Last week, Walmart announced that it would start selling organic food at “non-organic prices”. The grocery behemoth struck a deal with Wild Oats to sell organic foods at affordable price points. Wild Oats is a mini-Whole Foods, which was actually acquired by its bigger rival, but then divested after a court ruling that the merger would decrease competition in the organic food market.
According to Walmart, 9 out of 10 of its customers would buy organic food if it was cheap enough. The Wild Oats products will be priced 25% lower than other organic brands.
“If we can make that price premium disappear, we think it will grow much, much faster,” Jack Sinclair, executive vice president of grocery at Walmart U.S., said of the retailer’s small but faster-growing organic sales. Read more from Reuters…
Organic is only 4% of the total market. Now that Walmart is moving in, that number is expected to grow. But will there be enough supply to match demand? It takes several years for farmers to convert their land from conventional to organic. Will Walmart and Wild Oats offer some sort of guarantees and support for farmers during the transition period?
Only time will tell, but this is certainly a positive move with a potential to start a snowball rolling.