Wal-mart uses its purchasing power to change the supply chain, an idea worth considering

WSJ has an article on Wal-Mart going Local for sourcing more produce.

'Local' Grows on Wal-Mart

By MIGUEL BUSTILLO And DAVID KESMODEL

Wal-Mart Stores Inc., which scours the globe seeking the lowest-cost suppliers, is finding it can save money by buying more fruits and vegetables grown closer to its stores.

Other food retailers, including Supervalu Inc. and Safeway Inc., also are racing to expand the amount of locally grown food they offer, as more Americans flock to farmers markets and gourmet grocers such as Whole Foods Market Inc. in search of fresher produce.

Wal-mart has been able to go greener and save money.

Wal-Mart, the largest grocer in the U.S., with more than $120 billion a year in food sales, encourages its managers to buy produce grown within 450 miles of its distribution centers, even if local peaches, for example, cost more than those produced across the country in California.

That's because the Bentonville, Ark., giant has determined that, in an era of high diesel prices, trimming the number of "food miles" produce travels cuts fuel costs. Buying locally also reduces produce spoilage, Wal-Mart says, though it won't quantify the savings.

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Wal-Mart spokesman says the retailer believes that saving money and improving the freshness of foods are not mutually exclusive ideas, adding that its is committed to doing more than just buying local to save money.

Wal-mart is using its purchasing power to change where produce is grown.

But Wal-Mart's drive to buy local is proving popular with some farmers. "They drive a hard bargain in Bentonville, but I know what I am getting paid before I put something in the ground, and for a farmer that is huge," says Sharon Heer of Fewel Farms, in Yakima, Wash., which is growing jalapeƱos for the chain, and has previously grown pumpkins for it.