Wal-Mart Pares Costs By Selling Local Produce

Two years ago, retail giant Wal-Mart created a stir when it announced it was moving into the organic foods market.

Today, the nation's top grocery seller is highlighting its purchases of "locally grown" produce. While the company is touting the community benefits, buying local produce is also a way to cut the company's growing fuel costs.

Wal-Mart says partnerships with local farmers have grown 50 percent over the past two years — not just in California, but in Wal-Mart stores across the country. This year, it plans to buy about $400 million worth of locally grown produce.

Tiffany Moffatt, a Wal-Mart spokeswoman, says the primary benefit to the company is millions of dollars of savings on fuel costs each year. Local partnerships have become the company's latest public relations mantra.

"It's estimated that in the United States, produce travels an average of 1,500 miles — from farms to [the] homes of consumers. So it just provides us an opportunity to make products closer to home and buy local," Moffatt says.

But the retailer's definition of what constitutes locally grown doesn't match the one promoted by many in the so-called local food movement.

Defining Local Food

On a Saturday morning at a weekly farmers market in Sacramento, Calif., farmer Patrick Hoover is ladling blueberries into small plastic boxes and offering samples. He drove less than 50 miles, from his 40 acres up in the foothills, to sell them. And that's what most locavores — the fans of locally grown food — describe as "real local food." Hoover says selling to Wal-Mart doesn't really appeal to him.

Wal-Mart says anything grown in the same state is local food.

"The quality, I have. I don't do any markets like that, just because my stuff is picked ripe, and the only shelf I want it on is between here and the customer at home," Hoover says. "And sitting in any retail store is just not good for my produce."

But farmers who sell at local markets acknowledge their products are usually more expensive than what's stocked in the stores. The price difference is partly due to the additional labor involved. Many of Wal-Mart's local producers are large-scale farmers that can supply in bulk, which generally means cheaper prices.

The Wal-Mart Effect On 'Locally Grown'

Professor Dan Sumner teaches agriculture economics at the University of California at Davis. He says if the company's strategy catches on nationwide, it could spell problems for a major growing state like California, where much is shipped elsewhere.

"If people decide they're going to consume locally. That means they're probably not consuming our walnuts and apricots and almonds and everything else we grow around here," Sumner says.

Still, locally grown might not be that big of a selling point for Wal-Mart customers. The produce area in the West Sacramento Wal-Mart is covered with bright green and white signs, highlighting products that are "California Grown."

But those signs aren't having much of an impact on shopper Thomas Teeney. He says he's most concerned with his household's bottom line.

"We're kind of on a tight budget right now," Teeney says. "It's not really [of] that great importance to us. We just buy what's cheap."

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.