Download Walmart Building a Healthier Food Choice Architecture

Walmart
Building a Healthier Food Choice Architecture
authored by:
Lisa A. Sutherland
Ray A. Goldberg
Silvia Castellazzi
Peer Ederer
October 2013
www.walmart.com
©2013 Wageningen University --- EFAS
All rights reserved. Cases are developed for discussion only, and are not intended to serve as source of data. No part
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acknowledgement
The authors sincerely thank Andrea Thomas, Jack Sinclair, Joseph Quinn, Rebecca H. Davis,
Dionka Barker and Courtney Stacey for their dedication and collaboration in preparing this
case study.
language advisor
International Meeting Point, Joy Christensen ([email protected])
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Walmart – Building a Healthier Food Choice Architecture
"If we work together, we will lower the cost of living for everyone...we will give the world an
opportunity to see what it is like to save and have a better life."
Sam Walton, founder of Walmart (1918–1992)
Democratizing Healthier Food
Since its inception over 50 years ago Walmart has blazed a trail to democratize the retail
industry. Sam Walton, the company's founder, took a democratic approach to everything he
did, from pricing to management to customer service. He believed in having the lowest prices
at all times, never forcing customers to play high/low pricing games with coupons and bargain
sales, then driving up prices to make up for the difference. He ran his business by treating his
employees and customers like partners, continually asking for and implementing their ideas to
make things better. Walton's democratic approach lies at the core of the company's mission,
"Save money. Live better."
This mission is visible from the early days of the business when Sam Walton coupled bargain
pricing with great customer service, then leveraged the supply chain to create product delivery
efficiencies and increase product affordability even further.
Today, the company's mission is evident through efforts such as Walmart's 2005 sustainability
commitments to produce zero waste, use only renewable energy and produce sustainable
products so customers don't have to choose between products that are sustainable and products
they can afford; and in the United States, Walmart's $4 generic prescription drug program
has benefited all individuals, both the insured and uninsured, since the program's inception
in 2006. In both of these efforts, the company partnered with its suppliers and others to drive
lower prices and democratize items that were frequently out of reach for ordinary Americans,
in this case products that help sustain the environment and affordable prescription drugs.
In its sustainability commitments and $4 generic prescription program, the company
demonstrated that supporting a sustainable environment and improved access to healthcare
products were two critical areas in which it could make a meaningful difference and help
its customers live better. Another area in which Walmart can make a meaningful difference
with the food it sells, providing customers with healthy food at affordable prices.
Our global society faces a modern day food paradox: one billion individuals experience
hunger on any given day and almost one billion are overweight. In the United States these
seemingly juxtaposing issues are manifested by the fact that record levels of adults and
children – two-thirds and one-third respectively – are overweight or obese, yet at the same
time, an unprecedented one in six Americans lives in a household struggling against hunger.
Further, in the United States the health care costs of obesity and poor diet are estimated at
USD 147 to 210 billion per year1. In 2013, 47 million Americans each month relied on
1 Cawley J. and Meyerhoefer C. "The Medical Care Costs of Obesity: An Instrumental Variables Approach." Journal of Health
Economics, 31(1): 219-230, 2012; and Finkelstein, Trogdon, Cohen, et al. "Annual Medical Spending Attributable to Obesity"
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government food assistance (e.g. Supplemental Nutrition Assistance Program "Food Stamps")
to help put food on the table.
At the root of this paradox are poor diet and nutrition, both of which cut indiscriminately
across obesity and hunger. In the U.S. only two percent of the population meets the
recommended national dietary goals (e.g. 2010 Dietary Guidelines for Americans), with the
majority of children and adults consuming too few fruits, vegetables and whole grains and too
much sodium, fat and sugars. Understanding that poor diet and nutrition arise, in part, from
access to and availability of too few of the nutrient rich foods and too many of the nutrient
poor foods opens the door to a possible way to address these pressing issues – through managing
food itself and attributes such as its quality, availability, information and cost. Through size,
scale, myriad of partners, and ability to efficiently and effectively leverage the supply chain,
Walmart was uniquely positioned to democratize healthier food so that customers did not
have to choose between food that is healthier and food that they can afford.
Walmart U.S. Role as a Private Sector Leader
"Save Money. Live Better" is at the core of Walmart's purpose. Extending this mission to the
food it sells means Walmart is driven to make food more affordable for its broad customer
base and to enable its customers to be healthier through changes to food and the food-buying
process. In the consumer-goods space, Walmart has deep experience in making quality
products affordable and bringing them to a mass market. Improving logistics and driving
down costs in the system has been the company's approach to date and has been a cornerstone
of the company's development into a Fortune 1 company with fiscal year 2013 revenues of
USD 466 billion, 151 billion of which was Walmart U.S. grocery net sales, and 2.2 million
employees worldwide, 1.3 million of which are located in the USA. At the beginning of its
journey to democratize healthier food, Walmart U.S. had to ask itself: Would this same
approach work for food? Or would the company need to discover and deploy new tools to
help customers improve their health without sacrificing affordability and the wide array of
choices that consumers want and deserve?
Regardless of the answers to these questions, to understand Walmart's U.S. approach to
helping addressing healthier food, it is important to recognize that underlying Walmart's
mission is the democratic notion that all people deserve the freedom to choose. Individuals
deserve the freedom to choose how they want to live their life, which includes the freedom to
choose how they spend their money and what products they buy. Walmart's approach to
providing this freedom has always been through minimizing financial constraints through
affordability, and maximizing customer opportunity in the form of availability, access, and
information. This notion of choice and Walmart's approach to enabling it, have served as a
strong and steady hand guiding the company through its healthier food journey.
In the spring of 2009, Walmart's senior executives began to discuss what role the company
could play in helping make healthier food the easier choice for its 140 million U.S. customers
that come through its doors each week. The world's largest retailer and grocer was about to
take on the United States, and arguably the world's largest public health food and nutrition
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paradox (Exhibits 1 and 2 for Walmart key financials and sales development, Exhibit 3 for an
international comparison of retailers). As the world's largest grocer, did Walmart have a role
in food, nutrition and health? Was this an issue that it wanted to tackle? That was the question
posed by the team of executives in 2009, setting Walmart on a journey with a long and
winding path.
The company has come a long way since 1962 when Walton first leveraged his relationships
with employees and customers to build a business that helped people save money so they
could live better. Today, the company has a rich network of relationships, including thousands
of suppliers, a host of NGOs, governmental agencies and subject matter experts, and an
unparalleled customer base, as over 67 percent of Americans shop at Walmart each month
and the company has an international presence with operations in 26 other countries as well.
All of this means that Walmart's ability to realize its vision of bringing low prices to everyone
to give them a better life is backed by an incredible arsenal – the company's vast size and
scale, as well as its access to a wealth of expert and customer insights. It was on these expert
and customer insights that Walmart focused as the company launched its food journey.
The Journey
More than two years were spent charting the course towards the healthier food commitments
that Walmart U.S. would publicly announce in 2011. The process was not one that was created
in a vacuum, but one that included input from many stakeholders including its suppliers,
academic nutrition and public health experts, governmental agencies, non-governmental health
organizations, and perhaps most importantly the company's core customers – Walmart moms.
Understanding the issues: Convening the experts
In an attempt to better understand the issues and the public health landscape, Walmart
executives brought together well-known and respected key nutrition and public health opinion
leaders from across academia, government, and non-governmental organizations, the majority
of which were food industry adversaries. Once all of these stakeholders were convened, Walmart
asked the tough question, "What should we be doing to address nutrition and health?"
Many of these same leaders who so openly shared their ideas, concerns and criticisms also
firmly believe that the sole means of helping consumers make wise choices are bans, regulation,
and litigation, such as mandating specific nutrition requirements in the school lunch program,
restricting access to calorie-laden foods and drinks with no nutritional value, taxing "junk"
food and beverages, and making it illegal to market unhealthy foods and beverages to kids.
However, the expert group clearly understood the size and scale that Walmart offers to the
marketplace, and how the company could fundamentally shift the country's diet, nutrition
and health through its food environment.
The experts were aligned and clear on defining the greatest issues facing the U.S. – rising
obesity rates, poor diet/nutrition and escalating health care costs. Many agreed that cheap
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foods with little nutrition and too many calories were easy to access and conversely, lack of
access, availability and affordability of nutrient-dense foods was a critical issue that needed
addressing. An eight-hour day of passionate, smart discussions resulted in many ideas, suggestions
and a wish list that ranged from reducing sodium, sugars and trans fats2, providing more
nutrition education, banning nutrition and health claims from front of packaging, banning
marketing to kids, creating farmers' markets in Walmart parking lots, reducing the cost of
healthier choices, and helping Americans overcome the barriers to eating more fruits and
vegetables. Ultimately, Walmart's executives and their leadership teams would need to prioritize
the areas that they could most impact, work with their supply chain and, most importantly of
all, support the needs of their customers.
The Walmart mom
In the spring of 2009 Walmart held focus groups across the U.S. to talk with moms who
represented its core customer. These women typically worked at least one job and had one or
more children under the age of 18 and family incomes of not more than 50,000 U.S. dollars a
year. At each of the more-than-two-hour discussions these mothers talked about their families,
their lives, the economy, food, nutrition, health, the challenges that they faced every day and
what they needed – and wanted – to help provide better options for their children. In discussing
food specifically, three themes emerged: affordability, information and access. It became clear
that these moms needed the most help with (1) being able to afford the healthier choice (e.g.
lower sodium, fewer calories, more nutritious food and beverages), (2) having information to
help them quickly and simply choose healthier options, and (3) having improved access to
and availability of fresh fruits and vegetables and healthier foods.
Despite having children of all different ages, living in varying geographic areas, having completed
varying levels of education, and being of different races/ethnicities, the moms universally
echoed the same dreams for their children. They all wanted their children to have a better life
than their own and to be healthy and happy. These dreams stir at the core of every parent.
These moms wanted to make the best choices possible for their children and their families,
but without sacrificing what was already so scarce: budget and time. Any solutions Walmart
might offer had to be simple and transparent, provide more choice, not less, and be easily
incorporated into their everyday lives.
Understanding current efforts: the suppliers
Recognizing that the food and beverage suppliers would be critical partners to achieving any
goals put forth, and that many of those largest suppliers were on their own journey to providing
better food choices, Walmart held a series of meetings to understand the opportunities,
challenges, and experiences, and to delineate between what was possible and what was
aspirational.
2 Trans fats are created in an industrial process that adds hydrogen to liquid vegetable oils to make them more solid, and they are labeled
as "partially hydrogenated fat/oil" on ingredient statements.
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Suppliers shared insights such as: U.S. consumers range from "nutrition motivated" to "nutrition
unmotivated"; that diabetes, heart health and weight management were top concerns; that
the growing U.S. population aged 65 and older is a key focus; and that convenience and taste
continue to be the most important drivers for consumer food and beverage choices.
Many of the suppliers shared their own nutrition, health and wellness journeys. The majority
had their own public commitments to increasing the number of "better for you" products
within their portfolios, reducing sodium, trans fats, and sugars, providing front-of-pack
nutrition facts and partnering with experts to provide nutrition education. Many suppliers
publicly report their progress each year in their corporate responsibility (CR) reports. Nutrition,
health and wellness were core CR pillars for almost all suppliers. Sodium reduction was
common to all. While suppliers were committed to improving nutrition, they recognized
that moving too far too fast could evoke a negative reaction from consumers and give their
competitors an opportunity to capitalize on the change if they chose not to improve their
products. Consequently, a recurring theme echoed by the suppliers was the need for a slow
stealth approach so that changes would be small and undetectable to fickle consumers.
It was clear that while Walmart was just beginning to understand its role as a private actor in
addressing health and wellness as a function of nutrition and the sale of food, it could learn
from the largest suppliers who were well on the path to editing nutrition in the marketplace.
Walmart's key takeaways from the supplier meetings were that it was imperative for customers
to drive demand for healthier foods and the company must move stealthily and competitively
to drive market change.
Developing a healthier food choice architecture
While each supplier could gradually improve its respective individual categories and products,
Walmart had the ability to use its size and scale to accelerate progress and move an entire
marketplace forward, addressing experts' and its customers' concerns. Because affordability
and choice are part of Walmart's DNA, these two principles had to be at the core of any
program created.
Amidst all of the experts' discussions around proposed bans, "junk food" taxes, and regulations
at the local, state and federal government levels, Walmart had the unique ability to establish a
choice-based paradigm in lieu of a dictatorial one. Walmart could create an environment and
develop systems to support making the healthier choices the default. Ultimately Walmart's
commitments would create for customers the ultimate healthier food choice architecture.
A healthier food choice architecture supports customers in making healthier food choices
for themselves and their families through defaults, availability and transparency. Walmart
could enable this architecture by leveraging its size, scale and vast supply chain to make
foods healthier by default and to make healthier foods more affordable, available and easily
identifiable via an icon and nutrition education.
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The 2011 Announcement
When Walmart U.S. launched its healthier foods initiative in 2011, it set out to address one
of the greatest issues facing families: how to put healthier, affordable food on the table each
night. The company's commitment is grounded in one powerful idea:
"No family should ever have to choose between food that is healthier for them and food
they can afford."
The president of Walmart U.S., Bill Simon stated exactly this as he stood with Michelle
Obama, First Lady of the United States, on January 20, 2011, and announced Walmart's
commitments to make food healthier, affordable and accessible (Exhibit 4 for press release).
Summarizing the opportunity in front of Walmart, Simon continued:
"With more than 140 million customer visits each week, Walmart is uniquely positioned
to make a difference by making food healthier and more affordable to everyone. We are
committed to working with suppliers, government and non-governmental organizations
to provide solutions that help Americans eat healthier and live a better life."
Walmart's Healthier Food Commitments
The five key elements of Walmart's commitments on healthier food are:
1. Reformulating thousands of everyday food and beverage items by 2015 by reducing
sodium 25 percent and added sugars 10 percent, and by removing all remaining
industrially produced trans fats;
2. Saving customers one billion U.S. dollars per year on fresh produce and reducing
premiums on select healthier food and beverages items;
3. Developing a simple front-of-package icon to make it easier to identify healthier food
options;
4. Providing solutions to address food deserts3 by building stores in underserved
communities in need of fresh and affordable food;
5. Increasing charitable support for nutrition programs that educate consumers to make
healthier choices.
January 20, 2011, was just the beginning of a path that many knew would not be without
challenge, but the reward at the end could change the lives of millions.
The five elements of Walmart's commitments are integral to a healthier food choice architecture,
motivating consumers' affordable choices rather than imposing mandates and restrictions
that limit choice. Consider each element as an essential building block of the architecture,
incorporating defaults, availability and transparency:
3 The USDA defines a food desert as a "low-access community", in which at least 500 people and/or at least 33 percent of the census
tract's population reside more than one mile from a supermarket or large grocery store (for rural census tracts, the distance is more
than 10 miles). Source: American Nutrition Association, Nutrition Digest Volume 36, No. 3, 2011
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s &
OODPRODUCTSCANBEREFORMULATEDTOMAKETHEMHEALTHIER)FTHEAVAILABLEPRODUCTS
are lower in sodium and sugars and void of industrially produced trans fats, consumers
will eat healthier meals by default.
s -AKINGHEALTHIERFOODSMOREAFFORDABLEMEANSTHATCONSUMERSHAVETHEOPTIONTOBUY
the food that is better for them, increasing their choices and their access.
s !FRONTOFPACKAGEICONGIVESCONSUMERSTHEINFORMATIONTHEYNEEDANDLETSTHEM
know which food product is the better choice for them. Giving customers information,
that empowers them with the criteria they need to make effective choices. It also increases
the availability of healthier foods because consumers can see that the healthier choice is
actually an option.
s "YBUILDINGSTORESINFOODDESERTS7ALMARTISIMPROVINGACCESSTOANDAVAILABILITYOF
healthier foods for customers. With access and availability comes the power to choose.
s &INALLYNUTRITIONEDUCATIONPROGRAMSFUNCTIONMUCHLIKEAFRONTOFPACKICON
Consumers learn which foods are healthier and how to prepare them, thus empowering
them with the information and criteria they need to make effective choices.
2013 – Progress To Date
Thus far, in 2013, Walmart has made tremendous progress in all five areas of its commitment
to make food healthier, more affordable, and more accessible.
Making the preferred choice healthier: Reformulating products
In the spring of 2013 the first results of Walmart's progress on its healthier food commitments
were published in Walmart's Annual Global Responsibility Report (Exhibit 11 for cover of
report). Between 2008 and 2011 the amount of sodium sold declined 9 percent, sugar declined
by more than 10 percent, exceeding its goal, and the percentage of food and beverages
containing industrially produced trans fats declined to less than 10 percent. Some examples
of these changes to Walmart's private brand food and beverages included a 15 percent sodium
reduction in Great Value ketchup, an average of 15 percent sodium reduction in Great Value
canned vegetables and more than 70 percent sodium reduction in select meat cuts. Sodium
was reduced for the entire commercial bread category by more than 13 percent, which is
equivalent to more than 1.5 million pounds of salt.
Sugars decreased more than 10 percent across the 17 targeted categories, including declines
in juice drinks and punches (-19.3%), spaghetti sauces (-19.3%), flavored milks (-18.3%),
and ketchup (-16.1%). Changes in sodium and sugars over time are not the result of any one
factor, but rather a combination of reformulated products, new healthier products introduced
to many categories, and a shift in consumer purchasing towards the healthier foods and
beverages.
Building the process and systems to collect, analyze and track over time the data necessary to
monitor progress in lowering its sodium, sugars and trans fat footprint took Walmart more
than one year. A portal and database were built through which data were collected each year,
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for five years, on tens of thousands of national and private brand products across more than
70 grocery categories. Due to the challenges inherent in the data collection process and the
nuances underlying food and nutrition, establishing a baseline and tracking Walmart's progress
on its healthier food commitment required dedicated, all-hands-on-deck supplier collaboration.
In the first year of data collection a number of challenges arose, requiring flexibility and
creative solutions to establish Walmart's 2008 baseline. Many suppliers did not have systems
in place to track nutrition changes to their products, others had newer systems but no historical
archives for 2008, and others were being asked to submit data on hundreds of items that
required so much time that they could not meet required reporting deadlines. For each of
these three situations Walmart collaborated with suppliers to understand their limitations
and needs, and solicited suggestions for resolutions. This collaboration entailed a full year
of conversations and negotiations, but culminated successfully with data being collected
for nearly 90 percent of the tracked products.
Making healthier choices more affordable: Helping customers save money
Since 2011, Walmart has saved its customers 2.3 billion U.S. dollars on fresh produce, exceeding
the goal of a billion dollars per year. Walmart accomplished more competitive and affordable
pricing on fresh produce by leveraging its expertise in logistics, increasing local sourcing, and
improving distribution systems. In addition to making fresh produce more affordable, Walmart
is also working with its suppliers to reduce the price premium between healthier food and
beverages and their traditional varieties. Five hundred product pairs have been identified for
products that, in contrast with their traditional varieties, contain lower sodium, fat, sugar
and calories or greater whole grains, fiber or other key nutrients. For example, Walmart has
eliminated the price premium on private brand white and whole-wheat pasta so they are now
priced equally. The preferred healthier choice (e.g. whole-wheat pasta) is now more affordable,
making it an option for Walmart's customers who previously had no choice but to purchase
the option that they could afford, which was less healthy.
Making the healthier choice easily identifiable: Developing a simple front-of-pack
program
In February 2012 Walmart unveiled the Great For You front-of-pack (FOP) icon (Exhibit 5
for press release and Exhibit 12 for the icon) on select Walmart Great Value and Marketside
private brand products and fresh and packaged fruits and vegetables. Backed by rigorous
nutrition criteria (Exhibit 6 for criteria and process), the icon provides a simple, easy-to-use
shopping tool for customers to quickly identify healthier food choices for themselves and
their families.
More than two years of research and meetings went into establishing the nutrition criteria
upon which the Great For You icon is built. The nutrition experts that Walmart consulted
recommended a food-group approach as the foundation of the icon, which was a different
approach from that used by other front-of-pack programs. During the icon- and criteria-
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development process, Walmart's executives and team met with numerous stakeholders including
nutrition science and policy experts, consumer advocacy groups, non-governmental organizations,
professional health associations, and government agencies with oversight for labeling and
dietary guidance. Walmart engaged in meaningful dialogue, sharing the company's process,
progress and challenges, which led to the creation of a robust and rigorous program for its
customers, and garnered strong stakeholder support.
The final Great For You nutrition criteria dictate that qualifying food and beverages must
contain a food group for which the 2010 Dietary Guidelines for Americans recommended
increased consumption: fruit, vegetable, lean protein, whole grain, low-fat or fat-free dairy
and "good" fats. Qualifying food and beverages must also be limited in the amount of total
fat, saturated fat, trans fats, sodium and added sugars in each serving. When applying the
criteria to Walmart's private brand food and beverages, approximately 20 percent of packaged
goods and 30 percent of all grocery items (including fresh fruits and vegetables) qualified for
the icon on front-of-pack. Examples of Great For You products include all fresh produce,
many frozen vegetables, fruit canned in juice, whole-grain breads, pasta and cereals, 1% low
fat milk, fat-free plain yogurt, and lean cuts of meat.
As the nutrition criteria were being developed, the Walmart Consumer Insights Team conducted
research to assess the impact of varying front-of-pack nutrition symbols on consumer attitudes,
perceptions, and potential purchase behavior. This research included an assessment of thirteen
nutrition symbols including traffic lights, tiered systems (e.g. 1, 2, 3), numerical designations,
nutrition facts only (e.g. Guideline Daily Amount), single symbols and multiple combinations
of systems. The findings were used to provide guidance for further optimization of a front-ofpack (FOP) system. A third and final phase of research was then completed to measure the
performance of the optimized FOP systems. Based on the consumer findings specifically
related to purchase behavior, impact on viewing side/back of pack nutritional information,
and visibility, usefulness, and ease of understanding, the Great For You icon was recommended
for implementation. The net result of all Walmart's collaboration and research was a simple,
easy-to-use FOP system. The Great For You icon guides customers to the healthier choices,
supports U.S. national nutrition guidance, and makes healthier choices easier to spot on store
shelves.
Making healthier choices easier to access: Increasing access to healthier foods
As of January 2013, Walmart has opened 86 stores in areas serving urban and rural U.S.
Department of Agriculture designated food deserts since announcing its healthier food
commitments in 2011. According to Walmart, more than 264,000 people gained access to
more choice and affordable fresh and healthier food choices as a result of these store openings.
Increasing access to healthier foods, including affordable fresh produce is a critical need in
many underserved urban and rural areas in the United States. Opening a store in a food
desert area is not in itself sufficient to address diet and nutrition. Grocers opening in food
deserts must provide a fundamental shift to the community's food environment. The stores
must also provide the communities with a variety of foods, healthier choices, affordable
prices, and cues to help guide more nutritious food and beverage choices.
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Walmart expects to open at least 189 additional locations by 2016, reaching its goal of
275 stores and benefiting a projected 800,000 people by providing them with more
options for healthier food.
Increasing support for nutrition education programs
Since 2011, Walmart and the Walmart Foundation have provided more than USD 26 million
in grants to innovative programs across the United States that support nutrition education,
cooking skills and healthy eating, such as Share Our Strength, the American Heart Association,
the National 4H Council, Common Threads, and Alliance for a Healthier Generation. For
example, a grant was awarded to Alliance for a Healthier Generation to increase nutrition
education for 60,000 school-age children in six communities across the nation. Another
example includes funding of the "Breakfast in the Classroom" initiative. Through grants to
community partners, the Breakfast in the Classroom initiative takes the traditional approach
to school breakfast and improves it with one key ingredient: the classroom. Breakfast becomes
available to everyone, regardless of income level. This makes it possible for all children to
easily participate. Students such as those at Port Towns Elementary School in Prince George's
County, Maryland, where 80 percent of students live at or below the poverty line, are able to
eat breakfast every school day through this initiative.
Healthier Food Journey Expands
Walmart's public commitments to healthier food and developing a choice architecture to
deliver on those commitments could have been the company's starting and stopping point.
Since 2011, however, the company has continued to expand its thinking, programs and
partnerships to extend access to healthier food.
Encouraging healthier food choices
Eighteen months after announcing its healthier food commitments, Walmart announced
an innovative partnership with Humana, one of the largest health insurers in the USA, to
encourage healthier food purchases (Exhibit 7 for press release). Modeled after the successful
Discovery LTD/Vitality Group and Pic N Pay healthy food discount program in South Africa,
anyone who is insured with Humana and enrolled in the HumanaVitality wellness program
can receive a five percent discount on all healthier foods when shopping at Walmart. Healthier
foods are defined in this program as all food and beverages that are part of Walmart's Great
For You program, including all fresh fruits and vegetables. HumanaVitality participants who
complete their health profile receive a HealthyFood™ card and receive the discount on all
Great For You products when they shop at Walmart. The discount is applied back to the
HealthyFood™ card and can be applied to future shopping trips at the participant's discretion.
This program represents the first time in the United States that two parties of the size and
scale of Humana and Walmart have come together to connect a monetary reward with the
choice of healthier food. In addition to cutting costs on fresh produce and reducing the
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pricing premium on healthier foods, with the Humana partnership, Walmart has realized yet
another innovative opportunity to make healthier food more affordable so that customers
don't have to choose between what is good for them and what they can afford.
100% money back guarantee on fresh produce
In June 2013 Walmart, the nation's largest seller of produce, announced that if customers are
not completely satisfied with Walmart's produce, they can bring back their receipt for a full
refund – no questions asked and no requirement to bring back the produce. (Exhibit 8 for
press release)
To support the money-back guarantee on fresh produce, Walmart launched a program to
ensure the quality and freshness of its fruits and vegetables, improving produce sourcing,
training and operations. Walmart is working to deliver produce from farms to stores faster
with increased purchases of fruits and vegetables directly from farmers, increased efficiencies
in the distribution systems and transport systems, weekly in-store checks to assess produce
freshness and quality, and a produce-training program for 70,000 associates. Walmart's
executive vice president of grocery, Jack Sinclair emphasizes:
"We're listening to our customers and delivering on our promise to offer great produce
at the most affordable price. We are so sure our customers will be pleased with the fruits
and vegetables they buy in our stores, they can receive a full refund if they aren't
completely happy."
Not only is this an example of great customer service but it also supports the healthier
food choice architecture that Walmart has so painstakingly developed. A 100% money back
guarantee on fresh produce means customers are never stuck with an inferior product. Walmart
customers are empowered with the choice to consume only produce that is superior, and to
never settle for poor quality.
Beyond the Healthier Food Commitments
This is a case study built on choice architecture and one that demonstrates the efficacy of an
approach that leverages self-regulation and internal mandates as opposed to government or
other 3rd party mandates. This case is about choice – it is about the world's largest retailer
raising its hand and making a very public and transparent commitment to make food healthier,
and to make healthier food more affordable. By approaching the food paradox through a lens
of choice and developing a healthier foods choice architecture, Walmart has democratized
healthier food so its customers do not have to choose between food that is healthier and food
that is affordable. With fidelity to its DNA, Walmart has accomplished this through partnering
with suppliers, experts and its customers; lowering prices; enabling a better life for its customers
through healthier food; providing its customers with opportunity and choice; and making
healthier food available to everyone, not just those who can afford it. This is a case about
collaboration and listening to multiple stakeholders –none more important than Walmart's
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core customers who relayed the barriers and challenges to putting healthier food on tables for
families across America.
Because managing the modern-day food paradox could not be accomplished by one company,
one sector of the food system, or private firms alone, a concerted effort of the private, public,
and not-for-profit groups was instrumental. There are a myriad of participants and the
multitude of interests and agendas at stake – it is an enormous challenge to bring these
players together and get them to successfully collaborate. Given its size and breadth of
operations, Walmart is unique in that it touches, directly or indirectly, multiple stakeholders
including food and beverage manufacturers, ingredient suppliers, trade associations,
government agencies, consumer advocacy groups, academia and of course, customers.
Ultimately, Walmart not by design, but by default, has the ability to be a convener of multiple
stakeholders and the power to create a choice architecture that can provide the infrastructure
to making the healthier choice the easier and more affordable choice for millions of customers
across the United States.
Historically Walmart has worked with suppliers to increase the efficiency of the supply chain,
doing so in a way that improves the lives of the small-scale producers and the workers in that
chain as well. Given the company's strength as a private-sector leader and ability to bring
together a multitude of disparate stakeholders, and the urgency of the modern-day food
paradox, the question that arises is this: Is Walmart obliged to address – and help solve – the
obesity and hunger issues that are costing consumers throughout the world their health and
well-being? Another question arises as well: If Walmart does not take a leadership role, who
will?
Many financial analysts project that Walmart will continue to maintain and improve its
competitive position as its customers maintain faith in the company's combined efforts to
improve the cost structure of the food system and at the same time, in cooperation with its
food chain suppliers and its health suppliers, improve the health of its customers and the
choices available to them. While progress and small wins have been documented, the ending
for healthier food has yet to be written. The potential is limitless, but the road is long and
winding and has really just begun.
The Core Customer Walmart Calls "Mom"
On the hot summer day in 1962 when Sam Walton opened his first Walmart in Rogers,
Arkansas, the store started a more than 50-year-old tradition of numbering Walmart stores in
the exact order in which they were opened. Hence, the modest location came to be known as
"store number one". That first building is now a small plumbing supply store, and "store
number one" has become a full grocery Walmart Supercenter and evolved to a location half a
mile down the street. Today there are more than 4,000 numbered stores across the country –
and over 10,900 stores worldwide.
There is no academic or business leader anywhere who would have guessed that from that
modest beginning, one of the largest businesses in global history would grow in Bentonville,
12
European Food and Agribusiness Seminar
Walmart – Building a Healthier Food Choice Architecture
Arkansas. From that first day Walton, a World War II veteran who had managed and owned
smaller retail stores prior to 1962, always stayed true to his core personal and business beliefs.
He was a business pioneer who believed in his customers, his associates, and his country.
(Exhibit 9 for chronology of Walmart)
Walton knew in 1962 what remains critical to the company today, that the core customer
seeking a better quality life in a civilized society should always be offered the lowest possible
price. Walton knew that Walmart should always aspire to be a place where working families
can turn for Christmas presents, light bulbs, shaving cream, and groceries without an excessive
profit margin on each small item.
More than 51 years later that core customer is fragile and worried about a struggling economy.
But in the face of immensely complex societal challenges, Walmart remains committed each
day to making it easier for all families to buy and eat healthier foods at a fair price.
The core customer Walmart calls "Mom" essentially only wants a better life for her children,
and in numerous ways a better life for any family begins with the availability of affordable and
healthy food. (Exhibit 10 for the June 2013 Walmart economic and customer insights report)
What next steps should Walmart begin to take to make even more progress on these critical
issues? What kinds of partnerships will it need going forward? What is the potential for impact
of these efforts – financially, on relationships, on reputation, and ultimately, and most
importantly – for the customer – for the Walmart mom and her family? Should Walmart's
healthier food commitments be extended across its global markets?
European Food and Agribusiness Seminar
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Walmart – Building a Healthier Food Choice Architecture
Exhibit 1
Key financials for Walmart 2009–2013
As of and for fiscal years ending January 31
Operating results
Total revenues (million USD)
Percentage change in total revenues from previous fiscal year (%)
Net sales (million USD)
Percentage change in net sales from previous fiscal year (%)
Increase (decrease) in calendar comparable sales* (%)
in the United States
Walmart U.S.
Sam's Club
Gross profit margin (%)
Operating, selling, general and administrative
expenses, as a percentage of net sales (%)
Operating income (million USD)
Income from continuing operations attributable
to Walmart (million USD)
Net income per share of common stock (USD)
Diluted net income per common share from
continuing operations attributable to Walmart
Dividends declared per common share
Financial position
Inventories (million USD)
Property, equipment and capital lease assets, net (million USD)
Total assets (million USD)
Long-term debt, including obligations under
capital leases (million USD)
Total Walmart shareholders' equity (million USD)
Unit counts
Walmart U.S. segment
Walmart International segment
Sam's Club segment
Total units
FY 2009
FY 2010
FY 2011
FY 2012
FY 2013
404,254
7.2
401,087
7.3
408,085
0.9
405,132
1.0
421,849
3.4
418,952
3.4
446,950
6.0
443,854
5.9
469,162
5.0
466,114
5.0
3.5
3.2
4.9
24.3
-0.8
-0.7
-1.4
24.9
-0.6
-1.5
3.9
24.8
1.6
0.3
8.4
24.5
2.4
2.0
4.1
24.4
19.4
22,767
19.7
24,002
19.4
25,542
19.2
26,558
19.1
27,801
13,235
14,449
15,355
15,766
16,999
3.35
0.95
3.73
1.09
4.18
1.21
4.54
1.46
5.02
1.59
34,013
95,653
163,096
32,713
102,307
170,407
36,437
107,878
180,782
40,714
112,324
193,406
43,803
116,681
203,105
34,549
64,969
36,401
70,468
43,842
68,542
47,079
71,315
41,417
76,343
FY 2009
3,703
3,595
611
7,909
FY 2010
3,755
4,099
605
8,459
FY 2011
3,804
4,557
609
8,970
FY 2012
3,868
5,651
611
10,130
FY 2013
4,005
6,148
620
10,773
*Comparable store and club sales include fuel. Comparable sales include sales from stores and clubs open for the previous 12 months,
including remodels, relocations and expansions, as well as online sales.
Source: Wal-Mart Stores, Inc. 2013 Annual Report
14
European Food and Agribusiness Seminar
Net sales
Source: Wal-Mart Stores, Inc. 2012 and 2013 Annual Reports
405,132
Walmart U.S.
Walmart International
Sam's Club
418,952
Net sales
(million
USD)
260,261
109,232
49,459
100.0
2011
Percent
of total
(%)
62.1
26.1
11.8
3.4
Percent
change
(%)
0.1
12.1
3.5
443,854
Net sales
(million
USD)
264,186
125,873
53,795
Fiscal years ended January 31,
100.0
2012
Percent
of total
(%)
59.5
28.4
12.1
5.9
Percent
change
(%)
1.5
15.2
8.8
466,114
Net sales
(million
USD)
274,490
135,201
56,423
100.0
2013
Percent
of total
(%)
58.9
29.0
12.1
5.0
Percent
change
(%)
3.9
7.4
4.9
Exhibit 2
100.0
2010
Net sales Percent
(million of total
USD)
(%)
259,919
64.2
97,407
24.0
47,806
11.8
Walmart – Building a Healthier Food Choice Architecture
Walmart sales development 2010–2013
European Food and Agribusiness Seminar
15
Name of
company
Wal-Mart
Carrefour
Tesco
Metro
Kroger
Costco
Schwarz
Aldi
Walgreen
The Home Depot
16
European Food and Agribusiness Seminar
1,237,710
4,271,171
29.0%
Retail revenue
(million USD)
446,950
113,197
101,574
92,905
90,374
88,915
87,841
73,375e
72,184
70,395
4.4
5.1
Retail revenue
growth (%)
6.0
-9.8
5.8
-0.8
10.0
14.1
5.8
3.7
7.1
3.5
Source: Deloitte report, Global Powers of Retailing 2013, based on published company data and Planet Retail
* Sales-weighted, currency-adjusted composites
** Average
n/a = not available
e = estimated
Country of
origin
US
France
UK
Germany
US
US
Germany
Germany
US
US
2.9
3.8
Net profit
margin (%)
3.7
0.5
4.4
1.1
0.7
1.7
n/a
n/a
3.8
5.5
6.2
5.9
Return on
assets (%)
8,5
0,8
5,5
2,2
2,5
5,8
n/a
n/a
9,9
9,6
16.7**
9.0**
Number of
countries of
operations
28
33
13
33
1
9
26
17
2
5
32.9
23.8
Retail revenue
from foreign
operations (%)
28.4
56.7
34.5
61.1
0.0
27.0
55.8
57.1
1.5
11.4
Exhibit 3
Top 10*
Top 250*
Top 10 share of top 250
Top 250
rank
1
2
3
4
5
6
7
8
9
10
Walmart – Building a Healthier Food Choice Architecture
Top 10 retailers worldwide 2011
Walmart – Building a Healthier Food Choice Architecture
Exhibit 4
Press release launching healthier food initiative January 2011
Walmart Launches Major Initiative to Make
Food Healthier and Healthier Food More
Affordable
WASHINGTON, D.C., Jan. 20, 2011 – At an event today
in Washington, D.C., Walmart, the nation's largest grocer,
unveiled a comprehensive effort to provide its customers with
healthier and more affordable food choices. The company
was joined by First Lady Michelle Obama as it outlined the
five key elements of the program including:
1. Reformulating thousands of everyday packaged food
items by 2015 by reducing sodium 25 percent and
added sugars 10 percent, and by removing all remaining
industrially produced trans fats. The company will work
with suppliers to improve the nutritional quality of
national food brands and its Great Value private brand
in key product categories to complete the reformulations;
2. Making healthier choices more affordable, saving
customers approximately $1 billion per year on fresh
fruits and vegetables through a variety of sourcing,
pricing, and transportation and logistics initiatives that
will drive unnecessary costs out of the supply chain.
Walmart will also dramatically reduce or eliminate the
price premium on key "better-for-you" items, such as
reduced sodium, sugar or fat products;
3. Developing strong criteria for a simple front-ofpackage seal that will help consumers instantly identify
truly healthier food options such as whole grain cereal,
whole wheat pasta or unsweetened canned fruit;
4. Providing solutions to address food deserts by
building stores in underserved communities that are
in need of fresh and affordable groceries; and
5. Increasing charitable support for nutrition programs
that help educate consumers about healthier food
solutions and choices.
"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 U.S. "With more than
140 million customer visits each week, Walmart is uniquely
positioned to make a difference by making food healthier
and more affordable to everyone. We are committed to
working with suppliers, government and non-governmental
organizations to provide solutions that help Americans eat
healthier and live a better life."
This program builds on the success of the First Lady's
"Let's Move" campaign to make healthy choices more
convenient and affordable for families and is consistent
with Walmart's commitment to lead on social issues that
matter to its customers.
"We applaud First Lady Michelle Obama's leadership and
commitment to this important cause," said Leslie Dach,
executive vice president of corporate affairs at Walmart.
"Few individuals have done more to raise awareness of the
importance of healthier habits – especially among children
– than she has. She was a catalyst that helped make today's
announcement a reality and her spirit of collaboration made
our commitment to bring better nutrition to kitchen tables
across this country even stronger."
Walmart will reformulate key product categories of its
Great Value private brand and collaborate with suppliers to
reformulate national brands within the same categories by
2015. The effort is designed to help reduce the consumption
of sodium, sugar and trans fats, which are major contributors
to the epidemic of obesity and chronic diseases in America
today, including high blood pressure, diabetes and heart
disease.
The reformulation initiative includes three components:
s
s
s
educe sodium by 25 percent in a broad category
R
of grocery items, including grain products, luncheon
meats, salad dressings and frozen entrees;
Reduce added sugars by 10 percent in dairy items,
sauces and fruit drinks; and
Remove all remaining industrially produced trans
fats (partially hydrogenated fats and oils) in all packaged
food products.
As its suppliers make choices on reformulating their products
beyond the Walmart supply chain, the company expects
millions of Americans to benefit whether they shop at
Walmart or not.
"Our customers tell us they want a variety of food choices
and need help feeding their families healthier foods. At
Walmart, we are committed to doing both," said Andrea
Thomas, senior vice president of sustainability at Walmart.
"We support consumer choice so this is not about telling
people what they should eat. Our customers understand
that products like cookies and ice cream are meant to be an
indulgent treat. This effort is aimed at eliminating sodium,
sugar and trans fat in products where they are not really
needed."
"I applaud Walmart for moving the food industry in a
healthier direction," said Michael F. Jacobson, executive
director of the nonprofit Center for Science in the Public
Interest. "Walmart's action should virtually eliminate
artificial trans fat and significantly reduce salt in packaged
foods and, most importantly, prevent thousands of fatal
heart attacks and strokes each year."
European Food and Agribusiness Seminar
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Walmart – Building a Healthier Food Choice Architecture
Exhibit 4
Press release launching healthier food initiative January 2011,
continued
Walmart's everyday low price business model will help make
healthier food more affordable. The company will take a
number of steps to provide customers even more savings
on fresh produce through a variety of sourcing, pricing,
and transportation and logistics initiatives that will drive
efficiencies throughout the supply chain and further reduce
unnecessary costs. For example, one initiative will establish
more direct relationships with farmers, which typically
result in additional income for farmers and lower and
more consistent prices for customers.
"If we are successful in our efforts to lower prices, we believe
we can save Americans who shop at Walmart approximately
$1 billion per year on fresh fruit and vegetables," Thomas
said.
Walmart will also dramatically reduce or eliminate the price
premium on "better-for-you" options such as reduced sodium,
sugar or fat on products from the same manufacturer.
"Our customers often ask us why whole wheat pasta
sometimes costs more than regular pasta made by the same
manufacturer," added Thomas. "We will use our size and
scale to reduce the price premium on these types of products
whenever possible because customers shouldn't have to pay
more to eat healthier. Customers should be able to choose
knowing the biggest difference in these products is not the
price, but rather that one is better for you."
In addition, Walmart will develop a simple front-of-package
seal in consultation with health organizations to help
customers identify healthier food for their families. The seal
will be supported by a nutritious food standard designed
to increase vitamins, minerals, whole grains, fruits and
vegetables in food products, while limiting saturated fats,
sodium and added sugars.
Later this year, Walmart will add this seal to its private
branded food products that meet the strong criteria and will
also offer the seal to its suppliers for their national brands
that qualify. This effort will complement the front-of
package nutrition labeling system already being discussed
by the food industry.
Source: Walmart website
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European Food and Agribusiness Seminar
"The simple front-of-package seal will apply to a small
number of healthier products and give customers an easy
way to instantly identify food options that are better for
them and save them time when shopping our stores,"
Thomas said.
Simon added: "We are committed to working collaboratively
and in partnership with our suppliers in order to make this
initiative a success. Many of them are already exhibiting
strong leadership in this area and together we can have an
enormous impact on the health and well being of our
customers and their families."
The company has also made it a business priority to find
innovative ways to provide fresh and affordable groceries to
people in urban and rural communities across America who
are living in food deserts.
"As we continue to expand in the U.S., we are focused on
developing new formats and new approaches that will offer
underserved communities fresh and affordable food options
where they are needed most," Simon said.
Last year, Walmart and the Walmart Foundation launched
a $2 billion effort to help fight hunger through 2015 by
donating fresh, nutritious foods to food banks across the
nation. This year the company will increase charitable support
for food and nutrition programs by funding education efforts
that teach consumers about healthier food options. The
Walmart Foundation recently awarded Share Our Strength,
a national organization dedicated to providing children
facing hunger with nutritious food, a $1.5 million grant to
fund the expansion of the "Cooking Matters" and launch
of the "Shopping Matters" nutrition education programs.
Walmart will work with the Partnership for a Healthier
America, a non-partisan convener of private-public sector
efforts, to solve the nation’s obesity challenge, as part of its
commitment to accountability and transparency.
For more information visit: www.walmartstores.com/
healthierfoods.
Walmart – Building a Healthier Food Choice Architecture
Exhibit 5
Press release on unveiling the Great For You icon
Walmart Unveils "Great For You" Icon
Icon to appear on hundreds of food items and provide simple way to make healthier food choices;
Update on progress made over past year
WASHINGTON, D.C., Feb. 7, 2012 – A year after pledging to develop a front-of-pack label that would
give its customers an easier way to identify healthier food, Walmart, the nation's largest food retailer,
unveiled the "Great For You" icon at an event today in Washington, D.C. The icon, part of the company's
healthier food initiative, is an effort to implement a transparent, summary icon for its private label brand
products backed by rigorous nutrition criteria. "Great For You" will initially appear on select Walmart
Great Value and Marketside items, as well as on fresh and packaged fruits and vegetables at Walmart U.S.
stores nationwide this spring. By extending "Great For You" to fruits and vegetables and nutritious food
options the company will make it easier for its customers to build healthier diets.
"Walmart moms are telling us they want to make healthier choices for their families, but need help
deciphering all the claims and information already displayed on products," said Andrea Thomas, senior
vice president of sustainability at Walmart. "Our 'Great For You' icon provides customers with an easy
way to quickly identify healthier food choices. As they continue to balance busy schedules and tight
budgets, this simple tool encourages families to have a healthier diet."
"Today's announcement by Walmart is yet another step toward ensuring that our kids are given the chance
to grow up healthy," said First Lady Michelle Obama. "Just over a year ago, Walmart committed to save
shoppers a billion dollars in their cost of fruits and vegetables and the fact that Walmart exceeded this
number is a real accomplishment and a milestone in our efforts to support families eating better. In addition,
the healthy seal will be another tool for parents to identify the best products for their kids. Giving parents
the information they need to make healthy choices is a key piece of solving childhood obesity."
For more information on "Great For You" and nutrition criteria, visit: www.walmartgreatforyou.com.
Source: Walmart website (excerpt)
European Food and Agribusiness Seminar
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Walmart – Building a Healthier Food Choice Architecture
Exhibit 6
Walmart Great For You nutrition criteria
Source: Company material
20
European Food and Agribusiness Seminar
Walmart – Building a Healthier Food Choice Architecture
Exhibit 7
Announcement on Walmart and Humana partnership for
healthier food
Walmart and HumanaVitality Partner for First-of-its-Kind Healthier Food Program
Designed to Incentivize Wellness in America
BENTONVILLE, Ark., Sept. 19, 2012 – Walmart today launched a first-of-its-kind effort to help
consumers across the U.S. save money on more-nutritious foods and ultimately, live longer, healthier
lives. In partnership with HumanaVitality, a subsidiary of Humana, the effort represents the first national
program where a major retailer and healthcare company have come together to incentivize people to eat
better through savings on healthier foods. Beginning on Oct. 15, more than 1 million HumanaVitality
members who shop at Walmart will be eligible for a new program which offers a 5% savings on products
that qualify for Walmart’s Great For You icon, including fresh fruits, vegetables and low-fat dairy.
Recent research* shows the struggle consumers face with purchasing healthier foods. In fact, one in four
families report skipping healthy purchases often or always due to price. By collaborating with HumanaVitality
to invest in healthier, affordable food, Walmart is directly addressing this issue and working to bring down
the costs of healthcare in the U.S. This program continues an effort Walmart began in 2011 when it
unveiled a commitment to make healthier food affordable and accessible with First Lady Michelle Obama.
It is another example of how Walmart uses its size and scale to lead on big social issues that matter to
Americans.
"Price is an important factor in incentivizing wellness in America. By offering affordable, healthier foods,
we will help make our customers healthier and reduce costs to our healthcare system as a whole. This
represents preventative care in its purest form," said John Agwunobi, M.D., president of health and
wellness, Walmart U.S. "We want to be our customers' wellness destination – the retailer that provides
them with affordable ways to fight for their health."
"We need innovative thinking and new partnerships to successfully address our country's alarming
healthcare issues," said Ginny Ehrlich, chief executive officer of the William J. Clinton Foundation's
Health Matters Initiative. "Walmart and HumanaVitality working together to help people make better
decisions in the grocery aisle is a perfect example of how promoting healthier lifestyles can be a win for
companies willing to explore new paths and, far more importantly, a great benefit for the health status
of Americans."
Joe Woods, CEO of HumanaVitality, is equally committed to inspiring healthier behavior. "The 'Vitality
HealthyFood' program with Walmart represents a new way we can decrease America's healthcare bill.
In a recent survey of our members, 84% said that a savings program would motivate them to purchase
healthier foods. We will be aggressively communicating this program to more than 600,000 hospitals and
physicians, as well as 60,000 insurance brokers to ensure as many members as possible can benefit from it.
Developed in consultation with food and nutrition experts from the public and private sectors, as well as
leading health organizations, Walmart's Great For You icon is a simple, easy-to-use tool designed to help
customers quickly identify healthier food items at Walmart stores. Items with the Great For You icon must
pass a rigorous, two-step nutrition criteria process. The icon is available in the produce section at Walmart
stores and will begin to appear on packaged Great Value and Marketside items beginning this fall.
* "It's Dinnertime: A Report on Low-Income Families' Efforts to Plan, Shop for and Cook Healthy Meals," Share Our Strength's Cooking
Matters: No Kid Hungry, December 2011.
European Food and Agribusiness Seminar
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Walmart – Building a Healthier Food Choice Architecture
Exhibit 7
Announcement on Walmart and Humana partnership for
healthier food, continued
Andrea Thomas, senior vice president of sustainability, Walmart U.S., added: "Americans have told us
they are trying to eat better and need help making healthier food choices. Our Great for You icon helps
customers find those choices and this program represents a new model for how we can make those choices
even more affordable. We will continue to make affordable healthier food a priority so American families
don't have to choose between food that is good for them and food they can afford."
The "Vitality HealthyFood" program is available at all Walmart stores. After accepting Humana Vitality's
terms and conditions at HumanaVitality.com or Humana.com, and taking a brief HumanaVitality Health
Assessment, members will receive their "Vitality HealthyFood" card for 5% savings on items that qualify
for the Great for You icon. When a member goes to Walmart for their grocery shopping, the 5% savings
will be loaded as credits to each member's "Vitality HealthyFood" card within five business days for use
on their next trip. Available initially to more than 1 million HumanaVitality members, the program will
expand to additional members early next year. HumanaVitality members should check with their employer
to verify its enrollment status in the "Vitality HealthyFood" program.
About HumanaVitality
HumanaVitality®, headquartered in Chicago, Ill., is a joint venture between Humana Inc. and Discovery
Holdings, Ltd. Humana partnered with Discovery because of its 14 years of worldwide experience using
behavioral, clinical and actuarial science to motivate individuals to make healthier choices. By integrating
rewards with healthy behaviors, HumanaVitality provides the tools and support necessary to help Humana
members live healthier lives and furthers Humana's Dream to Help People Achieve Lifelong Well-BeingSM.
HumanaVitality has more than 1.5 million members who are enhancing their health and wellness through a
comprehensive integrated approach to lifestyle improvement. For more information about HumanaVitality,
please visit the company's website at www.humanavitality.com. You can also find us on Facebook:
http://www.facebook.com/humanavitality, follow us on Twitter: @HumanaVitality, add us on Google+:
HumanaVitality, and follow us on Instagram: @humanavitality.
About Humana
Humana Inc. (NYSE: HUM), headquartered in Louisville, Ky., is a leading health-care company that
offers a wide range of insurance products and health and wellness services that incorporate an integrated
approach to lifelong well-being. By leveraging the strengths of its core businesses, Humana believes it
can better explore opportunities for existing and emerging adjacencies in healthcare that can further
enhance wellness opportunities for the millions of people across the nation with whom the company
has relationships. More information regarding Humana is available to investors via the Investor
Relations page of the company's web site at www.humana.com.
Source: Walmart website
22
European Food and Agribusiness Seminar
Walmart – Building a Healthier Food Choice Architecture
Exhibit 8
Press release on Walmart fresh produce guarantee
Walmart Launches Fresh Produce
Guarantee in U.S. Stores
Grocer recommits to guaranteeing customers the
freshest fruits and vegetables, announces changes
across sourcing, training and operations
BENTONVILLE, Ark., June 3, 2013 – Walmart, the
nation's largest grocer and seller of produce, announced
today new efforts that will ensure the quality and freshness
of the fruits and vegetables that it offers customers. The
retailer is standing behind this promise by rolling out a
100 percent money-back guarantee* and making changes
across produce sourcing, training and operations.
"We're listening to our customers and delivering on our
promise to offer great produce at the most affordable price,"
said Jack Sinclair, executive vice president of the food business
for Walmart U.S. "We are so sure our customers will be
pleased with the fruits and vegetables they buy in our stores,
they can receive a full refund if they aren't completely happy."
The retailer's initiative includes:
s
s
s
ELIVERINGPRODUCEFROMFARMSTOSTORESHELVES
$
faster by purchasing fruits and vegetables directly
from growers and leveraging Walmart's produce
experts, distribution centers and trucking systems;
%XECUTINGINDEPENDENTWEEKLYCHECKSINITSMORE
than 3,400 Supercenters, Neighborhood Markets
and Express Stores that sell produce; and,
,AUNCHING&RESH0RODUCE3CHOOLSANDOTHER
expanded training programs to 70,000 associates.
"Walmart has always been focused on providing its customers
with top-quality fruits and vegetables, including our Cuties
brand," said Berne H. Evans III, chairman of Sun Pacific, a
Walmart produce supplier. "As a direct result of how Walmart
has stored and handled our product, both Cuties and our Ripe
and Easy Kiwis have been tremendous sales success stories at
Walmart."
Leveraging Produce Experts and Delivering Fruits and
Vegetables to Customers Faster
To improve quality and freshness, Walmart has hired produce
experts to work directly with farmers in the key growing
regions where the company has produce-buying offices.
Building long-term partnerships with farmers while having
Walmart associates in the regions – and in the fields everyday
– where produce is grown has made it possible for Walmart
to select farmers who grow the best fruits and vegetables.
As part of this program, Walmart works closely with local
growers in the U.S. to fulfill its commitment to double the
company's sales of locally grown produce by December 2015.
Walmart's produce offices, combined with Walmart's advanced
supply chain and efficient trucking network, have enabled
the retailer to decrease the days needed to get produce from
growers to individual stores. Reducing the number of days
produce is in transit has made it possible for Walmart to
deliver a fresher product to customers so it lasts longer at
home.
Weekly Produce Checks
Independent teams responsible for checking Walmart produce
departments are going into stores each week to ensure only
the freshest fruits and vegetables are on Walmart store shelves.
Results are reported to every level of store management.
Through this program, Walmart is benchmarking itself and
its competitors week over week.
Fresh Produce Schools
Walmart recently launched a produce training program for
70,000 associates. The program features a new produce
school where associates – including store managers, market
managers and produce department managers from every
Walmart store in the U.S. – learn more about handling fruits
and vegetables. Associates are also equipped with quality
guides that clearly illustrate how to identify top produce.
"Empowering our associates with the tools to guarantee our
produce quality is a critical component to our 100 percent
money-back guarantee," said Sinclair. "These efforts, combined
with the weekly produce checks and operational changes,
will ensure our customers bring home the freshest fruits and
vegetables."
Today's announcement follows a number of recent commitments
by Walmart to make food healthier and healthier food more
affordable. As part of its healthier foods commitment,
Walmart has saved customers more than $2.3 billion over
the last two years on fresh fruits and vegetables in produce
sections across the country.
For more information, including b-roll and images, please
visit news.walmart.com.
*If customers are not completely satisfied with Walmart's produce,
they can bring back their receipt for a full refund. No questions
asked and no need to bring back the produce.
Source: Walmart website
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Walmart – Building a Healthier Food Choice Architecture
Exhibit 9
Walmart chronology
1960s
Retail Revolution
Sam Walton's strategy was built on an unshakeable foundation: The Lowest Prices Anytime, Anywhere.
1962 On July 2, 1962, Sam Walton opened the first Walmart store in Rogers, Arkansas.
1967 The Walton family owned 24 stores, ringing up $12.7 million in sales.
1969 The company officially incorporated as Wal-Mart Stores, Inc.
1970s
Walmart Goes National
In the 1970s, a decade of incredible growth, "Mr. Sam" began to take Walmart national, proving his
vision's widespread appeal.
1970 Walmart became a publicly traded company. The first stock was sold at $16.50 per share.
1971 The first distribution center and Home Office opened in Bentonville, Arkansas.
1972 Walmart was listed on the New York Stock Exchange (WMT).
With 51 stores, Walmart recorded sales of $78 million.
1975 Inspired by a visit to a Korean manufacturing facility, Sam Walton introduced the Walmart cheer.
1979 The Walmart Foundation was established.
1980s
Decade of Firsts
In the 1980s, the first Sam's Club opened, serving small businesses and individuals, and the first Walmart
Supercenter opened, combining a supermarket with general merchandise.
1980 Walmart reached USD one billion in annual sales, faster than any other company at that time.
Walmart had 276 stores and employed 21,000 associates.
1983 The first Sam’s Club opened in Midwest City, Oklahoma.
Walmart replaced cash registers with computerized point-of-sale systems, enabling fast and
accurate checkout.
1984 Sam Walton did the hula on Wall Street, making good on a promise to associates after the
company achieved a pre-tax profit of 8% for the previous fiscal year.
1987 The company installed the largest private satellite communication system in the U.S., linking the
company's operations through voice, data and video communication.
1988 The first Walmart Supercenter opened in Washington, Missouri, combining general merchandise
and a full-scale supermarket to provide one-stop shopping convenience.
David Glass was named CEO.
1990s
America's Top Retailer
By 1990, Walmart was the nation's number-one retailer. As the Walmart Supercenter redefined
convenience and one-stop shopping, Every Day Low Prices went international.
President George H.W. Bush presents Medal of Freedom to Sam Walton.
1991 Through a joint venture with Cifra, a Mexican retail company, Walmart went global, opening a
Sam's Club in Mexico City.
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European Food and Agribusiness Seminar
Walmart – Building a Healthier Food Choice Architecture
Exhibit 9
Walmart chronology, continued
1992 While receiving the Medal of Freedom, Sam Walton articulated the company's mission of saving
people money so they can live better, shortly before passing away at age 74.
Rob Walton became chairman of the board.
Walmart employed 371,000 associates in 1,928 stores and clubs.
1993 Walmart celebrated its first week with sales of one billion U.S. dollars.
1994 Walmart expanded into Canada with the purchase of 122 Woolco stores.
1996 Walmart opened its first stores in China.
1997 The company celebrated its first year with sales of USD 100 billion.
1998 The Neighborhood Market format was introduced with three stores in Arkansas.
1999 Walmart entered the United Kingdom with the acquisition of ASDA.
2000s
New Millennium
Walmart entered the new millennium dedicated to offering customers a seamless shopping experience,
whether they are online, in a store or on a mobile device.
2000 H. Lee Scott, Jr. succeeded David Glass as CEO.
Walmart.com was founded, allowing U.S. customers to shop online.
Walmart employed more than 1.1 million associates in 3,989 stores and clubs worldwide.
2002 For the first time, Walmart topped the Fortune 500 ranking of America's largest companies.
Walmart entered the Japanese market through its investment in Seiyu.
2005 Walmart took a leading role in disaster relief, contributing USD 18 million and 2,450 truckloads
of supplies to victims of hurricanes Katrina and Rita.
Walmart made a major commitment to environmental sustainability, announcing goals to create
zero waste, use only renewable energy and sell products that sustain people and the environment.
2006 Walmart introduced its $4 generic-drug prescription program.
2007 Walmart.com launched Site to Store service, enabling customers to make a purchase online and
pick up merchandise in stores.
2009 Mike Duke became CEO.
Walmart entered Chile with the acquisition of a majority stake in D&S S.A.
For the first time, Walmart exceeded USD 400 billion in annual sales.
2010 Bharti Walmart, a joint venture, opened its first store in India.
Walmart committed USD 2 billion through the end of 2015 to help end hunger in the United States.
Walmart launched a global commitment to sustainable agriculture, aiming to strengthen local
farmers and economies, while providing customers access to affordable, high-quality food.
2011 With the acquisition of MassMart in South Africa, Walmart surpassed 10,000 retail units around
the world.
The first Walmart Express stores were introduced in Arkansas.
Walmart established @walmartlabs, a hub for developing social, mobile and global platforms.
2012 Walmart celebrated 50 years of helping people save money so they can live better.
The company employs 2.2 million associates worldwide and serves 200 million customers each
week at more than 10,000 stores in 27 countries.
Source: Walmart website
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Walmart – Building a Healthier Food Choice Architecture
Exhibit 10
26
Walmart economic and customer insights report June 2013
European Food and Agribusiness Seminar
Walmart – Building a Healthier Food Choice Architecture
Exhibit 10
Walmart economic and customer insights report June 2013,
continued
European Food and Agribusiness Seminar
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Walmart – Building a Healthier Food Choice Architecture
Exhibit 10
Walmart economic and customer insights report June 2013,
continued
Source: Company material
28
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Walmart – Building a Healthier Food Choice Architecture
Exhibit 11
Walmart – 2013 Global Responsibility Report
Source: Walmart 2013 Global Responsibility Report
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Walmart – Building a Healthier Food Choice Architecture
Exhibit 12
Great For You icon
Source: Company material
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European Food and Agribusiness Seminar