Many fresh produce suppliers have learned that accommodating the needs of the U.S.’s largest retailer — Wal-Mart — can be profitable, for some even a requirement if they want to compete in the marketplace.
A new Wal-Mart initiative is about to ask suppliers to work a little harder.
Wal-Mart is working with the Sustainability Consortium — a global group of retailers, trade groups and non-government organizations — to draft a sustainability index for products it sells.
Suppliers will be invited to participate in a voluntary sustainability index survey.
As part of that effort to seek supplier buy-in, the process will involve developing sustainability questions for fresh produce, with the consortium then soliciting feedback from grower organizations and other groups on the key performance indicators.
What might that mean for a produce supplier?
The consortium’s website’s “sustainability insights” for apples include guidelines for climate and energy, fertilizer and nutrients, land and soil, pesticides, water, food waste, forced or child labor, small holder farmers (those growing on 5 or fewer acres) and worker protections.
Wal-Mart says it doesn’t plan on making sustainability a competitive issue, but the fact is, consumers who place value on purchasing sustainable products likely will interpret it as such.
The retailer has said it plans to highlight category leaders in sustainability on its consumer website.
Also consider this: Wal-Mart has said it will incentivize its buyers through performance reviews and compensation to work with suppliers that score high on the sustainability index.
Given those twin pressures, companies doing business with Wal-Mart might be wise to start assessing their operations sooner rather than later.
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