At What Price?

Ready or not, Wal-Mart‘s going organic. What are the long-term implications of this decision?

Michael Pollan’s piece in last Sunday’s NY Times Magazine points out the potential benefits and pitfalls of Wal-Mart becoming perhaps the world’s largest purchaser/provider of organic foods. Wal-Mart is already the U.S.’s largest grocery retailer and, as the NY Times first reported in May, it has decided to acknowledge the trend of increasing organic food sales. While just a small fraction (estimated 2.5%) of the total food industry by sales, the organic market is expected to grow by billions of dollars over the next three years. Wal-Mart’s plan, on the surface, would allow access to healthier foods for millions of Americans; prices are expected to cap at no more than 10% above conventional food prices. Access (affordable prices, nearby locations) to healthier food choices has always been a stumbling block for some urban/inner-city and rural populations. In some places, you can’t simply drive to the nearest Whole Foods and pick up your free-range, hormone-free chicken or organic orange peppers. It would be great if those with the poorest nutritional options currently could have access to healthier, pesticide-free options. So what’s the downside?

One major concern is how Wal-Mart intends to achieve cost-containment. Producing organic food does cost more, and many organic farmers will not be able to supply big supermarket retailers at the prices and volume they desire. Will we see, one day not too far away, Wal-Mart purchasing all its organic produce from One Big Industrial Farm (recently gone organic, of course – and potentially non-U.S.)? Even more concerning, will Wal-Mart use its lobbying power to seek regulatory change, so that the very nature of what is means to be organic is legislated to something far less natural?

Even with today’s standards, organic does not necessarily mean healthy. For example, organic corn can be grown to produce organic high-fructose corn syrup for all the nation’s soda and snack-food suppliers. Does anyone really believe that’s you’re better off with organic HFCS than conventional HFCS? Perhaps we’ll have chemical-free diabetics; lots of them. And how about cows? Organic does not mean grass-fed; cows fed organic corn produce organic milk. The milk, however, is not only pesticide- and hormone-free; it is also devoid of much-needed omega-3 essential fats and beta-carotenoids.

We, as health-conscious consumers, need to carefully monitor how Wal-Mart carries out its plan. Can we successfully achieve the noble goal of increased access to healthier foods for all, while at the same time maintaining product quality for any? Only time will tell, but be certain – the clock is already ticking.