THE GREEN GIANT DOESN’T LIVE IN CALIFORNIA ANYMORE - Foodopoly: The Battle Over the Future of Food and Farming in America - page 56

Unfortunately, an even more bloodthirsty environment in the grocery industry is on the horizon. Wal-
mart and other large and highly capitalized firms are continuing to expand their reach, capturing more mar-
ket share. Participants at Supermarket News's 16th Annual Roundtable said that “the industry could be in
for a new round of consolidation activity next year [2012] in which some major national chains go after
some of the larger regional operators.” 5
Fulfilling the prediction, in March 2012, BI-LO and Winn-Dixie merged to become the ninth-largest su-
permarket chain in the country, with 688 grocery stores throughout the Southeast. Gary Giblen, managing
director of Aegis Capital in New York, summed up the situation in the grocery industry: “Like sharks that
die if they stop moving forward, these chains are going to grab growth one way or another.” 6
Walmart continues to drive consolidation through its aggressive moves into urban areas, utilizing a
“smaller format” called Walmart Neighborhood Markets. The company's president and chief executive of-
ficer, Mike Duke, wrote in his April 16, 2012, letter to shareholders, “There is no doubt Walmart is the
best-positioned global retailer.” He noted that net sales in 2011 increased by 5.9 percent, to $443.9 billion. 7
In 2011, First Lady Michelle Obama and several good-food advocates embraced the announcement that
Walmart would make produce more affordable as part of its “Initiative to Make Food Healthier and Health-
ier Food More Affordable.” A key element of the program, according to the company's press release, is
“Making healthier choices more affordable, saving customers approximately $1 billion per year on fresh
fruits and vegetables through a variety of sourcing, pricing, and transportation and logistics initiatives that
will drive unnecessary costs out of the supply chain.” 8
This is the very strategy that already has driven produce growers out of business and changed the struc-
ture of the produce industry. Walmart shifts the cost of production to the producer to increase its profit-
ability. A story in the company's 2012 Global Sustainability Report discusses a project it engaged in with
Tuskegee University and the USDA to identify local growers, which resulted in an agreement to supply
shelled peas to the megaretailer. While Walmart is proud of this project and its work to overcome the chal-
lenges, it was Tuskeegee that picked up the cost for the specialized shipping containers used to transport
the shelled peas, not Walmart. The report notes: “With no previous access to a large retailer, these farmers
did not have the financial resources necessary to pay for the containers, labels and more they would need
to make this partnership a reality. Determined to open the door to this potentially long-lasting economic
opportunity, Tuskegee University covered these initial expenses.”
The healthier food initiative is just one more example of Walmart's attempt to ride the wave of interest
and support for local agriculture. The superstore defines local as having been produced in the same state
it is sold in. Although most in the local-food movement would argue with the adequacy of this definition,
even if this goal is taken at face value, Walmart must work with large shipper/packers to accomplish it.
Furthermore, the chain's goal for local production was averaged for the entire United States, so it is likely
that their sales in California, Florida, Texas, and Washington enabled them to achieve it.
Walmart's relationship with Frey Farms provides a good illustration of the company's loose definition
of local. In a 2006 press release Walmart touted its “commitment to purchase from local growers for dis-
tribution to stores in their areas in support of locally grown agricultural products,” and it mentioned Frey
Farms in particular, “to provide visibility to [Walmart's] commitment to Illinois agriculture and growers
around the country.” 9
Frey Farms' Web site, however, notes that it is “a year-round supplier of fresh fruits and vegetables,”
and that “[t]he Frey Farms Produce headquarters is located in rural Wayne County northeast of Mt. Vernon,
IL and is supported by strategic shipping locations in Illinois, Indiana, Missouri, Georgia, Florida and
throughout the Midwest. . . . We service our customers by way of direct store delivery routes and shipments
to major distribution centers.” 10