Wal-Mart finds that "low prices" and organic don't mix

On April Fools Day, environmental blog Gristmill had satirically reported that Wal-Mart was abandoning all of its green initiatives, fake quoting the CEO Lee Scott:

In the end, our customers value low prices more than sustainability, and at Wal-Mart, we listen to our customers.

This satirical story evidently had a kernel of truth. From the Energy Roundup today comes a report that Wal-Mart is backing off its earlier commitment to organic foods. In an interview with organic food suppliers, Business Week found that the Gristmill folks had inadvertently hit the nail on the head:

Chief Executive Lee Scott concedes that the company has struggled to persuade customers that Wal-Mart can mean high-quality, rather than simply low price...

..."The Whole Foods customer is walking in there to buy organic and is more concerned about how the fruit was farmed," says apple farmer Ricker, "but the Wal-Mart customer is used to shopping with a calculator..."

..."Is organic really compatible with the Wal-Mart approach? We're finding out that it's not," says Jim Riddle, organic outreach coordinator and guest lecturer at the University of Minnesota.

Consider the case of Organic Valley Family of Farms in La Farge, Wis., one of the country's largest cooperatives of organic farmers. When demand for organic milk soared two years ago, rival Horizon Organic Dairy offered to sell to Wal-Mart for 15% below Organic Valley's price. Wal-Mart expected a similar reduction from Organic Valley, but instead the cooperative pulled out. "Looking for ever-lower costs comes at a real cost to sustainability," says George Siemon, Organic Valley's chief executive.

In other words, there's a limit to "low prices, always." You can't live sustainably at any price.