Corporate Organics

In 2006 Wal-Mart, suffering from negative publicity due to allegations of anti-union and unfair labor practices, huge fines for polluted run-off, and urban blight resulting from store placement, moved towards improving its environmental practices as a way to garner both savings and a more positive public image. (1)  In an effort to revitalize their slumping same-store sales growth and boost stock value by tapping into the then $16 billion annual organic industry, Wal-Mart announced its dedication to increase its offering of organic products.  This announcement included a pledge to provide organic products for only 10% more than conventional items, begging the question of whether the retail giant would apply its economy of scale and logistical might or its traditional, and notoriously ruthless, business model to the organic market.  However, it quickly became apparent that Wal-Mart, in addition to using its logistical strength, strived to attain their low price goal by sourcing products from domestic factory farms, foreign sources and major agribusinesses with little to no history in the organic market. (2)

Wal-Mart is not alone in the quest to profit from the booming demand for organic products. 

Two of the companies used by Wal-Mart to supply their stores with organic milk, Horizon and Aurora Dairy, have faced strong criticism from the organic community.  Horizon, owned by agri-giant Dean Foods, is the largest producer of organic milk in the country and sources at least half of its organic milk from factory style farms.(3)  

In 2005 a trip to a Horizon’s dairy farms in central Idaho by a journalist elicited a description of cows being packed into pens and housed in one of the many giant silver barns that hold 4,000 head. (4)  The article also states that while most organic farms milk their cows twice a day, cattle raised in the industrial feed lot conditions at the Idaho dairy produce enough to be milked three times a day.  Linda Tikofsky, a veterinarian at Cornell University responded to this achievement in production by stating that although Horizon’s milk wouldn’t hurt anyone, for her, an organic label would mean sustainable system where the welfare of the animal and the environment are paramount to manipulating cows to maximize milk production and closed by saying “I feed my kids organic milk but not Horizon”. (5)

Aurora Organic Dairy’s “from cow to carton” approach provides organic dairy products at affordable prices to private label, foodservice and industrial customers, according to the companies corporate website. (6)   Aurora Organic Dairy portrays itself as a steward of the standard of organic procedure and philosophy, implying that the company surpasses organic certification standards through soil enrichment methods such as biodiversity,

 Aurora’s website, a masterful display of marketing and public relations, has several sections pertaining to different aspects of organic dairy production with plenty of politically correct phrases and terminology.  The company also boasts of converting 50,000 acres of land in Colorado and Texas to organic pastures, dedication to local organic commodities and an idealistic closed cycle waste (manure) management program. (7) However, the website is ambiguous regarding the number of cows residing at any of their facilities or even the total number of cattle owned by the corporation. The corporate website covers just about everything a potential customer of Aurora Organic would want to hear while performing due diligence on a possible supplier, however research of Aurora through other sources paints a different picture.

 In 2006, while Aurora was under investigation for allegedly confining cattle to feed lots and for buying replacement cattle and feed from non-organic sources, Cornucopia claimed that Aurora Dairy bought or produced 100% of its organic milk from giant industrial dairies. (8)  Currently, Aurora Organic Dairy operates at least five factory farms with thousands of cows and supplies and packages private-label products for some of the countries largest grocery chains such as Wall-Mart, Target and Costco. (9)  In 2007 Aurora Organic Dairy was sanctioned by the USDA for 14 willful acts of violating federal organic law.  The USDA finding that Aurora Organic had seriously violated the organic regulations prompted calls for the revocation of the Dairy’s organic certification by career civil servants but the Dairy was allowed by the current Administration (Bush 41) to keep their accreditation. (10)  Instead the USDA and Aurora signed a consent agreement in August of 2007, requiring Aurora to stop its violations in order to keep its certifications. (11)  Additionally the agreement required Aurora to file amended organic system plans for two of its facilities, Platteville, Colorado and Dublin, Texas, and removed the certification from the Aurora Woodward facility in Greeley, Colorado. (12)  Finally, the agreement stipulated that the USDA could conduct inspections of the Platteville operation at Aurora’s expense, and if the terms of the agreement were “not being reasonably complied with” during the one year probationary period, the USDA would proceed pursuant to the NOP regulations, which require revocation or suspension of certification and fines up to $10,000 per violation. (13)  Although the USDA could argue that going through the NOP regulations would have taken far longer to rectify the problems at Aurora, this slap on the wrist approach to a corporate giant with considerable political influence leaves consumers vulnerable to substandard organic products and provides little if any deterrent for other corporate titans intent on cashing in on the organic movement.

 Many of the accusations against Horizon and Aurora, as well as concerns over the quality and authenticity of organic foods from China were well documented at the time Wal-Mart was planning their move into the organic market place.  The fact that this information was available to savvy Wal-Mart executives at the time of their decision as to the direction of the retail giant’s organic business model, leaves little doubt that their expansion into the organic market was purely motivated by a desire to profit from the booming and lucrative organic industry.

 The implications of Wal-Mart’s organic business model are potentially drastic for small organic farmers and the organic movement at large.  The damage to competing retailers and the impending destruction of small organic producers through the proliferation of less expensive but substandard organic products could result in consumers losing faith in organic products in general.  This shifting of consumer perception could spell ruin for the organic movement.  Once consumers feel that their organic food dollars no longer support healthier food choices that provide more humane treatment of animals and environmentally safer methods by family farmers they may revert back to less expensive conventional options.

(1) Kastel, Mark A. "Wal-Mart: The Nations Largest Grocer Rolls-out Organic Products." (2006). Cornucopia Institute. Web

(2) Id

(3) Id
(4) Clarren, By Rebecca. "Land of Milk and Money - Salon.com." Salon.com - Salon.com. Web. 22 Dec. 2010. <http://dir.salon.com/story/news/feature/2005/04/13/milk/>.
(5) Id

(6)    Http://www.auroraorganic.com. Web. 20 Dec. 2010.

(7)  Id

(8)  Kastel, Mark A. "Wal: The Nations Largest Grocer Rolls-out Organic Products." (2006). Cornucopia Institute. Web
(9) "Aurora Organic Factory Dairy." Www.cornucopia.org. Cornucopia Institute. Web. 20 Dec. 2010. http://www.cornucopia.org/aurora-organic-factory-dairy/.
10)  Munro, Margaret. "Message to Obama: Please Fix the USDA’s Organic Mess Overhaul of Management and Culture Needed." Www.Cornucopia.org. Cornucopia Institute, Mar. 2010. Web. 20 Dec. 2011. <http://www.cornucopia.org>.
(11) Green, A. Christine, Alabama Law Review; 2008, Vol. 59 Issue 3, p799-830, 32p
(12) Green, A. Christine, Alabama Law Review; 2008, Vol. 59 Issue 3, p799-830, 32p
(13) Green, A. Christine, Alabama Law Review; 2008, Vol. 59 Issue 3, p799-830, 32p