Suppliers benefit from Wal-Mart sourcing goals

by The City Wire staff ( 12 views 

Officials with Wal-Mart Stores announced earlier this year a plan to source an additional $50 billion in products from the U.S. during the next 10 years. The company said Wednesday (June 5) it is still focused on the goal, with a company in Fort Smith a beneficiary of the effort.

Hal Sirkin, a senior partner with Boston Consulting Group, said the initiative will mean an additional 100,000 U.S. jobs if Wal-Mart is successful.

Michelle Gloeckler, senior vice president of Walmart home, told the media Wednesday afternoon that the retailer is making “great strides” since the initiative was announced earlier this year. She said two-thirds of the products in Walmart U.S. stores are already sourced from the U.S.

Gloeckler highlighted local candle maker Burt Hanna of Fayetteville as one of the existing U.S. suppliers who worked with Wal-Mart on this initiative.

Growing business with existing suppliers is one of the three ways Gloeckler said Wal-Mart will achieve its goal.

Hanna told The City Wire he employs 150 people in his Fayetteville operations and has been manufacturing candles, mostly private label (Mainstay) for Wal-Mart for several years. He said since Wal-Mart has expanded its efforts to source locally, his sales have increased.

Gloeckler said candle sales have risen from $4 million annually to $30 million, and she credits the buyers who are seeking out the opportunities with local suppliers.

Michael Rothbard, CEO of Authentic Comfort, said his firm manufactures memory foam toppers for Wal-Mart, which is 20% of Wal-Mart’s business in this product. He said all the product materials are sourced in the U.S. including chemicals from Peterson Chemical Technology in Fort Smith.

Rothbard said the company’s products are made in Georgia and California and support jobs there as well in other areas such as Fort Smith. He said U.S. manufacturing is more responsive to customer demand and is becoming more feasible for several industries.

Gloeckler said prior to offering the product from Comfort Sleeping, all of the form toppers sold at Wal-Mart were made in China. Rothbard said he had to prove he was able to provide quality and competitive prices. He said Wal-Mart rolled back the price by $10 on the product, added a “Made in the U.S.” tag on it, and sales are up double digit this year over last.

Sirkin said with inflation driving labor costs higher in China, more industries are finding they can be competitive using U.S. manufactured products.

“Overseas manufacturing is no longer the default option. Product coming from China is on the water 2.5 to three months,” Sirkin said.

Gloeckler said Wal-Mart is committed to U.S. sourcing because it just makes sense. She said some studies show consumers will actually pay more for a “Made in America” tag, “but we don’t they should have to.”