Sustainable agriculture

As the world's largest grocer, we have an opportunity to use our global scale and resources to play a significant role in contributing to solutions for one of the most important issues facing our world today. By some estimates, food production must increase roughly 70 percent to feed the estimated 9 billion people who will inhabit the planet by 2050, according to the U.N.

In 2010, we recognized that just a few of our then-39 public sustainability goals addressed our food business. That changed with the announcement of our global sustainable agriculture commitments. We set out to form direct connections between farmers and markets, reduce food waste, motivate farmers to optimize production and sustainably source key agricultural products. By doing so, we are strengthening local farmers and economies, while providing our customers around the world with long-term access to affordable, high-quality, fresh food.

This comprehensive approach is being implemented under the leadership of our Food and Agriculture Sustainable Value Network which oversees project teams led by associates from our global business allowing us to leverage the specialized expertise found across our enterprise. Our Food and Agriculture SVN is partnering with a wide range of experts from nongovernmental organizations (NGO), governmental agencies, and academia to address the food sustainability challenges in our supply chain. We have public goals that are due by the end of 2015 which support three broad areas of focus.

Focus areas for sustainable agriculture

Support farmers and their communities

Commitment: Our vision is to support farmers and their communities by helping small- and medium-sized farmers gain market access, improve the business viability of their farm operations and reduce their environmental impact. In emerging markets, our goals are to:

Sell $1 billion in food sourced from 1 million small- and medium-sized farmers
Provide training to 1 million farmers and farm workers — half of which we expect to be women — in such areas as crop selection and sustainable farming
Increase the income by 10 to 15 percent for the small- and medium-sized farmers from whom we source

In addition, knowing that our customers in the U.S. value locally sourced products, we committed to doubling our U.S. sales of locally sourced produce, accounting for 9 percent of all the produce we sell domestically.

Progress: Walmart Central America, with its best-in-class program for buying directly from small- and medium-sized farmers, leads our global Direct Farm Project Team. A highlight of 2011 was holding our inaugural Global Direct Farm Summit, which brought together our leaders who source and buy produce from around the world to advance our sustainability goals and enhance our direct farm business model. Our Direct Farm Project Team also focused on:

Better defining our direct farm business model, including integrating sustainability and gender attributes through a partnership with INCAE Business School in San Jose, Costa Rica
Benchmarking the direct farm programs in each market so to enhance the business and sustainability design of existing direct farm programs
Working with Massmart in South Africa and NGO Technoserve to create a blueprint for more uniform implementation of smallholder programs in new markets
Developing an income scorecard, in partnership with the University of California-Davis, as part of a broader methodology to measure the income impact of the Walmart Direct Farm programs
Piloting farmer training on vegetable production bases in China, including training of women farmers, with support from Business for Social Responsibility (BSR)

In the U.S., our sales of locally sourced produce far exceeded our expectations. In 2011, we increased the amount of locally sourced produce we sell by 97 percent, which accounted for more than 10 percent of all produce sold.

Produce more food with fewer resources and less waste

Commitment: We have one of the world's largest food supply chains, and we are committed to working from field to table to reduce and optimize the resources required to provide food to our customers around the world. We will bring transparency to our supply chain by:

Accelerating the agricultural focus of the Sustainability Index, beginning with a Sustainable Produce Assessment for top producers in our Global Food Sourcing Network
Investing more than $1 billion in our global fresh supply chain by the end of 2015
Reducing food waste in our emerging market stores and clubs by 15 percent and by 10 percent in our other markets by the end of 2015

Progress:

We successfully piloted a Sustainable Produce Assessment to gauge water, energy, fertilizer and pesticide used by growers supplying our Walmart U.S. and ASDA stores. More than 60 growers on four continents participated in the development of the tool and pilots. Through this, we are identifying opportunities to increase crop yields, lower costs and encourage sustainable farming practices.
Through the end of 2011, we invested $167 million into our global fresh supply chain.
Our waste teams around the world are examining opportunities to reduce food throwaways in our stores. This is a key business metric that increases the efficiency of our fresh food business and decreases food waste.

Sustainably source key agricultural products

Commitment: The third area of focus for our sustainable agriculture commitments is to sustainably source key agricultural products. We are continuing to expand the work on sustainable seafood we have had underway for a number of years. Walmart U.S. is intent on procuring cotton from more socially and environmentally sustainable sources. In addition, we are:

Requiring sustainably sourced palm oil for all Walmart private-brand products globally by the end of 2015
Extending Walmart Brazil's policy of sourcing only beef that does not contribute to deforestation of the Amazon to all of our companies worldwide by the end of 2015
Walmart U.S. and Sam's Club requires all fresh and frozen, farmed and wild seafood suppliers to become third-party certified as sustainable, using Marine Stewardship Council (MSC), Best Aquaculture Practices (BAP) or equivalent standards. We require currently uncertified fisheries and aquaculture suppliers — by June 2012 — to develop work plans to achieve certification

Progress:

Our Palm Oil Project Team, led by ASDA, conducted a series of workshops with our merchants on sustainable palm oil, and we developed a global baseline of palm oil used in our private brands. Sam's Club was the first in North America to introduce products containing sustainable palm oil and carrying a certification from the Roundtable on Sustainable Palm Oil (RSPO). Our ASDA business continues to increase the number of products featuring sustainably sourced palm oil, including its private-brand Christmas pudding.
Walmart Brazil has developed a proprietary monitoring system for beef in our supply chain to identify and mitigate beef from unwanted sources. This system will be piloted in 2012 and used to monitor suppliers of Brazilian beef to prevent sourcing from producers who contribute to deforestation in the Amazon.
As of Jan. 31, 2012, 76 percent of our fresh, frozen, farmed and wild seafood suppliers was third-party certified. An additional 8 percent had developed the required certification plans. One significant highlight over the past year has been the BAP certification of our Atlantic-farmed salmon and tilapia.
We are partnering with the Better Cotton Initiative (BCI), a Swiss nonprofit organization focused on effecting positive change in the way cotton is grown and the lives of people who grow it. Through the Better Cotton Fast Track (BCFT) program, we are in the process of identifying opportunities to implement BCI projects in our supply chain, placing special emphasis on women's development in cotton farming. Women not only make up the bulk of the workforce, but remain highly marginalized in the cotton farming industry.