Walmart Aims To Drive Down Organic Prices With New Cheaper Line
Credit: Clare O’Conner
If you associate Walmart’s grocery aisles with cheap six-packs of sugary soda or bulk bags of chips, you’re in for a surprise when you next drop by a branch of the world’s largest retailer.
Starting this month, the big box giant aims to drive down the price of organic food nationwide with its new in-house line of 100 or so products in exclusive partnership with Wild Oats, a pioneering health brand of the 1980s.
Walmart’s new Wild Oats organic products — including kitchen cupboard staples like olive oil and black beans — will cost about 25 percent less than those sold by competitors, based on price comparisons of 26 national brands.
“We’re removing the premium associated with organic groceries,” Walmart executive vice president of grocery Jack Sinclair told reporters on Wednesday, adding that customers “have been asking for this.”
Indeed, internal research carried out by the Bentonville, Ark.-based store chain showed 91% of their shoppers would happily buy organic products at Walmart — for the right price. As it is, the retailer’s organic food segment has been growing faster than its main grocery business, said Sinclair.
Whether Walmart’s move into affordable organics will force competitors in the segment like Whole Foods and Trader Joe’s to drop their prices remains to be seen.
What is certain, according to Sinclair, is that the Wild Oats launch marks a win for the organic supply chain. Walmart’s sheer size and scale will drive overall demand, he said.
If you recognize Wild Oats’ name, it’s because the company once operated its own grocery stores. Born in Boulder, Colo. in 1987, the chain boasted 110 outlets across 24 states as recently as 2007.
Whole Foods acquired Wild Oats that year for $565 million, buying out billionaire majority shareholder Ron Burkle, who made his fortune buying and selling supermarkets.
In 2009, after a lengthy antitrust battle, the Federal Trade Commission forced Whole Foods to divest its holdings. Wild Oats’ stores were shuttered and its brand name shelved until now.
Wild Oats CEO Tom Casey described the company’s exclusive Walmart partnership as “a movement,” adding: “We’re passing on scalable savings.”
Walmart isn’t alone in its efforts to unseat Whole Foods as king of the organic category.
Just this week, Target announced a bold bid for a chunk of the health and wellness segment with its ‘Made to Matter’ collection of organic and sustainable products by household names like Chobani Greek yogurt and Burt’s Bees cosmetics.