Waiting For Walmart

I can’t remember the exact phrasing, but we were discussing the issue of food regulation at our PACE Advisory Council when one of our Washington insiders piped in with a conversation-changing comment:

“If you think it’s difficult working with the government and EPA, just wait until Walmart is your regulator.”

It’s like one of those jokes someone tells that takes a few moments before the entire crowd gets it — but the more the people around the table thought about it, and then discussed it, the more they got it. As the world’s largest retailer of food, Walmart could, if it decided today, turn the food production industry upside down with a laundry list of demands regarding what is grown, how it is grown, how it is processed and packaged … name a variable that’s controllable, and they could insist it be controlled and documented.

Within the walls of our company, we have witnessed one of the most significant rearrangements of the cosmos you could imagine in the fresh plant industry, orchestrated by “big box” stores like Walmart and Home Depot. Two of our sister publications, Greenhouse Grower and Today’s Garden Center, have had an fascinating front row seat to the changes.

It used to be that growers of all shapes and sizes and specialties would vie for Home Depot business by offering quality plants at competitive prices — a great system for growers, but woefully inefficient for the retailer.

The solution was actually counter intuitive. Rather than control everything, which would require more overhead and oversight, Home Depot chose to control nothing. Nothing, that is, except for the rules of engagement.

Growers interested in producing plant material for Home Depot would need to be responsible for the plant material, from seed or cutting (including stocking and maintenance) up until the bar code on the plant is waved over the scanner. For that millisecond, the plant would be owned by Home Depot, and just as quickly relinquished to the consumer.

Richard Jones, my cohort who oversees editorial in our greenhouse and garden center markets, says that only a handful of growers now deliver all the plant material to Home Depot stores under these rules. The rest are growers who supply Home Depot’s suppliers, and who assuredly operate at a higher level of efficiency to keep the shelves stocked.

Richard admits that it ultimately improved the efficiency of a pretty disjointed production and distribution channel, but the point is, it changed radically.

Back to food production. In mid-January, I was in Kansas City preparing to give a talk when I received a New York Times article. The piece outlined Walmart’s plan to lower the sugar, unhealthy fat and excessive sugar content of its packaged foods, and take steps to lower the price of the vegetables and fruits it sells.

It was only a matter of time. Walmart has the buying power, a keen interest in sustainability and a desire to lead in these sorts of social issues. And it’s not likely to stop there.

How this ultimately evolves, and how long it takes, is anybody’s guess. But everyone up and down the crop production channel will need to be looking downstream at food retailers and consumers, and considering how to be sustainable and successful in a changing market.

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Paul Schrimpf Stories

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