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As consumer preferences have shifted toward healthy, authentic foods, the high cost associated with going organic has kept many would-be converts stuck in the lower-priced, traditional aisles.
For Wal-Mart, that served up a plate of opportunity.
On Thursday, the big-box retailer announced that it will expand its organic grocery category by adding a new brand, Wild Oats.
Selling for at least a 25 percent discount compared to the retailer's other organic offerings, the brand will provide shoppers with organic food options at the same price as its nationally branded non-organic items.
"We know our customers are interested in purchasing organic products and, traditionally, those customers have had to pay more," said Jack Sinclair, executive vice president of grocery at Wal-Mart U.S. "We are changing that."
According to the Organic Trade Association, sales of organic food and beverages in the U.S. reached $31.5 billion in 2012—the latest data available. That includes a 10 percent on-year jump.
Although the category only makes up about 4.2 percent of food sales, a report by industry research firm IBISWorld said it is projected to make up over 5 percent of the domestic food market at the end of 2019. That's despite the fact that organic food prices are typically 10 to 40 percent higher than non-organic food.
"The health food segment accounts for a relatively small share of industry revenue, but it represents one of the only bright spots for the industry in recent years," IBISWorld said.
The Wild Oats launch, which will begin its rollout at 2,000 of Wal-Mart stores this month, will initially include only pantry items such as pasta sauce and chicken broth. It will add about 100 items to the retailer's 1,600-item organic food offering, and will expand into the other 2,000 Wal-Mart stores that sell groceries in the coming year. It will also be offered on Walmart.com this summer.