Wal-Mart's Sales of Organic Clothing Having an Impact

[Adam Shand]

Awesome ... this is the way that it has to happen.  Here's hoping  
it's not just snake-oil.

Adam.

From: http://www.organicconsumers.org/2006/article_1343.cfm

Wal-Mart's Sales of Organic Clothing Having an Impact

Organic for everyone, the Wal-Mart way
America's biggest company is also the world's biggest purchaser of  
organic cotton.

By Marc Gunther
Fortune, July 27 2006

NEW YORK (Fortune) -- The $300-billion global cotton industry uses  
more pesticides and synthetic fertilizers than any other crop. Cotton  
Inc., the industry trade group, says that's nothing to worry about,  
but you don't have to be a scientist to know that applying tons and  
tons of pesticides to the soil - more than 50 million pounds in the  
United States alone - probably isn't a good thing.

Just ask H. Lee Scott, the chief executive of Wal-Mart Stores, which  
in the last couple of years has become the world's biggest purchaser  
of organic cotton.

"We will not be measured by our aspirations," says Wal-Mart CEO Lee  
Scott. "We will be measured by our actions."

Wal-Mart saves the planet Well, not quite. But CEO Lee Scott's green  
campaign, which started as PR, is becoming a force of nature. (Read  
the story from Fortune.) Wal-Mart's unsentimental reasons for  
promoting sustainable fishing Talk back

Do you believe that Wal-Mart is serious about its environmental  
initiatives? (Share your thoughts here.) "Those toxins don't stop at  
the field, but can leach into the waterways, and may eventually find  
their way into animals, food and children," Scott said in a speech  
last year.

You probably know by now that Wal-Mart has launched a sweeping drive  
to adopt business practices that are good for the environment. You  
may have heard that Wal-Mart has been selling organic cotton. This is  
the story behind the story - how and why the company got involved,  
and how it's changing an industry.

The story begins, not with Scott, but with a woman named Coral Rose.  
A native of southern California, Rose buys organic food, wears  
organic clothes and uses all-natural cleaning products for her home.

"I've lived an organic lifestyle for about 15 years," says Rose. Both  
her parents died of cancer; that'll get you thinking about chemicals  
in the air, water and food supply. Rose worked for the clothing chain  
Wet Seal before joining Sams Club, a division of Wal-Mart, as a  
ladies apparel buyer.

In the spring of 2004 - before Wal-Mart launched its sustainability  
initiative - she placed an order for organic cotton yoga outfits for  
Sams Club.

Although Sams Club is aimed at owners of small businesses, the stores  
stock a limited selection of women's clothes, as a "pick-me-up" for  
customers who are there to buy other stuff, Rose explains.

The pastel-colored yoga tops sold for less than $10, the loose- 
fitting pants for less than $14. They were a big hit - about 190,000  
units sold out in 10 weeks.

That got Lee Scott's attention. "We gave our customers something they  
wanted, but something they might not have been able to afford at  
specialty stores," he said. It was an early sign that Wal-Mart's  
working-class and middle-income customers would be willing to buy  
"green" products, so long as they were affordable.

Wal-Mart began working with a nonprofit trade group called the  
Organic Exchange, which has been promoting the use of organic cotton  
around the world since 2002.

The company's buyers and suppliers toured organic cotton farms in  
Texas, California and Turkey, which is the world's biggest grower of  
organic cotton. One trip, to a farm near the town of Firebaugh, Ca.,  
was especially memorable. They visited organic fields and then looked  
at a crop-dusting facility, to learn about chemicals and pesticides.

"There were crop dusters in the air the whole day. It was pretty  
intense," said Rebecca Calahan Klein, the founder and director of the  
Organic Exchange.

Today, Wal-Mart and Sams Club stock a range of organic cotton  
products - baby clothes under the Baby George brand, teenage fashion,  
and a line of bedsheets and towels. They've sold 5 million units of  
organic cotton ladies apparel in the last two years, insiders say.

In none of this was Wal-Mart an innovator. Patagonia converted its  
entire sportswear line to organic 10 years ago. Nike promoted organic  
cotton, as did others, like Eileen Fisher and Timberland. Retail  
sales of organic cotton have doubled, from $245 million in 2001 to  
$583 million in 2005.

But the global supply was growing rapidly too, and some farmers who  
converted to organic methods, which can cost more, could not find  
buyers willing to pay a premium. They were forced to sell their crop  
into the conventional cotton market at lower prices.

Wal-Mart's entry has changed the game. Five years ago, global  
production of organic cotton amounted to about 6.4 million metric  
tons. In 2006, Wal-Mart and Sams Club will use between 8 and 10  
million metric tons. "They will be the largest buyer, by far," says  
Klein.

Just as important, Wal-Mart has made a verbal five-year commitment to  
buy organic cotton, giving farmers the assurance they need to produce  
it.

Beyond that, Wal-Mart will bring visibility to organic cotton. "Wal- 
Mart has the biggest megaphone of every company in the world," Klein  
says. "As they have more organic products on their shelves, it will  
affect what consumers expect to see."

The Wal-Mart effect extends to the cotton-growing regions of Turkey.  
Kees Maris, a Dutchman who oversees a private organic cooperative of  
about 2,000 farmers called Mavideniz flew all the way to Wal-Mart's  
home office in Bentonville a couple of weeks ago to talk about  
organic cotton.

While other companies are also driving demand for organics - his  
farmers grow figs and apricots along with cotton - Wal-Mart is one of  
the few to get directly involved with the farmers. "Their approach is  
very positive," he told me.

To be sure, the organic cotton business remains small - less than 1  
percent of the global cotton industry. Cotton Inc., by the way,  
argues that too much fuss is being made about pesticides and  
herbicides used by conventional methods.

"Farmers who live and work on their land have every personal and  
economic incentive to use fewer chemicals in production, not more,"  
the organization says. You can find their point of view at http:// 
www.cottoninc.com/sustainability/

The environmental case is put forth by the Organic Exchange and by an  
activist group called PANNA. http://www.panna.org/

Make up your own mind, but know that the next time you shop, you are  
doing more than buying a T-shirt or a dress. You're voting with your  
dollars for one way of doing business, or another