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Walmart will cut prices, make healthier foods

Michelle Obama, with Walmart CEO Bill Simon, worked on a program with the nation’s largest grocer to make foods more healthy. The company said it would also reduce produce prices.

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Michelle Obama, with Walmart CEO Bill Simon, worked on a program with the nation’s largest grocer to make foods more healthy. The company said it would also reduce produce prices.

WASHINGTON — Walmart, the nation's largest grocer, says it will reformulate thousands of products to make them healthier and push its suppliers to do the same, joining first lady Michelle Obama's effort to combat childhood obesity.

The first lady accompanied Walmart executives Thursday as they announced the effort in Washington. The company plans to reduce sodium and added sugars in some items, build stores in poor areas that don't already have grocery stores, reduce prices on produce and develop a logo for healthier items.

"No family should have to choose between food that is healthier for them and food they can afford," said Bill Simon, president and CEO of Walmart's U.S. division.

As the largest grocer in the United States, Walmart's size gives it unique power to shape what people eat. The grocery business is nearly twice the size of No. 2 competitor Kroger.

Mrs. Obama said the announcement has "the potential to transform the marketplace and help Americans put healthier foods on their tables every single day."

The nation's largest retailer plans to reduce sodium by a quarter and cut added sugars in some of its private label products by 2015. It also plans to remove remaining industrially produced trans fats. The foods Walmart will concentrate on are products like lunch meats, fruit juices and salad dressings, items that contain high levels of sugar or sodium that consumers don't know they're ingesting.

A number of foodmakers have made similar moves, lowering sodium in their products based on shopper demand and increasing scrutiny by health groups. Bumble Bee Foods, General Mills, Campbell Soup Co., PepsiCo and Kraft Foods all announced sodium reductions to their products last year.

And Tampa-based Sweetbay Supermarket used Harvard Medical School nutritional experts years ago to come up with a grading system for its Guiding Stars shelf labels for healthier foods.

But it is the weight Walmart swings with producers that can turn its commitment to a public interest issue into game changer.

For instance, Walmart accounts for 16 percent of all products made by Kraft Foods. Walmart collects about 17 percent of all grocery dollars spent in the Tampa Bay area.

So its initiatives are hard for big food producers to ignore, especially for brands that compete with Walmart's own Great Value label. Once Walmart got religion about recycling and packaging reduction goals a few years ago, Proctor & Gamble and Unilever within a year decided to reformulate all their laundry detergents to concentrated forms that needed half the plastic bottles. In 2006, after a successful test in the Tampa Bay area, Walmart introduced a $4 generic prescription drug program, leading rival retailers to follow suit.

During the news conference Thursday, Andrea Thomas, Walmart's senior vice president of sustainability, acknowledged those industry efforts but said, "Our goal is not to supplant these efforts, but to encourage their widespread adoption. We see our role as a convener and a catalyst."

Walmart said it would reduce prices on fruits and vegetables by $1 billion a year by attempting to cut costs from the supply chain. The company also said it would work to reduce price premiums on healthier items made with more expensive ingredients.

"Our customers often ask us why whole wheat pasta sometimes costs more than regular pasta made by the same manufacturer," Thomas said.

Mrs. Obama has a history of working with Walmart. She once served on the board of Westchester, Ill.-based TreeHouse Foods, a supplier for the store, but resigned in 2007 while her husband was campaigning for the presidency. Barack Obama had criticized the store over wages and benefits it pays employees.

The five-year plan to make thousands of its packaged foods healthier came out of discussions the company has been having with Mrs. Obama, who has made healthy eating and reducing childhood obesity the centerpiece of her agenda. Aides say it is the first time Mrs. Obama has thrown her support behind the work of a single company.

The plan sets specific targets for lowering sodium, trans fats and added sugars in a broad array of foods, including rice, soups, canned beans and snacks like potato chips.

In addition, Walmart will work to eliminate any extra cost to customers for healthy foods made with whole grains, said Leslie Dach, Walmart's executive vice president for corporate affairs. By lowering prices on fresh fruits and vegetables, Walmart says it will cut into its profits but hopes to make up for it in sales volume.

"This is not about asking the farmers to accept less for their crops," he said.

The changes will be introduced slowly, over a period of five years, to give the company time to overcome technical hurdles and to give consumers time to adjust to foods' new taste, Dach said. "It doesn't do you any good to have healthy food if people don't eat it."

The Partnership for a Healthier America, a nonprofit organization that works with the first lady on her Let's Move initiative to reduce childhood obesity, will monitor the company's progress.

The company says it will also address the problem of "food deserts" — a dearth of grocery stores selling fresh produce in rural and underserved urban areas — by building more stores.

That effort could mean little in the bay area. Walmart has been adding stores close to low income neighborhoods here as fast as city governments will allow them for a decade.

A range of studies has shown that low-income people, especially those who receive food stamps, face special dietary challenges because eating healthy costs more and healthier food is harder to get in their neighborhoods.

Times staff writer Mark Albright contributed to this report, which contains information from the Associated Press and New York Times.

Walmart will cut prices, make healthier foods 01/20/11 [Last modified: Monday, November 7, 2011 1:15pm]
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