December 16, 2015 12:45 pm
Updated: December 16, 2015 2:29 pm

Organic groceries go discount as Walmart Canada rolls out new label

Is it worth the extra money to buy organic food? Anne Drewa investigates.

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Call it organic food for all. In a move that could hold big implications for Canada’s multibillion-dollar organic food industry, Walmart Canada has quietly launched a new lineup of organic products under its Great Value store brand.

Experts say the move bolsters Walmart’s fast-growing grocery business as well as capitalizes on shifting consumer tastes. Shoppers also stand to gain through Walmart pricing for products that typically come at a premium cost.

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It’s a shift Walmart has undertaken in the United States, where the world’s largest retailer began selling in 2014 a collection of pantry staples under the Wild Oats organic brand at prices that were 25 per cent lower than comparable products.

“They’ve pushed this in the U.S., where they want to bring the price of organics down and make it accessible to everyone,” Keith Howlett, retail expert at Desjardins Securities, said by phone.

MORE: Walmart Canada evolves to become ‘real grocer’, experts say

About a dozen Great Value “Organic” products can be found on the Walmart.ca website that weren’t there previously. The products, which range from cookies to pastas to popcorn, display the federal logo certifying each item as organic (for more on what that means, see here).

Organic wars

Experts suggest the move will pressure Canada’s conventional grocers – like Loblaw, Sobeys, Metro and Safeway – to not only bolster their organics offering at their discount banners which compete directly with Walmart for supermarket customers, but also address pricing on competing products.

Loblaw sells about 275 private label products under its PC Organics label, while Sobeys sells 160 private label organic products.
According to the Canada Organic Trade Association, the domestic organic industry sells about $4 billion in sales through private label organic foods through major grocers.

Roughly 40 per cent of those sales are fresh fruits and vegetables, the rest being centre of store goods like the new Walmart products.

“This does ratchet things up,” the analyst said.

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[h/t Canadian Grocer]

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