The Meaning of Walmart's Healthy Foods Announcement


Courtesy of Walmart

This morning Walmart made a big announcement on improving nutrition in its private-label and other foods. Like everything Walmart does, this is big news because of the company's scale. And this was bigger, because Michelle Obama appeared at the announcement ceremony, which was held at The Arc, a community center in Washington that houses nonprofits focused on helping children and families "reach their full potential." (You can see the webcast here.) It's rare for the First Lady to appear at a single corporation's announcement, and a sign of how engaged she and her Let's Move team, including their Partnership For A Healthier America, have been with Walmart on the initiative. Their goal is to reduce obesity, particularly childhood obesity, and no one sells more food than Walmart. Attempts on its part to make healthier products easier to find and easier to afford can arguably make a bigger difference to the national diet than federal regulations--and certainly have a faster impact.

Whether to leave regulation and decisions about what goes into the food people buy to the marketplace or to the government is of course one of the largest debates in the country. Before getting into the particulars of today's announcement, it's worth noting two things. First, no one at the White House can be unaware of ongoing controversy over Walmart's labor practices. And the very public support for Walmart will not mean that the White House nutrition team, led by Sam Kass, will stop the work it is already deep into with other corporations and food manufacturers, and with many federal and state agencies, to improve access to fresher food and opportunities to exercise. But Walmart has a power across the entire supply chain, from farm to transportation to store, that no other marketer or grocer has. If and when it can choose to be a force for good—and if that impulse is largely the result of market demand and market share it doesn't want competitors to claim—the First Lady's team (and anyone else who cares about the country's health) would be foolish not to try to guide the company in the directions it wants to see the whole food industry head.

Leveling the playing field, improving the default environment, reducing things people don't even know are there and can be harming them: that's the public health approach, and one I heartily defend.

Of the "key elements" Walmart announced, several are ones I reported on last March: shorten travel distances between farm and distribution centers, support smaller farmers than it had previously bought from, bring back staple crops to areas where they had vanished because of competition from California and Florida, and bring fresh food into "food deserts" both in cities and, importantly, rural areas without supermarkets.

Today's announcement made larger promises than the company has made in the past. When it made the program I had reported on official, last October, it promised to sell $1 billion globally in food sourced directly from small, medium, and local farmers. Today it said that it would save consumers $1 billion a year on fresh fruit and vegetables. How? The announcement was vague on specifics, but they sound like the ones I reported on: "sourcing, pricing, and transportation and logistics initiatives." Andrea Thomas, Walmart's vice president of sustainability, kept repeating that phrase, without adding more specifics, when she was asked about produce pricing on two conference calls following the announcement ceremony. When I spoke with her late in the afternoon, she did name some. Reductions in packaging, different ways of packing trucks, and investments in the "cold chain" of distributing fresh produce, she said, could lower both waste and prices.

As to whether this meant actually lowering prices on the produce Walmart already sells, it sounds like the answer is no—what I expected, because the "Heritage Agriculture" program I wrote about last year planned to be able to make up in shorter transport costs the higher costs of buying from small producers. Any further price reductions would surely come deeper out of farmers' pockets than selling to Walmart already does. Leslie Dach, vice president of communications, implied that the company would also minimize waste and save money on displays in order to bring produce prices down. But the main savings he mentioned were "market basket" comparisons with produce bought in other stores—where, of course, Walmart has always won on price.

In my piece last year, I defended Walmart as providing fresh food to food deserts, particularly rural ones, but hadn't heard the company use that term. Today it did, saying that it would "address food deserts by building stores in underserved communities that are in need of fresh and affordable groceries." When that means rural communities, objections can be scarce and welcome strong--and Thomas confirmed to me that Walmart's real estate and store-development departments will look at rural as well as urban food deserts. When that means New York City, Vermont, and other cities and states that want to support local businesses, that can mean fierce opposition—as it does now in East Harlem, a controversy a questioner brought up in the brief Q&A after the main announcement. (Dach repeated the company's arguments that stores provide jobs and increase a city's tax revenues.) Walmart didn't name any particular areas with food deserts, or announce numbers, or give a timeline for building, nor did Thomas give me one: "it takes time" to build stores, she said, not to mention community acceptance (which she didn't mention).

But the company did give a timeline for the main news: reformulating its private-label "Great Value" foods over the next five years to reduce sodium by 25 percent, added sugars by 10 percent, and removing "all industrially produced trans fats." This is what the nutrition community will be parsing for months, and where Walmart can preempt, and even help, industry initiatives like ConAgra's announcement that it will reduce sodium in its foods by 20 percent over the same period, or the New York City health department's National Salt Reduction Initiative, which is building public awareness of hidden sodium and trying to coordinate industry to reduce it voluntarily. The long timelines for sodium reduction are a recognition of how hard it can be to make lower-sodium foods taste "good" to people used to high sodium: unlike trans fats and sugars, where there are easy or easyish substitutes, lowering sodium really does change familiar packaged-food flavors.

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Another announcement was a front-of-pack seal of approval indicating a healthier food, one that has reduced sodium or fat or sugar or that contains whole grains. This will arouse the most controversy, and did right away in fact. Marion Nestle and others deride often absurd industry-created labels, and think that self-endorsement will invariably be partial and misleading. Walmart hasn't decided to declare just what information should go on front-of-pack labels, or what makes a product "healthier." That, as wasn't really clear in Walmart's press release or the announcement ceremony, it's leaving to the industry and government groups that are actively fighting, I mean collaborating, over which information will actually help consumer make better choices.

In my conversation with her, Andrea Thomas said that instead of creating its own front-of-pack label, when one of Walmart's private-label products meets its own criteria for healthier product, it will put its new seal on the front of the package, a seal designed to complement rather than compete with the specific factors that will go on industry-designed front-of-pack labels. Who has developed the criteria that will merit the seal? Walmart has met, Thomas told me, with the White House, suppliers, government groups, and "a lot of stakeholders," and now has the criteria under a 60-day review. Whether or not industry is ready with its own front-of-pack labels, Thomas said, Walmart will put its seals on packages by the end of this year, and is aiming for 25 percent of its private-label products.

The announced target for added sugars will disappoint many who would like sodas and soft drinks abolished, and the soft-drink question came up immediately (okay, I was the first question on the first conference call, and I brought it up). Sodas are turning into a third rail, and her reply deftly avoided it. Consumers already know they can buy diet soda, she said. When they buy candy or cake (she didn't mention soda—that came under "choices" they know are already available), they want to have an occasional indulgence. "Our focus," she told me, "is where the customer doesn't expect added sugar: flavored milks and puddings, fruit juice and canned fruit, breakfast items like muffins, granola, and French toast." In a second conference call she ticked off more items, and added that breakfast pastries, breads, crackers, cottage cheese, and yogurts are often sources of hidden sodium and sugars. Dr. John Agwunobi, the company's vice president of health and wellness added that another of the company's promises this morning is to eliminate the price difference in reduced-fat, reduced-sugar, and whole-grain items, so that these will not cost more more than ones with higher fat and sodium, as is often the case now. (This equaling of price does not mean, as some have hopefully thought, that Walmart will make healthier options less expensive than less-healthy ones. Dream on!)

Leveling the playing field, improving the default environment, reducing things people don't even know are there and can be harming them: that's the public health approach, and one I heartily defend. When I interviewed Dr. Thomas Frieden, then New York City's health commissioner and now director of the Centers for Disease Control and Prevention, on his leading a citywide ban on trans fats and setting his sights on sodium, he emphasized that it's what people aren't aware they're eating that industry and regulation can best solve. Want salt? Get out the salt shaker, as Marion repeatedly says. But don't consume unhealthful levels of sodium and trans fats because you have no choice.

I asked Frieden what he thought of Walmart's announcement. Here's how he replied, by email:

This is the type of proactive industry leadership that can save lives. Reducing salt and unhealthy fats and making healthier foods more affordable are exactly the types of changes that will help Americans live longer and healthier lives.

My own view: Whatever you think about Walmart, it looks to be using its clout to help people who don't have the time, money, or opportunity to eat better. Mrs. Obama's team has promised to hold the company accountable for its promises, in regular reports on its progress on the initiatives it announced this morning. We'll all be watching.