Article — From the July 2012 issue
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Article — From the July 2012 issue
One of the things I like about Walmart is that pretty much the nearest neighbor to its Home Office, which is to say the nearest neighbor to the world headquarters of a company that sold more than $400 billion worth of stuff last year, is the world headquarters of Keith’s Body Shop. Over here, you’ve got your basic Fortune 1 company, the Heavyweight Champion of World Capitalism, an outfit with more than 2 million employees — the kind of company that (allegedly) pays more in foreign bribes each year than most make in profits — and over there, you’ve got Keith. He’s just down the way, running his own command center from a one-story corrugated-metal building, the second-biggest business on the block. You fly in from New York or Chicago or Beijing or Berlin and want to negotiate the price you’re going to get for millions and millions of disposable razors, digital cameras, frilly pink baby clothes, cheap flip-flops — that’s here. You want to get that dent in your Camry taken care of — go see Keith.
So last July I went to Bentonville, Arkansas, which is where the Home Office, and Keith, are located, to talk to Walmart about a new initiative to double the amount of local produce the company sells in the United States. Local, for the moment, was being defined as grown and sold within the same state, and Walmart had promised to increase the proportion of local tomatoes and peaches and peppers and watermelons and so on that it sells from about 4.5 percent of its supply to 9 percent by 2015. Which may seem like small numbers until you consider that Walmart sells almost $150 billion worth of groceries a year. Nine percent, hence: a lot of local eggplants.
I had flown to Shreveport and rented a car, thinking I’d drive down through Louisiana, then over and up into Mississippi, and then across Arkansas through the Ozarks to Walmart HQ, spending some time talking to farmers along the way. This turned out to be a route, unsurprisingly, with a lot of Walmarts available for local-produce inspection. At Walmart Supercenter No. 448, a few miles from Shreveport Regional Airport, I bought two local tomatoes ($1.49) and a red T-shirt with america: land of opportunity printed on the front ($5.48). The T-shirt had a tag that told me it had been made in Nicaragua of 100 percent polyester; the tomatoes were less informative, though because I had the Walmart definition of local in mind, I could at least assume that they had been grown in Louisiana. They were the ripest tomato-red they could be, perfect globes, almost like Christmas ornaments. They tasted fine. On my way to the hotel I stopped by the Shreveport Farmers’ Market and bought four much smaller tomatoes ($1.50), cracked and lumpy and cat-faced, streaked with green and smeared with dirt. I thought they tasted better, though not enough better to rule out the possibility that they weren’t better at all, just the beneficiaries of the fact that I’d bought them from a sweet lady who’d picked them herself and, as she bagged them for me, asked me in her sweet bayou accent if I wouldn’t like a little jar of pickled okra, just to try, since I was a stranger to this part of the world.
From Shreveport south, through Cajun country, and then the next day east, past Baton Rouge. The highways, swelling in triple-digit July heat, were dotted with torn-up tire treads, and I made slow progress, unable to resist stopping in Walmarts about every fifty miles or so: Johnny Cash’s 16 Biggest Hits ($5), glazed doughnuts (53¢ each), more local tomatoes ($1.49), a case of Miller High Life ($12.47). In Tickfaw, Louisiana, an hour or so north of New Orleans, I stopped to meet a strawberry grower named Anthony Liuzza. I had reached Liuzza on the recommendation of the Walmart communications team, though Liuzza himself didn’t seem to realize this, that he’d been picked by a public-relations team as a success story. Liuzza is a fifty-five-year-old fourth-generation grower — both his mother’s grandfather and his father’s father had come from Sicily to Louisiana and started growing strawberries on this land — a frank and open guy who has been farming since he graduated from high school, in 1975, and who has been selling to Walmart, happily, for fifteen years.
“We was in a transition, a lot of things was changing at that time with some of our other customers,” he told me, showing me around the property from the elevated vantage of his gigantic white pickup. “Not for the good. So the Walmart thing hit at a perfect time.” The strawberry fields were stripped now — the season was over — but Liuzza had expanded from berries to a much larger operation; he had a whole series of fall fruits and vegetables to sell to Walmart, including cabbage, bell peppers, cucumbers, squash, and tomatoes, and his workers were readying the rows for the new crops. “We was doing direct store deliveries with strawberries at first,” he said. “At that time we was about a twenty-five-acre strawberry farm.” From those twenty-five acres, Liuzza has expanded his fiefdom — now shared with his son, Kevin, and Kevin’s wife, Lizzy — to around 500 acres by trucking his produce to the local Walmart distribution center (known as a DC). As we passed a barn and some prefabricated housing, Liuzza spotted his daughter-in-law, eight months pregnant, talking with a federal inspector sent to survey the living conditions the Liuzzas provide for seasonal workers, and he waved her over.
Lizzy got in the truck, and we headed over to another of the family’s plots, a few miles away in a town called Amite. “We’re expanding,” Liuzza said. “A lot of expansions. I’m going to give credit to Walmart for that. But with that expansion is a lot of expenses.” We pulled into a field with a huge concrete platform in the middle of it. “I want to show you how we’re gonna gear up to do the proper job with Walmart,” Liuzza said, pointing out new cooling and packing and processing facilities they were building. “After working with them all these years, we thought, Well, yes, we’re taking a major chance, because we don’t need this facility if we don’t have their business as a vendor.”
I asked if this wasn’t a little worrying.
“With the economy being what it is, this is not the time to be going into the debt we’re going in. Okay? But we’re doing it. And it’s scary. But, so far, everything we’ve seen, they’ve been behind us.”
“They’ve even been behind us if we want to go to the other local DCs — in fact, they’ve asked us to,” Lizzy said. “They’ve been behind us throughout.” The Liuzzas said they had a close relationship with the company — “I deal with Walmart directly,” Lizzy said; “they want to know what weather we got coming up, what issues we have, they want to know everything” — but sent the paperwork and negotiated most of the deals through a third-party broker, in their case the Minnesota-based logistics giant C. H. Robinson. The prices Walmart gave them were good and consistent, and at every turn, the family felt, Walmart had treated them fairly and understood their needs.
Still, Liuzza had not forgotten why he had needed Walmart in the first place. He had been a big supplier for another supermarket chain — until one day he wasn’t. “We was really doing a lot of things to grow, and all of a sudden, we was still growing but they was done with us. It wasn’t over quality, it wasn’t over prices, it was just a change in direction they was going. The small little deal didn’t matter anymore,” he said. “It scared me — it like to broke me. But my son don’t have that memory. The Walmart deal’s everything for him. When it changed, I looked at my daddy and said, ‘What did we do? What did we do to deserve this?’ But Kevin don’t remember that. . . . He’s taking on a heap of debt to scale up for Walmart, a heap of debt.”
The other supermarket had decided that bigger suppliers made better financial sense. It seemed to me, I said, that Walmart could come to the same conclusion at any time. Liuzza insisted that it was different: he trusted Walmart; there was no reason they’d drop him if he offered them good product. But as I was leaving, he added, “At one time I went to a seminar at Walmart, and I’m listening, and at that time they said they didn’t really want to be over twenty-five percent of your business.”
“Is that still true?” I asked.
“I hope not,” he said, and laughed.
“How much of your business is Walmart?”
“I really don’t want to figure it out,” Liuzza said, and shook my hand and sent me on my way.
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