WALMARTING THE FOOD CHAIN - Foodopoly: The Battle Over the Future of Food and Farming in America - page 42

of these suppliers represents only a very small portion of Walmart's total business, but the relationship is a
great deal more important to the supplier. It is such a large customer that they cannot choose to forgo any
demands that are made upon them.
The incredibly uneven power dynamic between Walmart and goods suppliers puts it in an excellent po-
sition to make demands, and Walmart does. Food processors, meatpackers, and other suppliers cannot sac-
rifice their sales to major retailers, but the retailers can easily switch to alternative suppliers. The pressure
to cut costs has pushed companies like Levi's, Huffy, Rubbermaid, and RCA to close up manufacturing
facilities in the United States and move them overseas. It has also pushed food producers such as Vlasic
into bankruptcy for failing to make Walmart's price-point demands. This pressure travels all the way down
the food chain and has led to increased consolidation in all segments of the food industry.
Lynn gives the example of Walmart's ability to influence Coca-Cola. He says that it “is the quintes-
sential seller of a product based on a 'secret formula.' Recently, though, Wal-Mart decided that it did not
approve of the artificial sweetener Coca-Cola planned to use in a new line of diet colas. In a response that
would have been unthinkable just a few years ago, Coca-Cola yielded to the will of an outside firm and
designed a second product to meet Wal-Mart's decree.” 29
Walmart's negative effects go beyond the food system. Well-known activist and author Anna Lappé,
who is involved in stopping Walmart's expansion into New York City, noted in a Civil Eats blog post:
We also have plenty of evidence now that when Walmart moves into town, the company puts small businesses
out of business and sucks capital out of the community. For every dollar spent at a Walmart, only a small fraction
stays to benefit the local economy. We've seen enough evidence, too, that the company has a long, dark track
record of sex discrimination and workers' rights abuses.
Let's be clear, expanding into so-called food deserts is an expansion strategy for the company. It's not a char-
itable move. Making a big PR splash about improving the health qualities of its food is a smart tactic to deflect
attention from the real impact of Walmart on the quality of life for Americans. (Is it a coincidence that this press
conference occurred the same week a new study was gaining attention that tracked health and population data
and found links between Walmart expansion from 1996 to 2005 and increased rates of obesity?) 30
In 2005, during a low point in the company's public image, Walmart suddenly announced it was “going
green,” and it listed three goals the company would try to achieve over the coming years, including creating
zero waste, being supplied 100 percent by renewable energy, and selling more “ecofriendly” products. 31
Since that time Walmart has announced a number of initiatives, in an effort to cut energy costs and waste.
The company also obtained the positive image benefits of these decisions and won over many of its critics.
Former CEO Lee Scott noted that the rationale for these initiatives was purely economic, stating, “What
Wal-Mart has done is approach this from a business standpoint and not from a point of altruism.” 32 Wal-
mart is the largest private consumer of electricity in the United States, so any reductions in electricity usage
mean big savings for the company. While Walmart claims it wants to be more reliant on renewable energy,
it has also stated that it will not use renewable energy if it is more costly than traditional sources. This is
Walmart's line in the sand—once sustainability becomes unprofitable for the company, it will stop pursu-
ing it. In the meantime, the company has not made much progress in meeting its green goals.
The demand from Walmart and other grocery chains for large suppliers has driven the food manufac-
turing industry to consolidate even more than it had been. Today, the twenty big-brand food manufactur-
ers produce 60 percent of all the food sold in grocery stores. Food processing is one of the biggest single
manufacturing sectors in the economy. A merger-and-acquisition mania has created megamultinationals
that have offshored food production and led them to access ingredients and labor where it is cheapest. The
largest three giant food processors, PepsiCo, Nestlé, and Kraft, manufacture packaged foods that are so
ubiquitous in the American diet that most people eat their products every single day.