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Inflation bites: Tough times ahead for Whole Foods

Recently, the Environmental Working Group stated that celery is one of the so-called "Dirty Dozen," the twelve most contaminated fruits and vegetables on the market. As I was chewing on a piece of celery at the time, I began to notice the bitter overtones of what I assumed was a nasty chemical fertilizer. I began to wonder if it might be sarin or perhaps some dioxin derivative. Completely unable to enjoy my snack any longer, I resolved to find some organic celery.

After a long and fruitless (vegetable-less?) search, I finally broke down and decided to go to Whole Foods (NASDAQ: WFMI) . There, tucked into an extensive and impressive collection of colorful veggies, I found what I was looking for: fresh, organic celery. The price? $4.99.

To be honest, if I'm paying $4.99 for a vegetable, I expect it to pick my daughter up from daycare and maybe help out with the rent. I'm used to paying between $1 and $1.25 for a bunch of celery, which made Whole Foods' prices seem like a particularly tasteless joke. However, rather than throw the celery to the ground and loudly denounce Whole Foods as a bunch of money-grubbing ripoff artists, I politely returned the bunch to the counter and left.

There were two reasons for my restrained response: first, I'm saving up my first arrest for something special, like picketing Anne Coulter's funeral, and there's no way I'm getting carted off for yelling at a bunch of celery opportunists. The second reason is that I wasn't really all that surprised. You see, I've gotten used to Whole Foods' massively inflated prices and somewhat snotty attitude.

Continue reading Inflation bites: Tough times ahead for Whole Foods

Being green ... it doesn't have to be expensive!

Though it's not easy for consumers to be green, MSN Money's Abby Schutlz points out that it's possible to be environmentally sensitive and fiscally prudent.

Since buying organic food is expensive -- organic milk is about double the price of the conventional variety and produce can be 200% higher -- Schultz points out that people need to make an organic budget for their environmentally friendly purchases. This can be as simple as buying organic products when they are on sale to the price disparity isn't as great or purchasing produce such as cherries, grapes and peaches that retain less pesticide residue then their conventional counterparts.

I was particularly interested in the piece because I would like to be more environmentally conscious but, like many Americans, I'm not sure about how much I am willing to sacrifice economically to do that.

While hybrid cars are still quite expensive and will likely stay that way for awhile, Schultz advises readers that simply driving less is great for the environment too. And with our country in the midst of an obesity epidemic, walking or biking makes sense for a lot of reasons.

Similarly, simply cutting back on energy use probably does more good for the environment than expensive all-natural products.

So while being green-friendly might seem more expensive, many aspects of conservation will actually save money: Buying products in bulk with less packaging is cheaper, and so is using the library instead of the bookstore.

Does anyone have any tips for being environmentally conscious on a budget? I've talked to some friends, and one of the main reasons people don't make more of an effort to go green is the cost.

The organic market's bet on Wal-Mart and Costco

I've written on the topic of Wal-Mart's entry into the offering of organic foods and produce before. Some people think that Wal-Mart's scale alone will diminish the quality and status of the organic foods marketplace, and others think that the entry of healthy organic foods into Wal-Mart stores will transform obesity in the U.S. to a thing of the past, more or less. Whatever your opinion, make no mistake: organics are coming to Wal-Mart and other bix-box stores like Costco in increasing numbers.

But, with the sheer quantity needed to supply all these Wal-Mart stores, organic produce and food suppliers are going to have to transform the entire industry to take on this new super-challenge. You have more fields, you invest in three to four times as much property -- which in organic produce-producing California is not cheap -- and these organic foods suppliers suddenly are "betting the farm" on the long-term sustainability of Wal-Mart carrying and growing the organic segment for a long time.

What if this does not happen? What if customers choose not to embrace organic, healthy eating in droves like Wal-Mart expects so that it can grow revenue and recruit a new customer base? An entire industry could plummet rather quickly. Generally, any good business plan has a disciplined growth strategy that includes multiple backup scenarios and redundancies to prevent something like this from happening.

It's another example of the power Wal-Mart has -- and yes, it's nearly bankrupted companies like Rubbermaid before who gave too much of their business to the retailer. Will the organic industry befall the same fate? Let's hope not, but as an industry, the plan needs to start, well, yesterday.

The Wal-Martization of organics: will they ever be the same?

organic curly kaleOrganics are in the news. Over the weekend, consumers were paying attention to whether major organic milk producers are really honoring the spirit of organic foods, and last week, media outlets were buzzing about how just about every mainstream grocery store is launching its own organic foods line, from Safeway to SuperValu. Organics are getting cheaper, and the move by huge retailers to expand organic offerings may mean that the demand for pesticide-free goods will change the way farmers in the U.S., and elsewhere, operate.

Nowhere is the presence of organic products more incongruous than on Wal-Mart shelves. Wal-Mart is doubling the amount of organic produce in its grocery shelves for its shoppers "convenience" (and, one would imagine, to allow the retailer the ability to charge more -- and pocket higher margins as a result). The chain is also offering organic cotton clothing and organic baby formula. And while a few customers are surely happy, it seems, the larger response is... oh, no.

I feel your pain, oh ye people who are committed to organics. And I have to ask: is Wal-Mart, by trying to do good, actually doing bad?

Continue reading The Wal-Martization of organics: will they ever be the same?

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Last updated: November 11, 2009: 06:51 AM

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