AUSTIN, TX
It’s been an interesting week for organics. Both Wal-Mart and Target took aim at Whole Foods with further expansion into the organic food market by introducing new in-house products designed to help lower prices for the category. Whole Foods Co-CEO, Walter E. Robb, recently discussed the impact such a move might have on the industry and how the company will respond to the growing competition.
“Wal-Mart has been in the organic space for some time. They’re an excellent competitor. I will say historically, of all the competitors in the market, their customers overlapped the least with ours,” said Robb. He added, “In the end,
I think it’s an affirmation that this organic food marketplace continues to grow,” noting that it will be a $225 billion market by 2018.
Just this week, Wal-Mart announced plans to exclusively partner with Wild Oats, a previous Whole Foods competitor, to help create a new in-house line of about 100 products and ultimately drive down organic prices, according to Forbes.
Wal-Mart’s new Wild Oats organic products will cost about 25% less than those sold by competitors, based on price comparisons of 26 national brands, Forbes reports.
“We’re removing the premium associated with organic groceries,” said Jack Sinclair, Wal-Mart EVP of Grocery, noting that customers “have been asking for this.” The company found that 91% of customers would buy affordable organic products if they were offered, according to New York Times.
In response, Walter E. Robb stated, “I think our 365 Organic – if you look at the price – it’s very competitive with any retailer out there right now. I think the last number of years, making organic choices affordable and available to customers, and the growth of that line suggests that
we’re doing it fairly successfully.” He also suggested that he sees tremendous growth and tremendous opportunity available within the organic space and that “unparalleled quality standards, transparency, and great customer experience” will help give the company a leg up on the competition.
Speaking on its recent acquisition of four stores across Arizona and California and the company’s plans for further expansion, Robb said that Whole Foods is “looking aggressively to see what else might be out there to go along with the growth that we have in store.”
Will Wal-Mart be able to compete with Whole Foods with its new organic line? Stay tuned as we keep an eye out on this growing organic war.
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