Whole Foods is on notice, sort of. Walmart has announced plans to launch a price-competitive line of organic products in 2,000 of its stores.
The news comes after Target made a similar announcement that it was launching a non-GMO organic line of private label products.
“We know our customers are interested in purchasing organic products and traditionally, those customers have had to pay more,” Jack Sinclair, Walmart’s executive vice president of grocery said to Food Navigator. “We are changing that and creating a new price position for organic groceries that increases access.”
Walmart’s organic products will bear the Wild Oats brand. Wild Oats was a natural food chain purchased by Whole Foods in 2007. Two years later it was sold after anti-trust concerns, but its private label brand lives on. (Current owner Yucaipa sells its products in Fresh & Easy stores.)
Whole Foods says it’s not concerned about the products competing, though. CEO Walter Robb told CNBC that the Walmart customer “overlaps least with us.”
That may be true now. But can Walmart lure in organic-minded shoppers who would normally steer clear of the retail giant? Or will it expand the demographic, turning its existing customers who have avoided organic food out of price concerns, into organic consumers?
Like Target, the Walmart products will be processed foods such as cereal and snacks—categories that, while cleaner than non-organic versions, still can contain questionable ingredients including high amounts of sugar, sodium and vegetable oils.
Michael F. Jacobson, Center for Science in the Public Interest executive director said the move means trade-offs. “Regardless of [Walmart’s] behavior in other spheres, it has demonstrated before that its marketplace power can help drive valuable progress on nutrition and the environment.”
Food Navigator reports that 2013 sales of organic products in the U.S. were worth $35 billion, and according to USDA, “it helped an additional 763 producers become certified organic in 2013, up 4.2% from the previous year.”
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