The Fresh category includes 23 foods, including avocados, lemons, mangoes, melons, watermelons, and tomatoes, which are harvested from states such as Michoacán and Oaxaca. Noble ensures that producers who are part of the Walmart program receive payment for their merchandise at market price within a maximum period of seven days.
Since its inception in 2011 with 23 producers, the training program for small agricultural producers has grown significantly, currently reaching 4,000 farmers located in 18 states of the country. The sales tests were carried out in 2019, and the following year the farmers managed to invoice 600,000 pesos. So far this year, that figure has increased to 8.4 million pesos, according to data shared by Gisela Noble.
To establish an efficient supply chain, Walmart performs an analysis to determine which distribution centers are closest to the producers, so that the products can be shipped directly to the stores, optimizing the logistics process.
Among the benefits that retailer The company has found in developing small producers that, by removing intermediaries from this value chain and making the purchase directly from the producers, the merchandise has more days of freshness since fewer people handle the products.
“There is more time on the shelf because the product arrives fresher. It is literally harvested and delivered the next day,” explains Gisela Noble.
The board, however, declined to give details about the savings Walmart has realized by cutting out intermediaries or whether it has been a factor in the category’s sales growth.
The growth process
Gisela Noble highlights the development programs that Walmart implements to support small producers, including training in regenerative agriculture techniques, improving logistics and packaging, as well as establishing processes for receiving orders, issuing invoices, and calculating costs and profits.
So far, more than 23,000 small producers have received agronomic training, providing them with tools to improve their agricultural practices, such as the use of fertilizers. These programs are designed and taught by a Non-Governmental Organization.
In addition, to identify possible participants, a group of technical leaders visit the communities to offer training in market access. Producers who choose to participate are not required to sell exclusively to Walmart. According to Noble, only with agronomic training, producer incomes grow 36% in two years, and from the first to the third year in the commercial market, incomes increase 81%.
Noble also mentions that this program establishes links between agricultural producers and other companies such as Unilever or Danone, which use fruits and vegetables in their production chains.
The general director of the Walmart Foundation highlights the importance of adapting purchasing rules to allow the growth and consolidation of small producers.
“Wanting to treat a small producer like a big one is not possible, therefore, changing the purchasing rules helps them to consolidate, to make the investments they require. As they get used to the market volumes, they are gradually incorporated into the regular process, removing special conditions. That is the essence of the program,” concluded Noble.