The Supply Side: Wal-Mart’s women empowerment effort exceed goals

by The City Wire staff ( 21 views 

Retail giant Wal-Mart Stores has plenty of publicity-generating irons in the fire from onshoring manufacturing jobs, hiring veterans and sustainability pushes. But one initiative that often goes underreported is the retailer’s economic empowerment of women program — an effort announced in 2011 by then-CEO Mike Duke.

In 2011, Wal-Mart pledged to source $20 billion from women-owned businesses for its U.S. segment by the end of 2016.

MiKaela Wardlaw Lemmon, senior director for women economic empowerment at Wal-Mart, told The City Wire that the retailer remains focused on leveraging its size and scale to empower women across its global supply chain. Lemmon said over the past two years the retailer has developed a comprehensive women-owned business sourcing strategy and sets annual goals with respect to the $20 billion in purchasing power.

“We met the annual goals in the first two years and our spending since then is $400 million ahead of our goal. We are actively working toward growing our women-owned supplier base,” Lemmon said.

Wal-Mart has roughly 1,000 suppliers who made their way on to the retailer’s shelves through the women-owned business initiative.

Women-owned businesses contribute over $1.3 trillion dollars to the U.S. economy and women are responsible for over 80% of the consumer decisions globally.

Maggie Cook, founder of Maggie’s Salsa, said working with Wal-Mart through the empowering women’s initiative is a great opportunity for her to grow the small business she founded after immigrating to the U.S.

“Women-owned businesses have so much to offer and research shows that women shoppers often gravitate toward the products from woman-owned businesses,” Cook told The City Wire.

Cook, whose full name is Maria Magdalena De La Cruz Cook-Garcia, was born in a Mexican orphanage. Her parents cared for 200 children through the years, legally adopted 60 children and had eight biological children of their own.

By chance she caught the eye of college basketball scouts when her family visited the U.S. on a fundraising mission for their charity organization. Cook dreamed of playing basketball for the Mexican National Team, but that did not happen. Her luck changed when she joined a pick-up game while her family was visiting in West Virginia. The University of Charleston’s (West Virginia) basketball coach saw her play and offered a scholarship.

Cook graduated with a degree in interior design and in 2004 she started Maggie’s Salsa after winning a local salsa contest by unanimous vote. She got the company off the ground with $800 in seed money from a friend and made her first store sale using 6 tomatoes. In 2007, Whole Foods placed an order that required 60,000 tomatoes and she has never looked back.

Dan Irwin, a category director for product at Walmart U.S., said when he tasted Maggie’s Salsa he knew quality and freshness was important and that it would be a great product for Wal-Mart. 

Cook employs 18 people in her small company and outsources the production and distribution to another salsa manufacturer who follows her ingredient requirements.

“Our sales are growing with Wal-Mart and Sam’s as we are in the mid-Atlantic region there. In addition we are in Whole Foods and Kroger,” Cook said.

In July, Wal-Mart was the first retailer to announce its commitment to the Women's Business Enterprise National Council (WBENC) efforts to bring forth a new logo label identifying goods as produced by women-owned businesses.

“At Wal-Mart we are committed to empowering women and impacting women-owned businesses from around the world — and so are our customers. We recently conducted a survey that found 90% of female customers in the U.S. would go out of their way to purchase products from women, believing they would offer higher quality,” Lemmon said.

Wal-Mart’s role in the process was to collaborate on the logo design and conduct the supporting research. The retailer said consumers will begin seeing the new logo on its shelves in September. 

Cook said she plans to use the new woman-owned business labels that will help more consumers know the Maggie’s Salsa is a woman-owned enterprise.

Wal-Mart said the majority of its 245 million customers per week are women, and women control more than $20 trillion of annual consumer spending globally. With nearly 1 billion women estimated to enter the global economy during the coming decade, 

Wal-Mart said it’s taking the lead in sourcing from and providing access to markets for those women because it promotes economic growth and better lives for their families.

In 2012, Wal-Mart estimated 224 million women were starting or running businesses in 67 countries around the world. Many of these women are planning for significant business growth; however, substantial barriers challenge female entrepreneurs who hope to grow their businesses. For example, although 29% of U.S. businesses are women-owned, enterprises owned by men are more than three times as likely to reach $1 million in annual revenue. 

“We work to address barriers and help women-owned businesses and our merchants work more effectively together,” Wal-Mart said.

Lemmon also notes that a key to the program success has been the Women-Owned Business Advisory Council (WOBAC) made up of internal advisors, industry leaders, merchants and suppliers. Through conversations with industry leaders, our merchants and suppliers, the retailer identified challenges facing woman-owned businesses and, along with supplier diversity and supplier administration, they implemented a variety of tools and resources to address them.

Wal-Mart developed scorecards to ensure their merchants and other leaders have more visibility into the woman-owned suppliers they work with and how each area of the business is tracking against its target. 

In 2013, Wal-Mart conducted two types of supplier summits. The first allowed teams to discuss strategic business growth opportunities with women suppliers. The second focused on finding new suppliers. Wal-Mart and Sam’s Club held 10 summits last year to help grow existing or identify new suppliers, Lemmon said.

Wal-Mart launched the Supplier Academy in November 2013, which is a set of online educational modules designed to prepare “merchant-ready” suppliers and buyers to work with them. 

Modules such as “Keys to a Successful Buyer Presentation” and “Working with Small and Diverse Suppliers” are aimed at developing strong working relationships and set both sides up for success, the retailer notes.