Walmart recently announced it will no longer sell Wild Oats Organic Food brand products. This came as a surprise since it was only two years ago that WalMart partnered with Wild Oats to bring affordable organic foods to its customers.
Walmart's deal with Wild Oats allowed the world's largest retailer to sell various organic products under the brand that included cereals and pasta sauces reports MarketWatch. The deal, which was cemented two years ago, was seen as a counter to Walmart competitors like Costco and Kroger which experienced spectacular sales in the organic food segment.
Walmart's decision to severe its ties with Wild Oats marks a shift in its growth strategy. For now, it seems the retailer prefers to sell more organic food by adding more products to its existing brand, Great Value, as well as fresh produce, reports Fortune.
The grocery business is indeed a challenging segment even for more seasoned players like Walmart. The competition is fierce with each retailer aggressively promoting its brand against its competitors. This result to a very thin profit margin forcing retailers to constantly fine-tune their business models to maximize profits.
The organic segment, while relatively new, is expected to continue its explosive growth. Fueled by a rising consumer demand for a healthier, pesticide-free option, the organic market is expected to grow annually at 14% until 2018 according to FoodNavigator-USA, which makes this an important segment to all retailers.
While the Wild Oats brands were performing well at Walmart stores, the brand's performance just did not meet expectations which prompted Walmart's decision to ditch the brand. However, Wild Oats may not be entirely to be blamed for the below-expectations sales because even Walmart insiders confirm that they might not have given it their best when it comes to the distribution and marketing of Wild Oats' products.
