Co-Ops Downplay "Wal-Mart Effect"

Wal-Mart may be honing in on local food market, but suppliers don’t seem worried

For many small businesses, Wal-Mart’s bouncing happy face rolls back anything but smiles; however, local co-op grocers may not be frowning.

Although the company often receives a bad rap, Wal-Mart might be doing more good than you think. As the largest buyer of U.S. agricultural products in the world, the chain purchases fresh organic products from local suppliers throughout the country.

“This is good for the surrounding communities and it helps to generate savings on distribution costs that we can pass on to our customers,” says Jami Arms, Wal-Mart spokeswoman. “This is even more important in the current economic climate because organics help us give customers a one-stop shopping experience that will help them save time and fuel costs.”

When it comes to the organic food market, it appears local co-ops are safe from Wal-Mart’s shadow—at least for now.

“Ultimately they can do what they want; we have other niches that they can’t fill,” says Travis Lusk, produce manager of Seward Co-op in Minneapolis.

Despite the lack of concern from some neighborhood co-ops, in 2006, the Cornucopia Institute, a farming watchdog group based in Wisconsin, filed a formal legal complaint with the United States Department of Agriculture, claiming it had documented cases of Wal-Mart mislabeling non-organic food products as organic. Yet, as of May 4, 2007, the State of Wisconsin Department of Agriculture, Trade and Consumer Protection and the USDA are in agreement that the issue lies in the execution of how Wal-Mart labels organic products, but the company is not in violation of any organic regulations.

Although the state of Wisconsin will continue to monitor Wal-Mart’s positioning of its signs, there doesn’t seem to be anything to worry about, even from a local, competitive business perspective.

“They’re the largest purveyor of organic products in the world,” Lusk says. “I’m always pleasantly surprised about more acreage being devoted to organic commodities.”

JJ Wienkers