Will Wal-Mart Embrace Sustainability to Change its Image?

While I would describe myself as a hardened capitalist that believes "fair trade" implies market-based pricing rather than Kum-ba-ya-motivated global sourcing strategies, I think that it's a good thing that Wal-Mart is trying to change its image from a supply chain bully to a supply chain mensch. The above-linked MSNBC article describes how Wal-Mart is considering supporting "fair-trade" coffee suppliers which sell their beans at above market rates to ensure a better wage for growers. According to the article, "Supporting fair trade presents a paradox for Wal-Mart. It is a tacit admission that there is a point at which no more efficiencies can be squeezed out of the system without harming the people who make it work. Fair-trade beans are sold at a minimum of $1.26 per pound, compared with the world average last month of 90 cents. But Wal-Mart is still determined not to pay more than it must." An interesting case, but one wonders if a "fair-trade" sourcing approach makes sense in the company where the CEO and CFO share a hotel room together to save money and whose typical customer cannot afford to -- or will not -- pay a premium for cornflakes, let alone coffee. Perhaps such an effort might be a better fit with Target's sourcing approach.

Jason Busch

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