Underscoring a broad movement toward healthier eating and its desire to open more urban stores, Wal-Mart Stores Inc. announced an aggressive initiative to cut prices on fresh foods, reformulate thousands of its private-label products to make them healthier and ask its suppliers to do the same.
The Bentonville, Ark.-based retail behemoth joins a host of packaged-food companies’ efforts to cut sodium, sugar and trans fats in the products that Americans buy. But as the nation’s largest grocer, Wal-Mart has more power to shape what consumers buy and eat. Whether the company’s aggressive plan will affect Americans’ waistline remains to be seen.
Wal-Mart has more than 8,700 retail units under 59 different names in 15 countries, the company said. In the fiscal year ending Jan. 31, 2010, its global sales were $405 billion.
“No family should have to choose between food that is healthier for them and food they can afford,” Bill Simon, chief executive of Wal-Mart’s U.S. stores, said Thursday during a press conference in a low-income Washington neighborhood. He was joined by first lady Michelle Obama, who leads a government initiative against childhood obesity.
As part of a “Nutrition Charter,” Wal-Mart will cut prices on fresh fruits and vegetables, increase support of nutrition education programs, build stores in “food deserts,” and reduce sugar and sodium in some of its private-label products by 2015.
The reaction to Wal-Mart’s announcement was mixed.
Toby Smithson, a dietician with the Lake County Health Department, said Wal-Mart’s pledge seems to be aligned with concerns she hears at community meetings, specifically of making healthier food less expensive and more accessible.
“I see this as a positive, and answering some of the questions being brought up about our obesity issues,” she said.
As for the product reformulations, Jim Hertel, managing partner of Willard Bishop, a Barrington-based retail consulting firm, described the Wal-Mart announcement as “important but not earth-shattering.”
Hertel said that many packaged-food companies have slowed better-for-you reformulations as a result of the recession. Many of those that have been completed, he added, were introduced as a healthier alternative, rather than as a replacement for the original recipe.
However, because Wal-Mart is the nation’s largest grocer by a significant margin and can account for as much as 30 percent of a packaged food company’s retail business, it’s a move that can’t be ignored, Hertel said.
“People have to sit up take notice, and they have to react,” he said, meaning that it may force other companies to make their products healthier or at least be more vocal about changes already in place.
He added that while Wal-Mart’s private-label business is formidable, it likely represents about 25 percent of the chain’s grocery sales, and as the chain will be reformulating only select products, “it’s not like we’re all going to lose 15 pounds.”
Wal-Mart’s announcement comes just weeks before the Food and Drug Administration’s release of revised dietary guidelines. It also comes as the world’s largest retailer tries to win support to open stores in urban areas, including Chicago.
Wal-Mart has struggled to gain a foothold in America’s urban core. The chain fought to open its first supercenter in Chicago, against the loud cries from grocery workers’ unions. The chain recently announced plans to open stores in Washington, D.C., but it is meeting with particular resistance from unions in New York City.
Steven Silvers, a corporate communications strategist for Denver-based GBSM Inc., a management consulting firm, said that it’s hard to understate “the issues and perceptions and controversies that need to be navigated for Wal-Mart to build an urban store.”
By partnering with the first lady and publicly announcing a fight against the obesity epidemic and food deserts, Silvers said, the company likely hopes to gain the support of communities where it’s seeking to set up shop.
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Wal-Mart joins Kraft Foods Inc., General Mills Inc., and PepsiCo Inc. in their promise to Obama last spring to cut calories, sodium or portion sizes in certain products. While Wal-Mart is the biggest player to launch such an initiative, all of the major packaged-food brands have been reformulating select products for years, reducing calories, sodium and trans fats and adding vitamins, antioxidants or whole grains.
“We share Wal-Mart’s goal of making the foods consumers love better,” a Kraft spokeswoman said in an e-mailed statement. “That’s why we continue to have ongoing and major (health and wellness) improvement initiatives in place across our portfolio.”
She cited calorie, sodium and sugar reductions, as well an effort to add whole grains to Nabisco products.
General Mills said it has “improved the health profile of 25 percent” of its U.S. retail products in fiscal 2010, and it has improved more than 60 percent of its U.S. retail portfolio over the last five years.
Many health experts, however, have said such efforts miss the point.
Dr. Mitchell Roslin, chief of bariatric surgery at Northern Westchester Hospital in New York, said that while all of his patients “want to be healthy, when they’re hungry the most important thing is to get something they can afford and eat it.”
Roslin said expense and inconvenience are the main obstacles to eating healthy.
For the grocery industry, Wal-Mart’s initiative is part of a trend toward helping consumers find healthier options. But that has led to confusion among consumers, as food products sport descriptions such as “natural,” “organic” and “no preservatives.” In an attempt to level the playing field, the FDA shuttered “Smart Choices,” an industry-led program that labeled healthier choices based on an unregulated set of criteria, in 2009.
A number of grocery chains have developed their own systems for helping shoppers sift through the better-for-you clutter.
Brussels-based Delhaize Group SA has instituted a “Guiding Stars” program at 1,500 U.S. grocery stores, including Food Lion and Hannaford, ranking healthier foods with a star system. The healthiest items, such as fresh fruits and vegetables, get several stars. Others, like Dominick’s, owned by Pleasanton, Calif.-based Safeway, use store rewards cards to track purchases and make recommendations about healthier options.
Tribune reporter Sandra M. Jones contributed to this report.
Five pillars of Wal-Mart’s ‘Nutrition Charter’
The company said it will:
*Reformulate thousands of its private-label packaged-food items by 2015 so the products contain less sodium and sugar and no partially hydrogenated fats and oils.
*Make healthy choices more affordable, saving U.S. customers about $1 billion a year on fresh fruits and vegetables. Wal-Mart said it will do this through a variety of sourcing, pricing, transportation and logistics initiatives. It also plans to cut or eliminate the “price premium” on items containing less sodium, sugar and fats.
*Develop criteria for a simple “front-of-package” seal so consumers may identify healthier options, such as whole-grain cereal, whole-wheat pasta or unsweetened canned fruit.
*Build stores in underserved areas in urban and rural America.
*Step up charitable giving to programs that educate consumers about healthier foods.