Amid a torrent of depressing headlines about the rising cost of groceries, gas, and just about everything else you need to subsist in a free society, a tiny kernel of good news revealed itself this week, with a story about how Wal-Mart has pushed back against big food producers to keep prices low. But the solutions Wal-Mart reached are so shockingly common sense it’s almost more depressing than hopeful.
The story, in the online edition of Fortune magazine, describes how the market has forced Wal-Mart to make some of the changes environmentalists have been urging for years. It also demonstrates the useless, expensive and harmful ways in which the retail business has evolved, and how we have to change the way we live to begin to approach some semblance of sustainability. Would that all the changes necessary were this easy.
In the story, Wal-Mart made its suppliers do three basic things. It forced the makers of boxed foods, everything from cereal to hamburger helper, to package their products in smaller boxes, taking up less space. It never occurred to me that food producers put their products in larger boxes simply to have larger presence on store shelves, but they do. What a waste! The 20 percent reduction in packaging saved General Mills 890,000 pounds of paper fiber and eliminated 500 trucks. Brilliant.
Secondly, Wal-Mart eliminated the middleman from its acquisition of certain products like coffee beans. Now, Wal-Mart buys directly from a cooperative of Brazilian farmers, cutting three or four steps out of the supply chain. Third, Wal-Mart now buys many of its produce from regional, if not local producers, buying potatoes for its Northeast stores from a Maine farmer, instead of shipping Idaho potatoes all over the county. It now saves thousands in shipping costs, passing the savings onto the consumer. Genius.
This story has opened my eyes. While grocery shopping yesterday, I couldn’t help but notice the foods that were packed efficiently, and the foods that used excess packaging. Luckily, I am a fan of Grape Nuts, perhaps the most densely packed cereal on the shelf; but I digress.
I guess what I find so depressing about the story is that I’m now aware of another whole realm where retail items like food are packaged in unnecessary and wasteful ways that only serve to drive up their costs. How odd is it that a massive corporation like General Mills needed a kick in the rear from Wal-Mart to take a few simple steps that save tons of paper and millions in shipping costs?
I thought efficiency was the area where the free market was supposed to lead.