Dive Brief:
- Dozens of buyers at Wal-Mart Stores Inc. headquarters hosted an event of half-hour meetings with hundreds of suppliers covering an array of product verticals, including food, earlier this month. It was called "Made in USA 'Open Call.' "
- While these suppliers hoped to launch their products with a major retailer, Wal-Mart is trying to shake the image that it only sells cheap, imported products by working with suppliers who at least in part manufacture products in the U.S.
- With consumers' changing preferences and Wal-Mart’s response to carry more organic goods, this could be a boon for organic food producers. However, these producers may have to contend with Wal-Mart branded products, which can often sell at a much cheaper price point.
Dive Insight:
For Wal-Mart product buyers and consumers, price is still everything, though origin of manufacturing is not far behind. "Anything under $2, you are gold," said Paul Renn, Wal-Mart’s category team director for produce and floral.
For food producers, particularly small and mid-sized companies, who want to break into a large retailer like Wal-Mart, this could cause them to stop and think about their ingredients and operations. If they’re expected to abide by lower price points, they may not be as profitable.
Price points still need to be reasonable for the consumer, but other retailers, while lacking Wal-Mart's far-reaching distribution, could offer a more profitable option.