Walmart’s New Healthy Food Strategy: PR Smoke?

Michelle Obama and Walmart

First Lady Michelle Obama added the power of her presence to Walmart’s announcement of its Nutrition Charter, an initiative for healthy eating. Mrs. Obama has championed the problem of childhood obesity since her husband took the office of President in 2009.

The three key elements to the Walmart initiative are:

  • Reformulate products to improve nutrition by 2015: reduce sodium 25%, reduce added sugars 10%, and remove all remaining industrial produced trans fats.
  • Make healthy food more affordable by reducing the cost of fruits and vegetables and healthier options.
  • Develop a “front of pack” healthy seal to make it easier for customers to make healthy choices.

The retailer also plans to address the problem of “food deserts” – poor urban areas that do not have supermarkets. Studies have linked low-income neighborhoods to higher rates of obesity; price and availability of healthy foods are key factors in increased obesity rates.

Unfortunately while Walmart is expressing its concern and commitment to feed the hungry, it is contributing to the population of working poor. The average Walmart “associate” makes $11.75 an hour, slightly below the national average for retail employees of $12.04 per hour; totaling about $20,700 a year in wages.

In a one-earner household, $22,000 is the poverty line, and in 2008, 65% of working families that received SNAP were single-parent families. One must assume that a large number of the 1.4 million people working for Walmart In the US (1% of the 140 million working population) are represented. In Ohio alone, for example, more than 15,000 of its workers are on Medicaid, and more than 12,000 are receiving food stamps.

Coincidentally, published just two days before the Walmart press conference were the results of a report indicating that Walmart supercenters may actually be contributing to weight gain.

Researchers found that one new Walmart supercenter per 100,000 residents meant an average weight gain of 1.5 pounds per person sometime over a 10-year period dating from the store’s opening. It also boosted the obesity rate by 2.3 percentage points, meaning that for every 100 people, two who weren’t obese ended up in that category after a superstore opened.

The presence of a Walmart supercenter causes price pressure that drives down prices between 8% and 24% across the board; however it’s likely that prices drop more steeply on processed foods than they do on fresh fruit and vegetables.

As part of its Nutrition Charter, Walmart has committed to cutting prices on thousands of its packaged foods and as well as fresh fruit and vegetables. Lowering the prices on fresh fruits and vegetables will come from Walmart’s own profits, the company says, not by asking the farmers to cut prices for their crops.

Helena Bottemiller, correspondent for Food Safety News, asked Walmart’s VP of Sustainability, Andrea Thomas, how that would happen. Her response:

There’s a lot of things through the supply chain that add costs. If you have fruits and vegetables traveling long distances that actually adds costs. With local farmers, we can [directly] supply great products to our stores; the quality is great and they don’t have to travel so far, so we save money.”

Walmart expects to save consumers $1 billion annually by eliminating inefficiencies and “unnecessary costs” in the produce supply chain.

Yes, Walmart says they are going to sell healthier food, i.e., less salt, fat and sugar in processed food.

Yes, Walmart says that reducing the price of fruits and vegetables doesn’t mean they will pay farmers less – they will just reduce their profit margin. How long will that last when stockholders start pushing for higher profits?

Yes, Walmart says they will save money by buying fruits and vegetables from local suppliers to save the cost of transportation. Unfortunately, those “local” producers will most likely be industrial farms that can push their production processes to cut costs. Small, independent farmers don’t have the capital, the staff, or the processes to keep cutting back on the prices they need to charge.

It is more important than ever for us to build local food networks of small farmers and producers to insure an alternative to the national/international spider web of food production and distribution that is developing under the control of a handful of global food companies collaborating with the world’s largest retailer.