Starting this month Walmart and Wild Oats are teaming up to sell a new line of organic food that is at least 25% cheaper than national organic brands, the Associated Press reports.
“We are removing the premium associated with organic groceries,” Jack Sinclair, Wal-Mart’s executive vice president of grocery, tells the AP.
And that appears to be the case when looking at Walmart-provided comparisons of the new Wild Oats product offerings versus national brands. Wild Oats’ 6-ounce can of tomato paste is priced at $.58, compared to a national brand organic version priced at $.98. A 32-ounce can of Wild Oats’ chicken broth sells for $1.98, while a national organic brand sells their product at $3.47.
Sinclair tells the AP, that Walmart will be able to reduce the cost of organic foods by making long-term commitments with producers who will then have incentive to grow more.
Nearly 100 pantry items will be unveiled under the Wild Oats label in the next several months, adding to the nearly 1,600 organic food items the label already carries, officials say. However, the company is taking a rather conservative approach to the rollout by only offering the items in half its 4,000 U.S. stores.
The move to create an organic line is the company’s response to its own 2011 survey that found 91% of Walmart shoppers would consider purchasing products from an affordable organic brand at the store.
Analysts tell the AP that the new venture could be a game changer for the organic food industry. Walmart’s strategy with lower-priced goods could put additional pressure on other retailers, like Whole Foods, to lower their prices.
Organic food and other products generated $31.5 billion in sales in the U.S. in 2012, the Organic Trade Association reports. While sales were up from the previous year, high prices have kept the industry from exploding with growth.
For its part, Wild Oats helped to pioneer the organic food trend in the late 1980s and operated 110 stores in 24 states and Canada. It was bought out by Whole Foods in 2007 and later dumped by the company in 2009, when it largely disappeared as a brand.
Health advocates say the new line can go a long way in helping consumers and the environment be healthier.
“Walmart’s big move into organics means that more of our land will be farmed with organic methods and more Americans will have access to organic food at prices lower than they’d find at other retailers,” Michael F. Jacobson, executive director for Center for Science in the Public Interest, says in a statement. “Like with everything else Walmart does, there will be trade-offs here. Regardless of the company’s behavior in other spheres, it has demonstrated before that its marketplace power can help drive valuable progress on nutrition and the environment.”