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Wal-Mart's Sustainability Index

Discussion in 'Sports and News' started by Inky_Wretch, Jul 15, 2009.

  1. The Big Ragu

    The Big Ragu Moderator Staff Member

    Bob, There isn't a ton to pay for on this, which was my point. They are only asking suppliers for info about the supply chain, and then from that, they are going to assign the product some kind of sustainability number based on whatever scale they come up with. What they are suggesting would cost about as much as it costs to label food with nutrition info. My point was that the info is pretty useless to anyone who cares about "sustainability," if it won't be audited. Secondly, Wal-Mart is not going to cannibalize its bottom line by turning away suppliers who won't play along. Wal-Mart will lean on suppliers for ONE thing: Bring us "every day low prices," or we will find someone else who can. It is the one formula Wal-Mart will never mess around with, because it is why people shop there and why Wal-Mart makes money.
     
  2. cranberry

    cranberry Well-Known Member

    Wal-Mart uses its size to squeeze suppliers and definitely uses shelf space as leverage. For example, a company for which I used to work was "asked" to develop a specific, exclusive-to-Wal-Mart packaging -- or it wouldn't get shelf space. Our CEO grumbled about it but he wasn't about to walk away from Wal-Mart over the issue. While I suppose this sort of stuff can come under the heading of pushing for lower price points, (most) companies don't/can't say "no" to Wal-Mart because of its size.
     
  3. The Big Ragu

    The Big Ragu Moderator Staff Member

    Cran, I wasn't arguing that Wal-Mart doesn't have considerable muscle that they use to squeeze suppliers. I was arguing that there is no way they go to battle over this. There are suppliers they can't afford to lose if they want to be the one-stop shopping, low-price place, which is why people shop there; not because Wal-Mart is a "sustainability" leader. There's no evidence Wal-Mart shoppers care about this; but there is plenty of evidence Wal-Mart shoppers care about convenience and price. Wal-Mart will also muscle individual suppliers over specific things, depending on the leverage, or lack of it, that particular supplier has. But there is no way they can get everyone to play along with this sustainability stuff, and Wal-Mart won't cannibalize their business over it.
     
  4. cranberry

    cranberry Well-Known Member

    Off hand, I can't think of a supplier that doesn't need Wal-Mart more than Wal-Mart needs the supplier. Even a company the size of Proctor & Gamble, with all of its brands, needs to play ball on programs like this. Plus, once a sufficient number of companies get on board, it becomes untenable from a PR standpoint for a company to hold out.

    But, as I said before, this program is not necessarily a bad thing and could be a good thing (if the information is verified independently) and consumers aren't being duped. More information in consumers' hands (recent calorie charts in restaurants is a good example) is invariably a positive development.
     
  5. Inky_Wretch

    Inky_Wretch Well-Known Member

    Won't the two universities involved be doing the auditing of the info?
     
  6. Starman

    Starman Well-Known Member

    Wal-Mart forces all their suppliers to outsource production to the coolie sweatshops in China anyway.

    Window dressing.
     
  7. The Big Ragu

    The Big Ragu Moderator Staff Member

    Inky, They can't audit what they are given, unless they physically go into every factory involved in the production of a product and evaluate the supply chain themselves. And there is no way a large producer of something is going to open up their facilities, and try to force every one of the suppliers THEY do business with to open up their chain to Wal-Mart, in order to produce a rating that the supplier has no control over.

    Maybe they do take whatever info they are handed and people don't question the numbers on the labels, because they look official. But it's still a pointless exercise in reality. Even food labels are nonsensical to a degree. The FDA mandates that you put certain nutritional info on a label, but last I had heard they hadn't done any random audits to test nutrition facts since the 1990s. And their guidelines say that only the manufacturers are responsible for the info being accurate.

    Occasionally, you will see a media outlet or some watchdog group that will independently test some foods and expose how you can't trust what you read on nutrition labels. It's an auditing problem. People might blindly follow what they see on the labels of foods and not question them, but the objective reality is that the labels aren't necessarily truthful or they don't always serve people well.

    When it comes to sustainability, whatever criteria they come up with -- even if they publish the criteria for everyone to see -- won't be something you or I could even attempt to independently verify, even if we wanted to try. With food, OK, if you REALLY want to, you can bring something to a lab and test it. Sustainability? How can I know how much greenhouse gas was emitted in the manufacturing of the can holding the pork and beans? How can I know about every one of their factory's water usage? How can you possibly know how much solid waste was produced as a by-product of manufacturing something? And do you think most companies even have that kind of info about every third-party involved in their manufacturing? Let's say your packaging comes from a factory in some Chinese province. They do it cheaply. You can go to them and ask them for the answer to a bunch of questions regarding greenhouse gasses and water use and solid waste produced and where THEIR materials are coming from, etc. etc., but how easy do you think it is going to be to come about that kind of "data"?
     
  8. Pastor

    Pastor Active Member

    Oh, they will certainly come up with “data.” It won’t even be remotely truthful, though. You should see some of the labels of products I’ve picked up. The Nutrition Facts should come with a warning that says, “Not at all factual.”
     
  9. cranberry

    cranberry Well-Known Member

    So, basically, this is really just another bogus p.r. initiative to add some warm-and-fuzzy to a company with a really bad image among the demographic to which such a program might initially sound appealing. I'm shocked.
     
  10. The Big Ragu

    The Big Ragu Moderator Staff Member

    By the way, I think you're wrong. Wal-Mart needs P&G as much as P&G needs Wal-Mart. Wal-Mart gets people in their stores by offering a wide range of products (convenience) and offering them cheaply (price). Strip Wal-Mart's shelves of all P&G products and suddenly the Target down the street looks more attractive, because at least they have your favorite deodorant and laundry detergent and paper towels and shampoo and batteries (and dozens of other products) and their prices are competitive. I don't think either company (P&G or Wal-Mart) would ever do anything extreme (strong-arm tactics) to jeopardize their relationship, because they are so interdependent.

    Also, let's say you make the decision to not play along. It is only untenable from a PR standpoint if consumers actually give a hoot about a sustainability index number. I'll take an educated guess and say that this is one of those things (sustainability) that has very little effect on consumer behavior--particularly Wal-Mart shoppers--if it means paying more for non-discretionary items.
     
  11. cranberry

    cranberry Well-Known Member

    I picked P&G as an example because a) it's the only consumer product company I could think of off-hand that would come close to having sufficient leverage to say "no," and b) because I know it routinely complies with Wal-Mart "requests," including, I believe, this one. Obviously, however, there's a lot more give and take in the relationship with P&G than a little one-product outfit but Wal-mart typically gets its way on this sort of thing.

    On your second point, I don't think this type of initiative, just because it was begun by Wal-Mart, would be limited to Wal-Mart. If your company is going to the trouble of complying with this program, why wouldn't you carry that program over to all of your retail packaging in all lines of distribution?

    And if/when the time comes that consumers expect this type of information, you need to comply. Even if it is unverified window-dressing for p.r. purposes, there's a growing number of environmentally motivated consumers. You need to look no further than the auto industry to make that determination.
     
  12. exmediahack

    exmediahack Well-Known Member

    I can see Wal-Mart trying really, really hard to get away from the 350-pounds Bertha walking at 1.5 MPH up and down the aisles, leaning on the cart as she looks at the price of another 33-ounce canister of Crisco.

    Yet this concern for the environment? It's hypocritical to me.

    Environmental impact? How about if Wal-Mart first cleans up their damn parking lots and gets the stinking and blowing trash out of them before they worry about saving the global environment? (Yes, I do still shop there but I find myself probably shopping at Target more often than Wal-Mart now)

    In every city I've lived in or every place I've visited, when I go into a Wal-Mart, I leave usually feeling worse than when I got there -- it was rarely that way when I was a teenager or in my 20s. Yet, maybe now as a parent trying to raise strong children, I just see people struggling but, worse, people who are struggling but probably won't have the ability to do anything about it.

    (In other words, don't go to Wal-Mart when the Heat Index is 105 or above. You'll see folds of skin you never thought you would see and tattoos in places you didn't know existed).

    And once I've loaded up my cart with what I need, then I have to go play the Wal-Mart Checkout Game. Balance the length of the line with doing a quick study of the people ahead of me. Are they likely to have their check denied or debit card denied -- which will lead to the flashing "you're screwed" light above the cashier as the line comes to a screeching halt. They always have greeters at every door but rarely have enough cashiers -- heck, even the Self Checkouts have lines because the WM I usually frequent only has 2 of 6 of them open at once. What *&^%ing sense is that?!?

    Totally different feeling from when I walk into a Target. I see workers in red shirts who know (and even care) where a product is located if I can't find it. Lines at checkout are rarely a problem.

    Also, MILFs shop at Target. I guess I'd rather pay 10% more and have better 'scenery' -- when I leave, I feel energized. When I leave a Wal-Mart, I just want to go home and take a nap...

    (Okay, thread hijack over... won't happen again)...
     
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