Sustainability Helps Walmart and Suppliers Cut Costs

December 22, 2011

It’s no surprise that Walmart needs suppliers to advance its sustainability agenda, but a leading executive went a bit further this week stating that they will “get ahead faster” if they present green innovations.

Fred Bedore

In an interview with Bloomberg, Fred Bedore, Walmart’s senior director for sustainability, said: “It’s about using sustainability as another lens to look for ways to reduce costs, improve efficiency, generate revenue, build their brand as well as our brand… It’s a way to engage with Walmart around something very specific and action oriented and from those conversations spring new ideas, further discussion and ultimately projects we can partner together on. Really it’s a way to get further ahead faster.”

Walmart is also focused on reducing the carbon footprint of its stores, turning to LED lighting to further that mission, Bedore told Bloomberg, noting that earlier this year the retailer opened a store in Wichita, Kan., using 100 percent LED lights. “When you look at some of the unintended consequences we found out that because the lights were cooler it meant that our freezer cases would run cooler, which means less energy,” Bedore said, adding that it helps the retailer reduce cost to customers as well.

Several months ago Walmart announced that 75 percent of its California stores will install solar panels by 2013, a project Bedore said must show return on investment like any other initiative.

“Similar to any other project, whether it’s building a store, acquiring new trucks for our private fleet, building new distribution centers, building new information systems, everything has a particular return on investment, a particular hurdle rate that we look to cover, and these projects are no different,” he said. “We have to make sure we look for a return on investment not only for our shareholders but that’s how we continue to drive costs out of the system and inefficiencies out of the system to make sure we’re delivering on that mission to help our customers save money and live better.”

Asked about a specific example of packaging reduction Walmart has achieved since announcing its plans to reduce packaging by 5 percent by 2013, Bedore relayed a simple step it took with one of its suppliers to remove wire ties. “That ended up being a project that extended globally. We ended up reducing a billion feet of wire that would have gone to landfill [each year] because we didn’t have it in the packaging anymore,” Bedore said. “The other benefit that came from that were happier customers because they weren’t frustrated by trying to pull all these wire ties of their products after a kid would unwrap a birthday present or Christmas present. It was better customer engagement, it was lower cost, it was better for sustainability so it won along multiple fronts.”

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