Is Wal-Mart (NYSE: WMT ) about to revolutionize food? The Bentonville behemoth's new plan to focus more heavily on locally grown produce and more sustainable farming methods could massively change how a large portion of our food is grown and sold.
Wal-Mart announced plans to double the amount of local produce it buys from small farmers over the next five years. It has aggressive plans for India and China, too, where it will peddle $1 billion worth of food grown by smaller farmers, and even help school them in sustainable farming practices, including measured use of water, pesticides, and fertilizers.
Wal-Mart has been growing its track record in environmental initiatives, including its planned sustainability scorecard for suppliers.
The megaretailer may be responding in part to consumers' rising awareness of the ethics of how their food is grown and sold. But while Wal-Mart is adapting to this mind-set, other businesses have it built into their corporate DNA. Whole Foods Market (Nasdaq: WFMI ) paved its way in the grocery sector by providing organic and natural goods. Chipotle's (NYSE: CMG ) Food with Integrity mission makes organic and/or naturally grown and raised ingredients the centerpiece of its menu.
Wal-Mart seems like an odd fit among such a "touchy-feely" crowd. Until fairly recently, the company's gotten a bad rap with large swaths of the general public. Consumers don't tend to fight off a Target (NYSE: TGT ) or Costco (Nasdaq: COST ) store opening in their town, but say the word "Wal-Mart," and many will go on the offensive to try to block its entry.
Wal-Mart's environmental initiatives could help the company shore up consumer goodwill -- a key priority, given the specter of slowing U.S. sales that's been dogging the retailer lately. Wal-Mart needs to drum up increasing traffic from beyond its traditional customer base, and sustainability initiatives could help change more consumers' minds about the retailer.
More and more people (and companies) recognize that environmental issues represent hidden costs that could harm wealth. As a result, the search for sustainable innovation is under way, and Wal-Mart's definitely charging hard toward the concept.
What do you think of Wal-Mart's plans? Can Wal-Mart win over more consumers with such initiatives? Give us food for thought in the comment box below.