't be treated, or the food that's produced can't be treated with artificial preservatives or have any added flavors or colors.

There's a controversy growing right now about some of those standards. Critics are accusing the USDA of allowing farms to bring in non-organic cows to replenish their milk herds. They say that's being done by some of the bigger dairies.

Today in the MARKETPLACE newsroom, we're watching some encouraging news about a possible decline in the world's demand for oil.

ADAMS: Thanks Bob. Bob Moon of Public Radio's daily business show, MARKETPLACE. It is produced by American Public Media.

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