Is Wal-Mart Really Going Green: In Jeffrey Hollender We Trust

I have discussed in previous posts that with the craze for everything organic, companies and brands are collaborating marketing tactics and teaming up to meet the demand for environmentally friendly products. This common practice, when used appropriately and ethically, has yielded profitable results as well as received praise from consumers and environmental activists. It is interesting to note, however, when collaborative efforts raise controversy and stir debate. In that spirit, an interesting and timely move has been made between Seventh Generation, a leading brand in green household products, and Wal-Mart, a big box supercenter. This past weekend, Wal-Mart has extended its business model and launched a new retail concept called Marketside, which consists of four small stores (10,000-12,000 square feet) located in Arizona. Each Marketside store is dedicated to providing natural and organic offerings and will be operated and staffed independently of Wal-Mart, yet is a fully owned subsidiary of Wal-Mart. These stores are approximately 10,000-12,000 square feet and will be dedicated to natural and organic products and offerings. This new retail format comes as no surprise to consumers as Wal-Mart has made several attempts to eradicate harsh feelings towards the corporation and brand as a whole. However, it does come as a surprise that Seventh Generation is joining this movement in that CEO Jeffrey Hollender (see right) has made public statements that he will never do business with Wal-Mart, or at least not until hell freezes over. While Seventh Generation products will not be sold at Wal-Mart supercenters, they will be available for purchase at these four Marketside stores. We may look at this move with some skepticism and fear, and for good reason, but I have to wonder whether it is purely cynical to question that Wal-Mart may actually be going green.

Wal-Mart has received much criticism towards its labor practices, work hours, pay rates, aggressive market entrances that wipe out small businesses, environmental unfriendliness, and the list goes on. There are also those who swear by Wal-Mart and will continue to be devoted shoppers regardless; the debate over whether Wal-Mart is good or evil may never stop. And the sudden change of heart from the well-liked and trusted Hollender, who has made the long-anticipated decision to engage in business with Wal-Mart, has raised some eyebrows. We can trace the beginning of these friendly relations between Wal-Mart and Seventh Generation to the Wal-Mart Sustainability Milestone Meeting, when Wal-Mart CEO Lee Scott announced innovative plans to progress Wal-Mart's sustainability initiatives. These included selling greener products and local foods, and more efficient supply chain management which yields less waste. While not fully convinced, these efforts had traction enough to catch the attention and hope of Hollender. In Hollender's blog post titled "Whirl-Mart: Back In the Belly Of the Jolly Green Giant" he states, "I am exhilarated. I am watching the Jolly Green Giant bend down and pick daisies rather than run blindly across the field crushing all in its path. I am hopeful, glad to have come, and ready to provide any and all with advice". Hollender's optimism towards Wal-Mart and its business plans may in fact prove to be a good thing. 

In Hollender's recent blog entry Has Seventh Generation Sold Out by Working with Wal-Mart? he discusses the reasoning and logic behind the move to sell Seventh Generation products at Wal-Mart Marketside stores. He acknowledges that Wal-Mart has made improvements and changed for the better. They are currently the world's largest buyer of organic cotton, have energy-conserving stores with wind turbines and solar panels, use more efficient shipping methods, reduced "high-risk violations" by forty percent, as well as increased the amount of women in ranking position by forty percent. He notes that Wal-Mart's sales record from 2007 shows that they are "almost single-handily leading the switch from incandescent to energy efficient lighting", as well as have transformed the entire laundry detergent industry. For all those skeptics out there, these are no small feats. I would like to note that Hollender uses a tweaked version of Reagan's axiom "trust, but verify" as a model for this business relationship and we can rest assured he will hold true to this.

Does Hollender truly believe Wal-Mart has changed, or is the potential profit of a capitalistic maneuver too tempting to resist? Hollender is not only a well respected and praised CEO, his company has received awards and recognition over the course of his reign. In 2002, Seventh Generation received the Socially Responsible Business Award, which recognizes companies that have excelled in socially responsible business practices, marking the beginning of the company's acknowledgment in the eco-friendly realm. Since then Seventh Generation has received a Sustainability Award from the Alliance of Sustainability, a Social Capitalist Award, and a Customer Excellence Award in Environmental Stability, to name a few. This year Jeffrey Hollender was awarded the Entrepreneur CEO of the Year by Corporate Responsibility Officer magazine. Furthermore, Hollender asks for our understanding. In his blog he observes, "I realize this isn't going to make me a more popular guy, but I also believe -- to the core of my soul -- that it's the right thing to do". Even if Wal-Mart is not trusted based on its past actions, it is a year to believe in change and the opportunity for good, and we can trust that Hollender has made this decision with benign intent.