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April
2006 |
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In 1991 Wal-Mart founder Sam
Walton said, “In ten years, we’re going to be the biggest
supermarket in the country.”
Guess what—he wasn’t messing around.
That might seem strange to people who don’t live anywhere near a Wal-Mart,
but the world’s top corporation has catapulted into the position of number
one grocery retailer in the country, providing its primarily low-income rural
and suburban constituents with cheap food. Today, Wal-Mart holds an estimated
15 percent of the U.S. grocery market and roughly eight percent of the global
grocery sector. And by next year, Wal-Mart is expected to dominate 35 percent
of American grocery retail. Since it began selling food, roughly 10,000 supermarkets
have closed their doors.
While the others on the list of the top five food retailers in the country—Kroger’s,
Costco, Albertson’s and Safeway—still dominate in urban areas,
Wal-Mart’s staggering growth has put everyone on alert. Grocery retail,
one of the most cut-throat businesses in the world, is getting even more vicious
with the rise of Wal-Mart, leaving everyone scrambling to hold on to their
share of the market.
Part of Wal-Mart’s rocketing to supermarket stardom can be attributed
to its selling up to one-third fewer items than its competitors, and not charging
the usual ‘slotting fee,’ a price companies pay to get product
space on store shelves. In the New York area, that can be $150,000 per product.
As it does in the retail sector, Wal-Mart puts the onus onto its food producers,
driving prices down. With everyone vying to be one of the 10,000 items sold
in Wal-Mart, competition is fierce. And where does Wal-Mart go for the cheapest
of cheap goods? China.
Wal-Mart has an extremely lucrative relationship with China, accounting for
ten percent of the country’s exports to the U.S. That’s right:
ten percent. Meaning approximately one in ten shipping containers leaving China
with goods for the U.S. is bound for Wal-Mart. As the world’s top grower
of apples and garlic, we can expect China to be growing even more food—to
feed Wal-Mart shoppers. And those hanging in the balance are the ones who grow
our food: our farmers.
Eye on Organics
For those who don’t shop at Wal-Mart and think their business practices
don’t affect your food choices, you should think again. Even consumers
of organic and natural foods have become an increasingly desirable target of
multinational corporations.
That’s right. You’ll learn in our pages that many of the organic
and natural brands we love, like Tom’s of Maine, Rice Dream, Boca Burgers,
Knudsen juices, Gimme Lean, Yves, Silk and Jason’s cosmetics are all
owned by multinational corporations, such as Hain Celestial Food Group (with
principle stockholders like Heinz, Lockheed Martin, Monsanto and Pfizer), Kraft/Philip
Morris, Dean Foods... You get the picture.
Getting in on the action, Wal-Mart has significantly upped its organic product
sales and is now the nation’s top organic milk retailer. Early last month
the company announced plans to double its organic product offerings within
the next few weeks. At last year’s annual meeting CEO Lee Scott enthused
he was “excited about organic food, the fastest growing category in all
of food, and at Wal-Mart.” While he says Wal-Mart’s intention is
to make organic food affordable, I’d take that idea with a grain of salt.
To be sure, Wal-Mart wouldn’t move into the organic sector unless there’s
profit to be had. And with major corporations getting in on the ground floor,
we can expect to see them use their corporate muscle to manipulate organic
standards to suit their purposes, which will not be to maintain safe food.
Nor will the corporate takeover of organics help out farmers. They will no
doubt bear the brunt of this race to the bottom line.
Whole Foods or Whole-Mart?
If you shop for natural foods, increasingly your option is Whole
Foods—and that’s it. Like with Starbucks and local coffee shops,
once a Whole Foods lands in a neighborhood, independent natural/health food
stores go out of business. Whole Foods CEO John Mackey has openly expressed
his admiration of Starbucks. Last year, at an animal rights conference, Mackey
confidently predicted that with their current growth rate, 10-15 years from
now Whole Foods will be second to Wal-Mart. Second.
Many vegans and vegetarians welcome the expansion of Whole Foods. It conveniently
provides a variety of products, where there used to be just a few in a local
health food store. But sometimes unchecked growth is unsustainable and we have
to realize when enough is actually a worthy goal. Is Whole Foods turning into
Whole-Mart?
Where Does Your Food Come From?
It’s a simple question, but for most of us, the answer is
rarely easy and often quite disparate.
It wasn’t until a few weeks ago that I really gave all of this much thought.
As we delved into research for this issue, I kept thinking about the fact that
the overwhelming majority of Americans don’t get their food from local
farms—myself included. Generally, we don’t know the people who
grow or sell our food, or where it comes from. Americans get their food from
grocery retailers, anonymously packaged and ready to go. As I looked into it
more and more I started to realize how our food “choices” are actually
dictated by a small fraction of the retail sector, and that our choices are
quickly dwindling.
Those most invisible and vulnerable in all of this expansion are the anonymous
faces behind our food choices: small farmers. What will become of them as competing
food retailers elbow each other to the top?
A great resource for understanding the growth of agribusiness and the
food retail sector is the Agribusiness Accountability Initiative at www.agribusinessaccountability.org.
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