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The New Horizon for Organics: A Market Outlook of the Effects of Wal-Mart on the International Organic Market. Georgia Clark Parr Rosson Flynn Adcock Dwi Susanto Texas A&M University Texas Cooperative Extension Center for North American Studies. Wal-Mart. Large, global retailer

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The New Horizon for Organics: A Market Outlook of the Effects of Wal-Mart on the International Organic Market

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The new horizon for organics a market outlook of the effects of wal mart on the international organic market

The New Horizon for Organics: A Market Outlook of the Effects of Wal-Mart on the International Organic Market

Georgia Clark

Parr Rosson

Flynn Adcock

Dwi Susanto

Texas A&M University

Texas Cooperative Extension

Center for North American Studies


Wal mart

Wal-Mart

  • Large, global retailer

  • Market access as well as market control

  • 45% of US consumers shop at Wal-Mart

  • Conventional supermarkets account for half of all organic sales

  • Wal-Mart aids companies in determining what will be in demand

  • Aims for 10% mark-up on organics

  • Creates business expansion and encourages mergers

  • ‘Bidding war’ has begun amongst organic suppliers to meet Wal-Mart’s demand


Organic supply and demand

Organic Supply and Demand

  • USDA certification program increased awareness, demand

  • Wal-Mart creates own market niche for organics and brings more awareness

  • US supply can not meet demand – 10% of consumption comes from imports

  • Long wait to gain certification

  • Large farms not yet established to cater to large retailers en masse


The new horizon for organics a market outlook of the effects of wal mart on the international organic market

Average Price Premium for Organic Foods in the United States

  • Short-run: High demand and low supply

  • Long-run: Lower prices due to supply and demand reaching equilibrium

  • Milk, butter, fruit, vegetables, and durable goods are all secure prospects for Wal-Mart

  • Beef and fragile goods are not a viable option

  • Organic canned goods, textiles will certainly be imported


Future of organics

Future of Organics

  • Loosening Regulations

  • Easier market access

  • Large-scale production

  • Incorporation of organic practices into farming, not total immersion

  • New technology, innovations, and products


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