Ron's explanation

Ron McCormick, vp of produce and floral at Wal-Mart, gave an interview to a Reuters reporter about Wal-Mart's organic produce business. The April 23 story is here

While Wal-Mart said last year that it would double its offerings of organic, the reporter notes that the number of organic produce items in Wal-Mart has been scrutinized, with some surmising that the retailer's organic push has fallen flat. The reporter sets up the story with the line that "many are wondering if Wal-Mart has pulled back" from its commitment to organic.

McCormick doesn't get into specifics, but he did say that "really very few stores" could not sell 20 to 25 organic produce items on a consistent basis. At the same time, McCormick said that the chain has moved away from exclusively organic lines.

From the story:

McCormick said Wal-Mart began testing organic produce at a store near Albuquerque, New Mexico, about three years ago, after noticing that virtually all of its competitors had moved into the category.
"We thought if it was a high population, fast-growing market like this, and there's that many people into it, it takes it beyond the world of a Whole Foods or a specialty store -- there must be something there," he said.
So the company set up a 12-foot section in its produce area, combining natural foods, vegetarian items and organic produce.
"I think we added initially about 45 items, and we were getting it from local sources, so it was easy to do," he said.
Some items sold well, others did not, and McCormick said his team played around with the section for a year before organics garnered company-wide interest, with talk of expanding it across the country.
One way Wal-Mart figured it would tackle the category on such a large scale was to go exclusive -- find certain products that were relatively as easy to grow organically as they were to grow conventionally, and then sell only the organic version.
But by only offering three-packs of organic romaine hearts, the company was unable to take advantage of local supply and times when farmers would offer deals on conventional lettuce.
"We were having to say no because our program was exclusively organic on that item. So it got to be foolish not to take advantage of those opportunities," McCormick said.
Wal-Mart also ran into supply issues.
"The growers were straining to meet our volume, which I think also pushes you into an unenviable position in produce," he said.
"We're now trying to build a network of good suppliers that will be able to grow with us and be consistent. Our ideal supplier is one that has a passion for what they're doing and also has the ability to grow as we grow, so you don't have thousands and thousands of suppliers," he said.


TK: It would be helpful to know Wal-Mart's organic sales, but that information won't be forthcoming. Not surprisingly, McCormick clearly signals Wal-Mart is looking to team with the largest organic suppliers and grow business with them.