With Wal-Mart Stores, Inc (NYSE: WMT) getting into the organic game recently, I mused a while back that there are larger repercussions for the rather small organic industry compared to the head-lock Wal-Mart could unwittingly put on organic farmers and companies. These companies can't just quadruple production due to new Wal-Mart orders without surrendering their integrity, business model or company future -- and that's putting it mildly. So, where in the road does "cheating" come into play? After all just because a product says that it is "organic" does not mean that is 100% true. Heck, nothing in commerce marketing these days is 100% truth -- or customers would be disgusted about the processed used to make all this consumable food and drink. Don't ask, don't tell, eh? But, how many corners can be cut these days so that the line between truth and lies is maintained? Depends on how you define the line, attorneys would say. There's no black and white anymore, just gray.
John Dvorak muses over on his blog that Wal-Mart may be allowing "substandard" organic products -- and organic milk, in particular -- on its shelves under many brands and even under a new store brand that is, of course, the cheapest price. Since "Organic" can be a pretty wide term, are these organic products actually certified by any standards body? Organic goods generally are, and the good news is that is are actual standards for organic goods unlike the chemical stew of processed foods. But, can the definition of "organic" be stretched to the absolute limit so that it translates into increased sales?
Closing Bell: Dubai sends jitters throughout the market (S, BBY)
Heinz looking good after the second quarter?
Why isn't Bank of America updating its shareholders on CEO situation?
Reader Comments (Page 1 of 1)
9-18-2006 @ 3:47PM
Chris said...
Your comments are so completely inaccurate as to make me wonder if you're intentionally trying to start false rumors about this stock. All use of the "organic" label is strictly regulated by the USDA, and the products sold by Wal-Mart meet these standards and ARE organic. Dvorak laments that their organic milk doesn't necessarily come from free range cows... but that doesn't mean it is "substandard" or not "organic."
9-18-2006 @ 3:49PM
Brian said...
Well, we can agree to disagree here -- labeling something "organic" may mean USDA-regulated (which can be "loose" in my opinion), but that does not stop some ingredients from being "substandard" alongside the "organic" ingredients. Being labeled as "organic" still means investigation is needed sometimes, unless 100% of the ingredients are "organic". Milk is one ingredient in one product -- you are right there. Other products have to be scrutinized much, much more.
10-16-2006 @ 9:32AM
kevin said...
With all due respect to this article and John Dvorak's blog, since when does a store control what BETTY CROCKER or KRAFT puts in thier product or how they label it? This is still controlled and regulated by the USDA not the stores that carry them
9-18-2006 @ 9:04PM
Mr. noitall said...
I think I'll just avoid this whole issue and continue buying inorganic milk to put into my ungourmet coffee.
9-18-2006 @ 10:50PM
Chris said...
It's not that organic products *may* be regulated by the USDA, it is that *all* use of the term organic is tightly regulated. Each mislabeling is subject to a $10,000 fine. The terms "100% organic," "organic," and "made with organic ingredients" mean the EXACT same thing at Wal-Mart as they do at Willy's Hippie Farm Fest.
9-19-2006 @ 9:44AM
Organic George said...
It's quite fashionable today to use guilt-by-association. Wal-Mart is big so their organic must be bad. What a crock.
I really love the fact that people who know nothing about organic suddenly know what organic really means. Why don't you spend 30 years developing guidelines and standards and then petition the US government to regulate your industry to protect consumers and then maybe you would have a clue.
10-15-2006 @ 2:13AM
Donald said...
How many of you have actually read over the USDA's NOPRG? Our first clue that something smells about "Certified Organic" products is that the USDA regulates it in the first place.
If one will look through these standards you'll see that there are something like 115 chemicals, many synthetic, that are allowed to be used in "organic" farming. Also, there are exceptions to many of the prohibited chemicals so they can be used.
Anyone who honestly believes that USDA inspectors are out in the fields monitoring and testing produce, meat, feed and processing & packaging facilities, are living in a pipe dream.
As of 2005, roughly 50% of the Organic agribusiness goes to 7 MegaFarms. If you don't think these farms use the loopholes and "fudge" a little, I have an organic farm with an ocean view in Arizona I'll sell you.
If your goal is to obtain real organic produce and meat, visit your local Farmers Market and get to know your local Farmers. Many of them will not have "Certified Organic" farms due to the Gov. red tape and expenses associated with that red tape, but they will have real free range poultry, grass fed beef and organically grown produce.