Walmart, Wild Oats Unveil Cheaper Organic Line

Walmart and Wild Oats unveil cheaper organic line
Lisa Poole/AP
By ANNE D'INNOCENZIO

NEW YORK -- Low-cost leader Walmart is using its massive size to drive down the price of organic food items from tomato paste to chicken broth to make it more affordable for its low-income customers.

The world's largest retailer said Thursday that it has teamed up with Wild Oats to sell a new line of organic foods, starting this month, that's at least 25 percent cheaper than the national organic brands it carries and in line with the prices of its branded non-organic alternatives. Wild Oats helped pioneer the organic food trend in the late 1980s but has largely disappeared from store shelves since 2007.

Wild Oats' six-ounce can of tomato paste, for example, is priced at 58 cents, compared with 98 cents for a national-brand organic version. And a 32-ounce can of chicken broth under Wild Oats is priced at $1.98, compared with the $3.47 for a national-brand alternative, according to the discounter's survey of 26 nationally branded organic products available at Walmart.com.

Walmart Stores (WMT) is unveiling nearly 100 pantry items over the next several months, adding to the 1,600 organic food items it already carries in its stores. It's taking a cautious approach, planning to have them in about half of its 4,000 domestic namesake stores as it wants to make sure it can satisfy demand. The Bentonville, Ark., company will be the exclusive national retailer of Wild Oats.

"We are removing the premium associated with organic groceries," Jack Sinclair, Walmart's executive vice president of grocery, told reporters during a conference call Wednesday.

The move comes as Walmart and other traditional stores are eagerly trying to stake a bigger claim in the hot organic market as they see shoppers from all different income levels wanting to eat healthier.
Sinclair declined to comment on how big Walmart's organic business is, but he says sales of organic food are growing faster than nearly every category of non-organic food items. Still, high prices have put a lid on that growth at the discounter.

Walmart says that 42 percent of its customers surveyed in 2011 bought some organic or "natural" goods, according to outside research. According to its own survey, 91 percent of Walmart shoppers would consider purchasing products from an affordable organic brand at the store.

For Wild Oats, it's a big chance to revive its brand. Founded in Boulder, Colo., in 1987, Wild Oats operated 110 stores in 24 states and in Canada at its peak in early 2007. Whole Foods bought Wild Oats that year, but after an extensive regulatory battle, Whole Foods unloaded the chain in 2009, and the stores and its products disappeared. Billionaire Ron Burkle, the founder of private-equity firm Yucaipa Cos., was the largest stakeholder of Wild Oats by the time the name was sold to Whole Foods.

Wild Oats just started selling a line of fresh organic food like eggs and milk at Fresh & Easy stores in the U.S., a former division of Britain's Tesco. The U.S. stores were purchased by Yucaipa last year.

"We're invigorating our brand by bringing great tasting Wild Oats products to more customers than ever before," said Tom Casey, CEO of Wild Oats.

According to the Washington-based Organic Trade Association, organic food and other products generated sales of $31.5 billion in the U.S. in 2012, the most recent data available. The sales figure was up 10.3 percent from the year before and has more than tripled since 2002 when sales were $8.4 billion.

"The pie is growing and more consumers are coming on board," said the group's Barbara Haumann. She noted that all types of stores are benefiting from that growth.

In fact, earlier this week, Walmart rival Target Corp. announced it was upping the game on natural, organic and sustainable offerings.

Target, based in Minneapolis, announced it had selected 17 of the leading natural, organic and sustainable brands that already sell to its stores and challenged them to come up with new products or new twists. As a result, an exclusive collection of more than 120 items like non-aerosol air freshener and bleach-free baby diapers are hitting the shelves over the next few months.

Sinclair told reporters that Walmart will be able to reduce costs by making longer-term commitments with producers like tomato growers so they can have an incentive to grow more. When asked about what its other organic brands think of the move, Sinclair said that other labels don't span across all the food categories.

But Sinclair added that to make organic food more affordable, overall, "Prices are going to have to come down."


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12 Comments

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rstedfield

I view this with such mistrust. When was Walmart ever interested in anything but the Waltons and stockholders bankrolls? They still financially rape their employees with anything they can get away with! I will still support "ORGANIC" from anyone EXCEPT Walmart.

April 11 2014 at 1:31 AM Report abuse rate up rate down Reply
alfredschrader

Wild oats ? Or oat meal ? If you buy the big cardboard tube of oatmeal, you can make oatmeal cereal (mush), but here's an insider trick: In a big bowl dump in two cups of the rolled oats, two tablespoons of self rising flour, four tablespoons of sugar, one stick of margarine, and a few drops of water. Mix it all together with a fork. Then place small stacks of it on to a large cookie sheet and bake at 325 o F for 25 minutes. Turn the oven off and allow to sit.

The result are these amazing crispy-crunchy oat mountains.

April 10 2014 at 7:09 PM Report abuse -2 rate up rate down Reply
1 reply to alfredschrader's comment
marti157900

Did you read the article? Please read before posting.

April 10 2014 at 9:38 PM Report abuse rate up rate down Reply
1 reply to marti157900's comment
Tom Wilson

alfred has visions of grandeur…. he's know for " mountains of mushy horse sht"

April 10 2014 at 11:18 PM Report abuse rate up rate down
pllove49

WOW...organic food in a box,bottle or can....yet can't keep safe fresh fruit veggies and meat...go figure

April 10 2014 at 1:35 PM Report abuse rate up rate down Reply
Fireball Roberts

I would not set foot in a crap-mart if they were giving their junk away for free. I will starve to death before I ever go in one. I wasted 12 years slaving for them greedy morons. When you get a few years in and do a good job, out the door you go. They brainwash their people. Thats why I quit, I would not play their games anymore. If people knew what went on behind closed doors they would not even go near a Wallymart.

April 10 2014 at 12:28 PM Report abuse +4 rate up rate down Reply
anthdif

OMG, they hire the elderly and handicapped, provide lower cost food when food prices are increasing significantly and help establish competitive rates on prices across the Board. What a terrible company, simply because they are not unionized. I guess one could say they are doing more for the middle class than any political organization or white house leadership.

April 10 2014 at 11:17 AM Report abuse rate up rate down Reply
paddleman1928

big business has be pushing for loosening the standards for "organic" food to the point that I would question if the stuff is actually "organic". My opinion.

April 10 2014 at 11:11 AM Report abuse +4 rate up rate down Reply
cvanac8550

organic foods ...made in China...no thanks......

April 10 2014 at 9:53 AM Report abuse +5 rate up rate down Reply
toosmart4u

I will never shop at wal mart until it brings in lots of American products and treat and pay their employees a decent wage.

April 10 2014 at 9:15 AM Report abuse +1 rate up rate down Reply
petpetdon

I don't believe that organic foods are any better.

April 10 2014 at 7:17 AM Report abuse +2 rate up rate down Reply
1 reply to petpetdon's comment
Judith

Actually they are if you're concerned about chemicals, antibiotics, and steroids in your food. Also, on blind taste tests, it's been found that people prefer the taste of organic melons, grapes, and pears to the conventional.

April 10 2014 at 12:14 PM Report abuse +5 rate up rate down Reply
1 reply to Judith's comment
cvanac8550

especially broccoli......

April 10 2014 at 7:05 PM Report abuse +2 rate up rate down