business news in context, analysis with attitude

MNB noted the other day a story in Forbes that was designed to puncture myths about the advantages of the locavore movement.

Which led MNB user Margaret Mittelstadt to write:

Kevin, I haven't read the entire Forbes article, so take this for what it's worth. A number of things come to my mind reading the excerpts provided:

1. The reporter doesn't take into account how economies of scale may be affecting local rural markets. Factory farmed food has nearly killed rural economies. But, well, local farmers aren't publicly traded on the S & P 500.

2. The reporter doesn't take into account apples picked a few miles away vs. a thousand miles away will most likely be more ripe and more nutrient dense. Perhaps not an issue for the Forbes reader.

3. Small farms continue to disappear at an alarming rate. No farms, no food.

4. Are farmers in sub-Saharan Sudan really growing fruits and vegetables for export, or are they growing commodity crops for processing on the US or world market? I mean when was the last time you ate an apple grown in the Sudan? Start an Eat Local movement in the Sudan! Put more money in farmer's pockets and more fresh food on the plates of Sudanese people. They might be a little bit hungry.

To me it's a very one-sided response aimed at shareholders to a complex issue and it sounds like back door support for agribiz to me. Even a half percent loss in the global market means millions, if not billions of dollars lost to the Big Boys. "Local" and consumer pressure is threatening. Look what happened to rBGH. The organic movement went through the same kind of public scrutiny, and continues to. There are many complex issues regarding where food comes from. People are going to have to come to their own conclusions….

Wait a minute. You’re suggesting that Forbes might have a bias in favor of big agribusiness, as opposed to local farmers.

I’m shocked. Shocked, I say.

We continue to get reaction to the piece we had the other day about an Ad Age story saying how Walmart is pressing its suppliers to allocate a greater percentage of both their consumer ad budgets and trade promotion dollars to the retailer, and is “using a simultaneous push to clear underperforming brands off its shelves as extra leverage.” Walmart is looking for suppliers to fund co-branded advertisements and commercials as well as banner ads on its website and in-store television sponsorships.

One MNB user wrote:

It was always the vendors who stated traditional grocery stores added cost to their bottom line by charging advertising dollars. Now that Wal-Mart is doing it, will it raise their cost of goods? Lets see how this plays out.

The general tenor of the emails that we’ve gotten here at MNB seems to be a feeling that Walmart has crossed the line in this new program and somehow is engaged in behavior that could erode its core band equity in the long run. And, of course, there is some outrage at Walmart’s audacity.

I’m not entirely sure that this is true. It may in fact be just wishful thinking. There’s no question that Walmart is engaged in a broad market share play…and there is likely to be some push-back from manufacturers on this one, simply because it raises so many issues about their relationship with other, competitive retailers.

But Walmart is doing what it always has done. Outrage seems to me to be misplaced, as is any sense that this could be the beginning of the end for the Bentonville Behemoth.
KC's View: