Organic Consumers Association


Previous Page

Click here to print this page

Make a Donation!


Wal-Mart Plans to Move More Aggressively into Organics, Now Its Fastest Growing Category

From: Ag News You Can Use #70
Amigo Cantisano <>
June 17, 2005


Wal-Mart's Scott Offers Organics, Premium Wines at Annual Meeting

JUNE 06, 2005 -- FAYETTEVILLE, Ark. -- Food is an important ingredient in Wal-Mart's recipe for success moving forward, according to president and c.e.o. F. Lee Scott--but that future might be tasting decidedly more upscale.

Scott joked during the company's annual meeting here last Friday that his career "was going nowhere until Frosted Flakes" became a Wal-Mart staple. The c.e.o.'s mention of the popular Kellogg's breakfast cereal is indicative of the company's success with core food products, something that is unlikely to change. However, with its archrival, Target, continuing to find success with a more stylish outlook on discounting, Wal-Mart now sees opportunities for companywide growth via foodstuffs such as organics and premium wines.

Scott proclaimed he is "excited about organic food, the fastest growing category in all of food, and at Wal-Mart." He said people in all income brackets want organic food products for their family, and lower-income families should not be denied such goods due to high prices.

Scott and Sam's Club president and c.e.o. Kevin Turner each noted the opportunities their chains have in food as a vehicle of growth. Both executives mentioned Sam's Club Key Lime Pie, a new item that signifies the widening breadth of Wal-Mart's product offerings as the mega-retailer attempts to appeal to a broader consumer base.

Another growth area for Sam's is wine. Turner noted that the club division is "focused hard on wines," including luxury brands within the category. He noted, specifically, that Sam's sells all of the Dom Perignon and Opus it can buy. At the same time, wines such as Yellow Tail and Beringer offer "great value" in the clubs, and Turner stressed that the division is staying "focused on it."

Sam's Club currently has more than 27.5 million members (47 million cardholders), more than any other wholesale club. The company will build 35-40 Sam's Clubs in the coming year.

Wal-Mart's main growth vehicle, meanwhile, remains the supercenter. Currently, Wal-Mart operates 1,700 supercenters and sees "tremendous growth" in this format, said Tom Schoewe, e.v.p. and cfo. Schoewe estimated that the U.S. market could accommodate 4,000 Wal-Mart supercenters. Right now, 950 such facilities have gone through the company's internal review process, indicating coming growth. By way of comparison, Wal-Mart operated 147 supercenters 10 years ago.

Separately, 11 proposals were put to a vote during the annual meeting, three of which were sponsored by Wal-Mart, including the election of new directors, were passed overwhelmingly by stockholders. All eight shareholder proposals, on the other hand, were roundly defeated. The proposed shareholder amendments included caps on executive salary and bonuses, political donation disclosure, equal employment opportunity, and an amendment requiring two thirds of the company's board members be non-affiliated with Wal-Mart either by employment (past or present) or family ties. Organizations sponsoring these amendments included the Teamsters General Fund, Sisters of Charity, and the United Brotherhood of Carpenters Pension Fund, among others.

A full recap of the full-day Wal-Mart shareholders meeting will be posted tomorrow on Smart Supplier,