Thursday, February 28, 2013

Michelle Obama Talks Business At Walmart: Healthy Food Is Good For The Bottom Line

During Missouri visit, First Lady praises the company's commitment to Let's Move!, and calls for more companies to follow suit...
Springfield, Missouri - "We need more American companies to stand up and do what Walmart has done," First Lady Michelle Obama declared on Thursday afternoon as she made her first official visit to a Walmart store since the company partnered with the Let's Move! campaign in 2011 with an extensive five-year commitment(Above, during her remarks) 

During the last stop on her third anniversary tour for her childhood obesity initiative, Mrs. Obama declared the company's work "groundbreaking," the same adverb she used to describe the pledge when she first joined executives in Washington, DC, to announce the partnership.

Walmart's pledge includes offering shoppers lower prices on premium-priced healthier foods and fresh produce, reformulating private-label food products to reduce sugar, sodium and fat, and building or expanding up to 300 stores by 2016 serving areas designated as "Food Deserts" by the US Department of Agriculture's "Food Desert Locator," a digital mapping tool.

Before raining praise on the company for its success with her campaign, Mrs. Obama had a quick tour through the gleaming aisles of the Walmart Neighborhood Market located at 1320 S. Glenstone Avenue, joined by locals and company executives.  The store is one of 86 the company has built as of January as part of its pledge, and impacts 264,000 consumers, Walmart said.

The store Mrs. Obama visited is not actually located in any of the census tracts in Springfield defined as food deserts by USDA's Food Desert Locator, which was offline for all of Thursday during Mrs. Obama's visit, and went back online late on Friday afternoon.  The store is located a half mile from the southern boundary of one of USDA's "pink block" demarcations for food deserts, at E. Grand Street and S. Glenstone Ave., and it is 1.7 miles from that store to the northern boundary at E. Chestnut Expressway and S. Glenstone Ave. (Above, the graphic from the Food Desert Locator, showing the store, id'd by the dot, outside the demarcated boundary; a larger image is below)

"You have opened 86 new stores--one of the most important calls, most important work to eliminating food deserts, because you’ve opened these stores, including this one, in underserved communities," Mrs. Obama said as she hailed Walmart executives while speaking to about fifty people seated in the produce section, surrounded by glorious, colorful mounds of fruit and vegetables. 

Selling healthy food at affordable prices is not only good for America's health, it can be profitable, Mrs. Obama said, echoing an OpEd she published on Wednesday in The Wall Street Journal that included lauds for Walmart.

"For years, the conventional wisdom said that healthy products simply didn’t sell--that the demand wasn’t there, that higher profits were found elsewhere, so it just wasn’t worth the investment," Mrs. Obama said.  

"Thanks to Walmart and so many other great American businesses, we’re proving that conventional wisdom wrong.  Every day, with their success, these companies are showing us that what’s good for kids and what’s good for families’ budgets can also be good for business," Mrs. Obama said.

Making healthier foods "more affordable and more accessible" is one of the five Let's Move! "pillars," and Mrs. Obama repeated an astonishing statistic that Walmart executives had been touting all day.

"Walmart saved customers $2.3 billion on fresh fruits and vegetables across the nation," since it made its pledge in 2011, Mrs. Obama said--with $1.2 billion in savings in 2012.  She added that "Walmart is still making money."

But if, as Mrs. Obama said when first announcing the partnership, "140 million people a week are shopping at Walmart," then the company "saved" each customer a breathtaking $8.57 in 2012.  Divide that by 52 weeks, and the company "saved" Walmart Moms 16 cents each week in 2012, or 2.3 cents per day.

Neither Walmart nor the White House has provided actual documentation for how the multibillion dollar "savings" was accomplished, nor for how much lower Walmart's prices are now than before they partnered with Let's Move!.*  Walmart has said the "savings" are due to "retooling" its supply chain, and buying more produce from local farmers.

And it's all happened while the company has simultaneously "cut price premiums for healthy items, making the healthier item more affordable or just as affordable as the alternative," Mrs. Obama said, flagging another part of the pledge.

“Walmart is not alone in discovering that healthy products actually sell," Mrs. Obama added, noting a survey that finds that 82% of consumers feel it is important for businesses to offer healthy food.

The company, she said, realizes it has an "obligation that goes far beyond the bottom line." 

"You’re helping kids get the nutrition they need to learn and grow and fulfill their God-given potential.  And those aren’t just business opportunities. They’re moral obligations--truly."

Moral obligations are often part of the discussion for critics of Walmart, who rebuke the company for its labor practices (low wages, poor or no health care insurance) and a feared negative impact on smaller farmers and local businesses.  Mrs. Obama has come under much fire for partnering with the giant, something neither she nor White House officials have ever publicly addressed.  

When first announcing Walmart's commitment to build stores in food deserts, Mrs. Obama and White House officials hailed the pledge as a job-creating enterprise.  But labor leaders blasted it, including Richard Trumka, president, AFL-CIO, and Joseph T. Hansen, president, United Food and Commercial Workers International Union 

"When Walmart opens in a community, it regularly displaces existing jobs with poverty-level jobs," Trumka and Hansen said in a joint statement. "Tens of thousands of Walmart associates qualify for and utilize food stamps, Medicare and Medicaid."

The sweeping and now-massive Let's Move! campaign has been designed to attack childhood obesity from as many angles as possible, partnering with as many stakeholders as possible, from the grassroots to companies on the scale of Walmart.  And the White House is justifiably thrilled that America's largest grocer can bring the First Lady's message to its 140 million weekly customers. 

On display beside Mrs. Obama were placards of Walmart's "Great For You" graphic icon, created as part of the Let's Move! commitment to give "Walmart Moms" an easy way to identify healthier food products.  Leslie Dach, executive vice president of corporate affairs, said the graphic will be appearing on 1,300 private-label Walmart Great Value and Marketside items, on fresh, frozen and canned fruit and veggies, on milk and whole-wheat breads and brown rice, on nuts and seeds, and on lean meats.

Walmart also promised to reduce sodium levels in its private label products by 25% by 2015, and senior vice president for sustainability Andrea Thomas said today that over the last two years, sodium as been reduced 9% across categories like "canned vegetables, luncheon meats and salad dressings."  

Added sugars have been reduced by more than 10% in more than 6,000 foods and beverages, with foods in the yogurt category having a decline of more than 12%, Thomas said.  The number of products containing industrially produced trans fats also fell by 50%, with less than 10% of food and beverages sold at Walmart in 2011 contained industrially produced trans fats.

Government intervention, and the role of consumers....

Mrs. Obama has been repeatedly criticized by conservatives who believe her gargantuan national campaign is too much government meddling in private citizens' lives.  She addressed that on Thursday:  The Walmart partnership--and the partnership with other companies--has nothing to do with government intervention, she said. 

“It’s not about government telling companies what to sell or telling people what to buy," Mrs. Obama said. “It is about businesses like Walmart stepping up" to help make better food choices possible.

Mrs. Obama also called on America's consumers to help make the healthy food sector profitable for businesses.

"As parents and consumers, all of us need to step up as well," she said.  "We need to take advantage of these choices once we have them.  We need to speak with our wallets, because ultimately, we are the ones who create the demand for these products.  With every dollar we spend, we're the ones who ensure that healthy choices are good for business."

The First Lady added that she wanted more innovative companies to partner with Let's Move!.   She's already got Darden Restaurants, Inc, parent to Olive Garden and Red Lobster; The Walt Disney Company; Hyatt Hotels and Resorts; Goya Foods; and as of today, NIKE, Inc., just to name some of the partners that have pledged support.  Not to mention the NBA, NFL, and other sports federations.

As she finished her remarks, Mrs. Obama declared herself hopeful, a theme of her tour.

"I have never been more optimistic that we can solve this problem," Mrs. Obama said.

"In the end we all care about our kids. In the end we all would sacrifice anything for them to give them the very best that we can." 

More on Walmart and Food Deserts...

When Mrs. Obama launched Let's Move! in 2010, she pledged that in order to make healthier food more affordable and accessible and reduce obesity rates, by 2017 she would eradicate the more than 6,500 food deserts that exist in America according to USDA's Food Desert Locator.  But since then, some large scale studies have shown that locating grocery stores in food deserts has no impact on the prevalence of obesity, for a variety of reasons.  Making things more complicated: USDA has two different calculations/definitions for food deserts (an explanation here).

So Mrs. Obama now rarely uses the term food desert during her public remarks, and the same is true for White House officials.  The preferred term is "underserved communities."  Mrs. Obama used both terms on Thursday.

Walmart did not respond to a request for the full list of the 86 stores it has opened as part of the Let's Move! partnership, but on its Let's Move! progress report, notes: "Opened 86 new stores serving food deserts since 2011. These stores serve customers in both urban and rural areas including Atlanta; Durham, N.C.; and Springfield, Mo."

UPDATE: Elly Spinweber, a spokesman for Partnership for a Healthier America, the Let's Move! foundation that oversees the private-sector commitments to the campaign, said her organization does not have a full, updated list for Walmart's food desert builds.  "You'd have to get it from them," Spinweber said in an email. 

In October of 2011, Mrs. Obama traveled to Chicago for the first-ever Let's Move! Food Desert Summit, hosted by Mayor Rahm Emanuel.

As for impacting local farmers: Walmart say it is "doubling the amount of locally grown produce we buy, supporting the farmers in local communities." Signs with the words "locally grown" were scattered around the Springfield produce department.  The company also pledged to support nutrition education as part of the Let's Move! partnership, and said on Thursday that in 2012, the Walmart Foundation "provided more than $13 million in grants to innovative programs across the United States that support nutrition education, cooking skills and healthy eating."

The First Lady was introduced before her remarks by Springfield mother and teacher Stephanie Kennedy, who lost 70 pounds over the last two years, said the White House.  Kennedy lost the weight by eating healthier food and "is now trying to teach her students and grandchildren about the importance of eating healthy," the White House said.

Why Springfield, Missouri?

Neither the First Lady's Office nor Walmart officials answered queries about exactly why a store in Springfield, Missouri, was chosen for Mrs. Obama's visit, since Walmart has stores nationwide.  Mrs. Obama's spokesman, Hannah August, said only that the Springfield store was chosen because "it's one of the stores opened in an underserved community as part of their commitment."  (Above, the large image of the USDA Food Desert Locator graphic for the store Mrs. Obama visited)

Springfield is Missouri's third largest city, and has eight Walmarts, including three Neighborhood Markets built since the 2011 pledge (including the one Mrs. Obama visited); all are outside USDA's food desert demarcation zones.  There are also five "Supercenters" that include grocery markets.  

Walmart has been having an ongoing battle with locals and the city's zoning commission about building a fourth Neighborhood Market in Springfield, according to the Springfield News-Leader, with another in a series of zoning hearings held just last week, following the announcement that Mrs. Obama would visit.  The city council voted 5-4 to approve the new Neighborhood Market.  Read Walmart's latest financial report here.  

Mrs. Obama was accompanied on her tour and in Missouri by Senior Policy Advisor for Healthy Food Initiatives Sam Kass, Chief of Staff Tina Tchen, Domestic Policy Adviser Julie Moreno, and her Communications Director Kristina Schake (Above, Mrs. Obama with Walmart's Thomas, left, and locals during the store tour)

Outside the snow-covered Walmart, Mrs. Obama was greeted by a handful of protesters holding signs as she arrived--as well as by very excited locals. Her large security contingent and motorcade caused a massive traffic snarl.  There were cheers as Mrs. Obama departed after her forty-minute visit, heading back to Washington.

*The transcript of Mrs. Obama's remarks

CLICK HERE FOR LINKS to all posts about the third anniversary of Let's Move!  CLICK HERE for links to all Let's Move! posts. 

More from the anniversary tour...

On Tuesday, Mrs. Obama announced the MyPlate Recipe Partnership during an appearance on Good Morning America, where she was joined by celebrity chef Marcus Samulesson. In a commitment from five media corporations and, 18 popular cooking websites will flag recipes that make it easier to cook at home in accordance with the 2010 Dietary Guidelines for Americans. 

On Wednesday, Mrs. Obama visited Clinton, Mississippi, to praise the state for its anti-obesity efforts, and to host a school-lunch themed culinary battle with celebrity chef Rachael Ray.  The Let's Move! Cafeteria Cook-Off will be broadcast on Rachael Ray Show on March 11.

On Thursday morning, Mrs. Obama traveled to Chicago, Illinois, where she was joined by Olympians and sports heroes at a fitness fest with 6,000 kids and parents to announce a new fitness initiative, Let's Move! Active Schools.  NIKE, Inc. and non-profit foundations are partnering with Let's Move! to promote school-based fitness projects, in a $70 million effort over five years, with the goal of enrolling 50,000 schools. NIKE, Inc. has pledged $50 million.


*Walmart's press operation did not respond to a query about this subject, or others, submitted by email (as the company requires), nor did the company respond with explanatory documents when queried in that hyper-modern way, on Twitter.

UPDATED: This post was updated with new information and re-edited on Sunday, March 3 after a technical glitch on the Blogger platform disabled the post. 

*Photos by Walmart