Inside This Issue - News
Walmart ups ante
February 7th, 2011
WASHINGTON – Walmart has unveiled a major initiative designed to make packaged food more healthful and healthier food more affordable to all consumers.
The program was developed with the participation of first lady Michelle Obama, whose “Let’s Move” campaign has focused national attention on the issue of making healthful food more affordable and accessible to all Americans.
The program, which was revealed at an event in the nation’s capital attended by the first lady, consists of five key elements:
• Reformulating thousands of packaged food items by 2015 to reduce sodium and added sugars and eliminate all remaining industrially produced trans fats, both in Walmart‘s Great Value private brand and in national brand items from suppliers who collaborate with the retailer.
• Making healthier food choices, especially fruits and vegetables, more affordable through a variety of initiatives that will eliminate unnecessary costs from the supply chain. In addition, the company says it will dramatically reduce or eliminate the price premium on key “better-for-you” food items.
• Developing strong criteria for a simple seal to appear on the front of food packages and help consumers easily identify more healthful food options such as whole grain cereal, whole wheat pasta or unsweetened canned fruit.
• Building stores in underserved communities that constitute food deserts, where fresh and affordable groceries are particularly lacking.
• Increasing Walmart’s charitable support for nutritional education programs.
The reformulation of packaged food will first target key categories of Walmart’s Great Value private label, while the retailer promises to work with suppliers to reformulate national brand goods within the same categories by 2015. The goals include reducing sodium by 25% across a broad range of grocery items, including grain products, lunch meats, salad dressings and frozen entrees; reducing added sugars by 10% in dairy items, sauces and fruit drinks; and removing all remaining industrially produced trans fats in all packaged food products.
As the company pointed out, to the degree that branded suppliers reformulate their offerings beyond what they sell to Walmart, Americans will stand to benefit from more healthful food whether they shop at Walmart or not. That outcome would echo the impact of Walmart’s generic drug pricing program, which reshaped the retail pharmacy business in this country by compelling competitors to respond.
"No family should have to choose between food that is healthier for them and food they can afford," said Bill Simon, president and chief executive officer of Walmart U.S. "With more than 140 million customer visits each week, Walmart is uniquely positioned to make a difference by making food healthier and more affordable to everyone. We are committed to working with suppliers, government and nongovernmental organizations to provide solutions that help Americans eat healthier and live a better life."
While Walmart is by no means the first company to launch healthful food initiatives, its very scale as the world’s largest retailer and the nation’s largest grocer lends enormous significance and weight to the move. Indeed, if the program has anything like the impact of the $4 generic prescription program Walmart introduced in 2006, then the nutritional landscape in this country could be changed.
In applauding the move, Michael Jacobson, executive director of the nonprofit Center for Science in the Public Interest, acknowledged the huge impact Walmart can have.
"Walmart’s action should virtually eliminate artificial trans fat and significantly reduce salt in packaged foods and, most importantly, prevent thousands of fatal heart attacks and strokes each year," he said.
In an interview with The New York Times Jacobson likened Walmart’s influence to that of the Food and Drug Administration, in effect pushing the entire food industry in a more healthful direction. However, Jacobson regretted that Walmart’s sugar reduction target is not more aggressive and ignores altogether added sugars in soft drinks, which are considered a major contributor to childhood obesity. He also wished the time line was shorter than five years.
By leveraging its everyday low-price model and implementing a number of sourcing, pricing and logistical initiatives, Walmart estimates it can save its customers about $1 billion per year on fresh fruits and vegetables, according to Andrea Thomas, senior vice president of sustainability.
The initiative is closely tied to Walmart’s domestic expansion plans, which have recently switched focus from its big Supercenters to developing smaller formats and prototypes that can be deployed in urban environments, including many that have been abandoned or ignored by traditional supermarket operators.
Walmart plans to consult with health organizations to develop a simple seal that will appear on the front of packages to enable customers to identify healthier food options. The seal will be based on a nutritious food standard designed to increase the vitamins, minerals, whole grains, fruits and vegetables in food products while limiting saturated fats, sodium and added sugars.
The seal will appear later this year on Walmart’s private label products that meet the criteria, and the company will offer it to national brand suppliers whose products qualify.
"We are committed to working collaboratively and in partnership with our suppliers in order to make this initiative a success," says Simon.