Bringing organic to the people
It should come as no surprise that most grocers use organic food to lure shoppers to stores, especially desirable higher-income customers. Nielsen Research points out that “Sales of food labeled organic rose 16.7 percent to $13.4 billion for the year ended April 2.” Conversely, sales of all food rose 1.6 percent to $468 billion during that time.
If that’s the case then why did Walmart, the world’s largest grocer, start phasing out its Wild Oats organic food brand, dropping a line of products introduced two years ago to bring inexpensive organics to the masses?
Targeted to whom?
Walmart chief merchandising officer Steve Bratspies said in a recent November 2016 interview that, “Adding food perceived as healthier like organic is not our affluent-customer strategy, its broad-based strategy, but it’s a key piece to being relevant with that customer base in recent months.”
That said, Walmart executives say they are making a renewed push to increase organic food sales. Walmart is adding more organic fresh produce and small organic brands to shelves.
Maybe it’s me, but when I think of where an “affluent shopper” is going to buy groceries the image that comes to mind doesn’t include Walmart. It’s tempting to think there is some other agenda a work here. And there probably is, but ultimately this comes down to dollars and cents.
Corporations jockey for position all the time. Billionaire Ron Burkle bought the Wild Oats brand after the Boulder-based grocery chain was sold to rival Whole Foods Market Inc. and Walmart probably saw it as an opportunity. When that didn’t happen, the brand started getting pulled from the shelves.
To their credit, Walmart is hoping to add organic products to shelves in other ways, including selling more fresh produce and going it alone by adding more organic food to its existing “Great Value” store brand.
Good but not great
Some Wild Oats products sold well at Walmart, especially staples like jars of pasta sauce priced at about $2, the same as nonorganic brands like Prego and Ragu. But the brand didn’t grow as quickly as some at Walmart hoped, in part because the products weren’t in every store and weren’t called out on Walmart’s shelves at the time.
Biggest isn’t always best
Walmart is the country’s largest grocer but has been slow to become an organic powerhouse on the same scale, stymied by the food’s often higher production costs and unique supply chain, clashing with the retailer’s low-price model. Overall, Walmart has been battling slow-growing sales and a shift to online shopping. It recently closed more than 150 U.S. stores.