July 3, 2008 in Business

Wal-Mart buying more produce from local farmers

Jon Gambrell Associated Press
 
FILE Associated Press photo

Wal-Mart Stores Inc. plans to purchase and sell $400 million worth of produce grown by local farmers this year. Associated Press
(Full-size photo)

LITTLE ROCK, Ark. – Wal-Mart stores in Arizona now stock Grand Canyon sweet onions while aisles in New York display state-grown eggplant, as the world’s largest retailer says it has become the nation’s largest buyer of locally grown fruits and vegetables.

In Spokane, the Wal-Mart Supercenter on North Colton Street buys Walla Walla sweet onions and cherries from within the state, as well as potatoes and watermelon from Idaho.

Wal-Mart Stores Inc. plans to purchase and sell $400 million worth of produce grown by local farmers this year, an effort the company says will only grow. Academic studies show buying locally cuts down on transportation mileage while also assuring customers of a product’s provenance amid mass recalls.

“Wal-Mart would not be the first” to buy local, said Rich Pirog, associate director of the Leopold Center for Sustainable Agriculture at Iowa State University. “But they’re obviously, without question, the largest retailer to go down this route.”

Among retailers, Whole Foods Market Inc. of Austin, Texas, is perhaps best known for buying and selling locally grown produce, Pirog said. Others, like New Seasons Market stores around Portland, Ore., and Hen House Market stores in Kansas City, cater to customers looking for fresh produce.

For Wal-Mart, which leverages bulk purchases to keep prices down, buying from local farms might not appear to fit the company’s strategy. However, the Bentonville, Ark.-based company has focused on buying fruits and vegetables from farms closest to its distribution centers, making shipping easier while cutting down on trucking in produce from outside of the area, said spokeswoman Deisha Galberth.

For example, the retail giant once only bought peaches from a few suppliers. Now, Wal-Mart buys 12 million pounds of peaches annually from farms in 18 different states, she said.

Because of that, the company estimates it saves about 100,000 gallons of diesel fuel a year and cuts away 672,000 food miles – the distance produce travels from farm to a customer’s plate. That adds up to $1.4 million in annual savings, Galberth said.

“It’s one of the ways we’ve been able to keep costs down,” Galberth said. “Our customers right now are struggling with tough economic times and looking to us to provide them with products that are at the quality they want and a price they can afford.”

Wal-Mart considers locally grown produce anything farmed within a state’s boundaries. Galberth said customers will soon see signs near produce that indicate it comes from the same state. The company already has agreements with some states to have stickers and labels show the state certified the produce came from there.

Wal-Mart announced its commitment to locally grown produce Tuesday during an event in Georgia, highlighting that state’s cantaloupes, onions and watermelons. The move comes as the company continues a marketing campaign highlighting its environmentally focused practices.

Pirog said Wal-Mart’s entry into the locally grown market could have a rippling effect across an industry often associated with local farmers markets. Some restaurants and customers now are willing to pay a little more for fruits and vegetables they know came from local farmers, something Pirog said could change as Wal-Mart moves into the territory and negotiates.

Pirog said Wal-Mart also could be buying from a single large farm in a particular state, locking out other smaller operations. Wal-Mart did not name its suppliers, and Galberth declined to say what percentage locally grown produce represented among all the produce purchased by the company.

However, identifying locally grown food in store aisles can relieve customer concerns, especially after a recent salmonella outbreak linked to tomatoes sickened at least 869 people across the country.

“Local food can answer that question,” Pirog said. “It can answer a question of where it comes from and how it was grown. That is still somewhat of a mystery to most consumers when they buy food at the store. … That’s what consumers are

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