Wal-Mart teams with Wild Oats to offer cheaper organic foods
April 10, 2014
by Eric Schroeder
BENTONVILLE, ARK. — Wal-Mart, the nation’s largest grocer, said it has teamed up with Wild Oats to offer organic food items that are at least 25% less expensive than the national organic brands it carries. The products will cover a broad variety of categories – from salsa and pasta sauce to quinoa and chicken broth — and initially will be available in about half of Wal-Mart’s 4,000 U.S. stores.
Wild Oats said it will feature the following lines at Wal-Mart:
• Wild Oats Marketplace Organic. The line adheres to U.S. Department of Agriculture guidelines for organic certification and includes everything from canned vegetables (15 oz) at 88c to a full range of spices such as paprika, curry powder and ground cinnamon (2 oz) starting at $2.48. Organic items represent nearly 90% of the Wild Oats offering.
• Wild Oats Marketplace. The line includes products with simple and real ingredients such as ready-to-prepare skillet meals (5.8 oz) at $1.50.
• Wild Oats Marketplace Originals. The line will offer new and uniquely formulated items, and will be available beginning later this year.
“We know our customers are interested in purchasing organic products, and, traditionally, those customers have had to pay more,” said Jack Sinclair, executive vice-president of grocery at Wal-Mart U.S. “We are changing that and creating a new price position for organic groceries that increases access. This is part of our ongoing effort to use our scale to deliver quality, affordable groceries to our customers.”
Tom Casey, chief executive officer of Wild Oats, said partnering with Wal-Mart allows Wild Oats to start a movement that “makes it easier than ever for customers to access affordable organic and natural products.”
“Our availability at Wal-Mart will allow us to finally pass along scalable savings directly to consumers,” Mr. Casey said. “We are reinvigorating our brand by bringing great tasting Wild Oats products to more customers than ever before.”
Wal-Mart and Wild Oats will introduce nearly 100 products as part of the line, removing the price premium associated with organic groceries. For example, Wal-Mart said a 6-oz can of Wild Oats Marketplace organic tomato paste will retail for 58c, which compares with 98c for a comparable branded item. And a 32-oz can of Wild Oats Marketplace organic chicken broth will retail for $1.98 at Wal-Mart, compared with $3.47 for a comparable branded item.
Wild Oats Marketing, L.L.C. was formed by The Yucaipa Companies in December 2011 to bring back the Wild Oats brand. The original Wild Oats was founded in 1987 in Boulder, Colo., and grew to become the nation’s second largest natural and organic foods chain. Wild Oats just started selling a line of fresh organic food like eggs and milk at Fresh & Easy stores in the United States. The U.S. stores were purchased by Yucaipa last year.
Several of Wal-Mart’s competitors have ramped up their marketing efforts around organic products in recent months. Cincinnati-based Kroger Co. has noted solid growth in its Simple Truth Organic lines, which display the U.S.D.A organic seal on the front of packaging, and Target Stores on April 9 announced the launch of “Made to Matter — Handpicked by Target,” a collection of products from 17 leading natural, organic and sustainable brands. Target’s products will be featured near “Made to Matter” signage that will span most of Target’s product categories, including the grocery department, where featured brands will include Horizon Organic and Plum Organics.
Even as organic efforts in the retail marketplace increase, there has been a slowdown elsewhere. Mintel, a Chicago-based market research firm, released a report showing “organic” claims have declined on restaurant menus between the fourth quarter of 2010 to 2013.
While “organic” remains the leading ethical claim on menus, its use dropped 28% during the period, due in part to higher costs associated with such items, Mintel said. Additionally, operators are using a wider variety of terms to describe how food is prepared and where it was sourced.
“The reality is that organic foods are quite expensive, and consumers are looking for alternative claims to help them determine what other types of menu items are safe and of good quality to eat,” said Julia Gallo-Torres, category manager, U.S. food service Oxygen reports.