November 2006
Case
HBS Case Collection

Organics: Coming Center Stage?

Format:Print
| Pages:27

Abstract

The organics movement has certainly come a long way. From hippie farming communes and a scattering of natural food stores in the 1960s, organics outgrew its origins as a counterculture curiosity of the 1970s to become the fastest growing segment of the food industry in the 21st century. But 2006 sent shock waves through the organics industry. In April, the world's largest retailer, Wal-Mart, announced that it would double the number of organic food items sold in its 3,800 stores and in the additional 1,400 it still planned to build in the Untied States. The retailer also pledged to become a center of affordable "organics for everyone" and started by doubling its organic offerings in 2006 at 374 of its stores. Wal-Mart had already introduced its own "Great Value" brand of organic milk in 1,200 of its "supercenter" and was selling it for 10% less than Horizon Organic, the organic milk brand Wal-Mart had carried for three years. Wal-Mart's senior management had already told Wall Street analysts that its organic food would cost just 10% more than traditional groceries. Was Wal-Mart's move a tipping point for the organics industry by kindling broad consumer interest in organics in America's heartland? What would be the impact on the other players in the organics system?