WASHINGTON'S LEADING BUSINESS MAGAZINE

Feeding Walmart

Nation’s largest retailer is one of Washington agriculture’s biggest customers.
Bill Virgin |   February 2013   |  FROM THE PRINT EDITION
Hayley Young
Scott McDougall of McDougall & Sons, center, with Walmart produce technologist Marco Guske, left, and Walmart sourcing manager Doug Kearby.

RICHARD GONZALES HAS ON his shopping list many of the same items as consumers making their weekly trips to the supermarket: apples, cherries, potatoes, onions.

The difference is in the quantities being purchased. Consumers are looking to fill a grocery cart. Gonzales is hoping to fill truck trailers and railroad freight cars.

And while those consumers want to feed hungry mouths around the family dinner table, Gonzales hopes to satisfy the voracious appetite of Walmart, the nation’s biggest retailer.

Gonzales is a senior director of global food sourcing for Walmart and head of its Yakima Valley buying office, which buys Northwest fruits and vegetables directly from growers and packing houses in the region.

Walmart buys a lot of Northwest produce, including 400 million pounds of tree fruit from Washington producers in the past year, the company says, as well as 15 to 20 million pounds of potatoes and 80 million pounds of onions. Between 70 and 75 percent of the apples and cherries Walmart sells across the country comes from Washington.

It wants to buy even more and make more of those purchases directly, rather than through consolidators or brokers. Established in 2009, the buying office has grown from one employee to 10.

In part, the move reflects Walmart’s need to fill the shelves of its growing network of grocery stores, including in Washington where it was a relative latecomer to food retailing. The company opened three stores—in Bellevue, Lynnwood and Spokane Valley—in October 2012 alone, bringing its total to 58. It has plans for more, including a new Tacoma location, possibly opening in 2013.

But Walmart also believes there may be some competitive advantages to running a direct-buying operation. “A lot of our job is making sure we have product on the shelf,” Gonzales says. “Having that communication with the grower allows us the opportunity to make sure we’re giving the customer the best product at the best price and making sure it’s regionally relevant.”

What Walmart gets, he adds, is real-time information about what’s going on with the crops it plans to market to customers. What does production look like this year? What constraints and issues do growers face? What new varieties are growers planting and harvesting that might do well in stores? “That [information] doesn’t come when you meet with salespeople on a quarterly basis,” he says. “It comes when you’re out in the field on a weekly basis, developing these relationships.”

Scott McDougall, co-president of Wenatchee-based