I don’t usually look to Gourmet magazine for political or business analysis, but one of the best pieces I’ve read on Wal-Mart is in the June issue (not available on the web). It looks at how the world’s biggest company’s entry into food retailing only 17 years ago has transformed the industry. Supermarkets are under unprecedented pressure. Wal-Mart already has 15% of national food sales and is aiming for 35% by 2007. Suppliers have had to trim their product lines and cope with Wal-Mart’s steady pressure to reduce prices.

All of that is familiar to anyone who has read the business press. What makes the article so good is the detail, particularly from the suppliers. Consider dairy producer Organic Valley. At first, it decided to become a Wal-Mart supplier. CEO George Siemon explains:

My family was devoted to downtown business, and the trend was toward mall shopping. So for me, my lesson from that is: If you’re going to have a mission, that’s great. But in order to keep that mission, you have to run a professional business and stay up on what goes on. Nowadays, what’s the trend? Wal-Mart.

But subsequently, Wal-Mart finds another “organic” milk supplier, Horizon (there’s a very interesting discussion about just how Horizon can claim it’s organic, incidentally), that will accept a lower price. What does Organic Valley do? “Realizing that the writing was on the wall — that the pressure to push down prices while maintaining a steady supply might just overwhelm his company, especially since it could hardly keep up with demand as it was — Siemon decided to pull out of Wal-Mart altogether.” It’s apparently the first time that a supplier decided to get out of Wal-Mart.

The article also points out the pro-Wal-Mart arguments. Significantly lower prices for its customers, and access to products — like organic milk — that might otherwise be difficult to source in many of its superstore locations. A really good piece of journalism that helps the reader understand one of the most significant developments in business today.