How Wal-Mart Threatens Organic Food

Arun Gupta

Moyers & Company / Op-Ed

Published: Tuesday 4 July 2014

Organic does not necessarily mean “good food,” in the Michael Pollan sense of a bowl of fresh vegetables and whole grains grown free of industrial toxins. These days, the organic label is more likely to be slapped on bags of barbeque potato chips than boxes of dirt-caked beets.

When Wal-Mart announced in April that it was introducing the Wild Oats brand of organic food products in 2,000 stores, some food-justice advocates grew excited. In U.S. News & World Report, one writer praised Wal-Mart for embracing “sustainable products and sustainable sourcing.” The Guardian declared that Wal-Mart was providing low-income shoppers with “an organic option they can afford.”

Others fear Wal-Mart’s history spells trouble for organics. Since the 1980s, Wal-Mart has revolutionized the US economy from a “push” system, in which manufacturers determined what was sold on store shelves, to a “pull” system, in which retailers set the terms. Wal-Mart has induced its suppliers, including iconic companies such as Huffy Corp (maker of Huffy bicycles), Levi Strauss & Co. and Master Lock, to relocate factories and jobs to impoverished countries while skimping on the quality of their goods. Critics worry the Arkansas-based retailer will “Wal-Mart” organic food, pushing farms to relocate to unregulated regions abroad while undermining organic standards at home.

Wal-Mart told The New York Times its new line of organics will remove “the premium associated with organic groceries” so that they were “priced the same as similar non-organic brand-name goods.” Mark Kastel, co-founder of the Cornucopia Institute, a Wisconsin-based farm policy research group and owner of a 160-acre organic farm used to pasture beef cattle, allows that this is one possibility. He says Wal-Mart’s mastery of supply-chain logistics, which enables it to bring more goods to market cheaper and faster than any other company, could “expand the availability of organic food in the United States.” That could lower costs for shoppers, create more demand for organic farmers and spur price reductions at Whole Foods, the leading national health-food chain derided as “Whole Paycheck” for the high price of many of its organic offerings. But Kastel thinks it’s more likely Wal-mart will undermine organics. “If Wal-Mart [pushes organic food] at the expense of organic farmers,” he says, “then everyone loses.”

Green-washed organics

Wal-Mart’s expansion into organic turf is just the latest chapter in the evolution of organic food from a fringe fancy of back-to-the-land enthusiasts to a $35-billion-a-year industry. Nearly two-thirds of Americans today say they “sometimes” purchase organic food and beverages, which are grown without artificial or sewage-based fertilizers, pesticides, genetically modified organisms and most uses of hormones and antibiotics.

Organic does not necessarily mean “good food,” in the Michael Pollan sense of a bowl of fresh vegetables and whole grains grown free of industrial toxins. These days, the organic label is more likely to be slapped on bags of barbeque potato chips than boxes of dirt-caked beets. But the intent of the organic movement is to support regional food systems, connect consumers directly to food producers, minimize food-borne illnesses and pesticide-based disease among farmworkers, consumers and children and enable family farmers to make a living while acting as stewards of waterways and soil, wildlife and agricultural biodiversity. Food-justice advocates fear that if Wal-Mart nabs a bigger slice of the organic pie, it will undermine these principles.

That’s what happened when Wal-Mart first entered the organic market in 2006, hoping to lure in consumers willing to spend more on food than its base of cash-strapped shoppers. Kastel says the attempt “failed miserably,” but Wal-mart did expand its organic line to more than 1,600 grocery items and became a leading retailer of organic milk.

However, much of the milk was “green-washed,” claims Cornucopia. Accounting for one-third of US grocery sales, Wal-Mart needs huge economies of scale to feed its supply chain. For organic milk, it relied on agribusinesses like Horizon Milk and Aurora Dairy. Kastel says that because these dairies often confine 4,000 cows to pens in a single facility, it’s impossible to provide so many cows with pasture, as required under federal organic guidelines, while milking them multiple times a day.

Cornucopia has filed complaints against Horizon’s former parent company, Dean Foods, accusing it of running huge operations that violate organic standards, using conventionally raised heifers and adding illegal additives to its milk. Cornucopia alleges that such practices enabled Horizon to undercut small organic dairies and push them out of business, all of which Dean and Horizon denied. A 2008 report by Cornucopia claims that Wal-Martsourced its organic goods from “major agribusiness … with little or no history of manufacturing organic food,” as well as “foreign sources, and domestic industrial-scale farms.” Also alarming, Wal-Mart’s new organic venture appears to involve some sleight of hand. Kastel says Wal-Mart’s announcement is “intentionally confusing” because “Wild Oats is a mix between organic and conventional [foods]. It’s a disservice to consumers.” Phil Howard, who studies the organic-food industry and teaches community sustainability at Michigan State University, says Wal-Mart’s influence is mainly indirect. For example, it wouldn’t explicitly tell companies to relocate to East Asian sweatshops or cheapen the quality of goods, but relentless cost-cutting left few other options. When vendors did not follow Wal-Mart’s dictates, it’s been known to attack their livelihood by outsourcing production of the goods it desired.

Big business has other corrupting effects on organic food. Over the past 10 years, standards have been watered down, USDA regulations have faltered and outright cheating has occurred. In 2006, Cornucopia caught Wal-Mart hanging organic food signs in grocery sections that contained non-organic foods. Howard says the erosion of standards is attributable to “constant pressure over the years from big manufacturers.”

Opaque outsourcing
Another troubling issue is that the acreage of organic farmland in the United States is unable to supply the current demand for organic food. That means much of the organic food found in supermarkets is now being grown overseas. Given how the food industry operates, it’s largely a mystery as to where or under what conditions. Country-of-origin laws to disclose food sources are weak, and companies can claim suppliers are “trade secrets.” Howard says Wild Oats will exacerbate this trend because it’s a private label. “It’s not transparent at all,” he says. “It gives the retailers a lot of power, and Wal-Mart can change suppliers without even having to change the label.”

That was the concern in 2006. Ronnie Cummins, national director of the Organic Consumers Association, told the New York Times at the time that the megaretailer would wind up outsourcing from “places like China where you’ve got very dubious organic standards and labor conditions that are contrary to what any organic consumer would consider equitable.”

To forestall this, Kastel advocates stringent international oversight and more government support for all the “wonderful organic food product suppliers all over the United States and farming families” who have been working the land for generations.

If Wal-Mart succeeds at dominating organic, it will be a triumph of its enormous appetite for profit at the expense of organic farmers, consumers and standards.