2015 Global Responsibility Report

Supplier diversity

At Walmart, we believe we’re at our best when we promote diversity across our supply chain. For our suppliers, working with Walmart means access to the nearly 260 million customers who shop our stores around the world each week. For us, supplier diversity means delivering better products and a broader selection to the communities we serve. Through our supplier diversity efforts, we’re committed to creating economic growth and sustainable communities by:

  • Increasing sourcing from businesses owned by people of diverse backgrounds, including minorities, women and people with disabilities
  • Fostering an inclusive supply chain that’s relevant to our customers and meets their needs



Supporting supplier diversity


Supplier Diversity Summit
Each year, our Supplier Diversity Summit serves as an opportunity for suppliers and our buyers to engage. The purpose of the summit is to:

  • Advise, advocate and advance dialogue between diverse businesses and the internal stakeholders that will help our customers save money and live better
  • Help potential suppliers understand our EDLC & EDLP strategy
  • Create the opportunity for suppliers to present their products to our buyers
  • Engage our buyers to leverage the insights, innovation and expertise of diverse suppliers
  • Perpetuate the impact of diverse businesses in the communities we serve

Collaboration
We support and collaborate with leading organizations that advocate on behalf of diversity-owned businesses. These partnerships include:

  • National Minority Supplier Development Council
  • Women’s Business Enterprise National Council
  • U.S. Pan Asian American Chamber of Commerce
  • USLBN Disability Supplier Diversity Program
  • WEConnect International
  • Department of Veterans Affairs Center for Veterans Enterprise

Aspiration

Increase sourcing from diverse suppliers and encourage inclusion of women and minorities on key account teams of major suppliers serving Walmart and Sam’s Club.

In FY2015, we spent approximately $13.5 billion with diversity-owned businesses. This includes $10.4 billion in direct spending and $3.1 billion in second-tier spending.

At the end of 2014, more than 65 professional-service suppliers have reported the gender and ethnicity of their Walmart and Sam’s Club teams. In 2015, we are working to extend tracking requests to Walmart and Sam’s Club suppliers with more than $1 billion in annual sales.

Milo’s Tea
Milo’s Tea CEO Patricia Wallwork said her mother brought the product to retail in 1946 after the homemade iced tea was selling out at her grandparents’ restaurant in south Alabama.

“I’m not a billion-dollar company, but my family has been making this product for three generations, and I believe our passion for what we do shows in our product,” Patricia said. “So having the opportunities that larger companies would have is really what Walmart’s Women’s Economic Empowerment initiative gave us. It’s really opened so many doors, including selling our product on the shelves of the largest retailer in the world.”


Lefty's Spices
Lefty’s BBQ has been a popular, family-owned business in Maryland for more than 25 years, but Walter Nash, CEO, had even bigger ideas.

“I thought, we can take these products that everyone is cannibalizing every day here in the restaurant, and we can package and put them in the grocery retail industry,” Walter said.

Less than two years later, Lefty’s Spices — a line of original sauces, rubs and seasonings — can be found in Walmart stores across the country.

“Walmart got behind us — it really understood what we were doing,” Walter said. “But we went into the opportunity really wanting to know how we could fill a void in a Walmart space as well. It’s been a great match.”

Alexa Brands
Claudia Hoexter, founder and CEO of Alexa Brands, recognized an opportunity. What if there were a way to capture those seemingly unreachable final ounces of lotion, conditioner and makeup at the bottom of containers?

She provided an answer with the invention of the Beauty Spoon. Already a supplier for Walmart, she learned about our Supplier Diversity Program and took full advantage.

“People are throwing away money each year with all the product left at the bottom of containers,” Claudia said. “Walmart believed in me and looked for ways to drive exposure to my products and brand.”

Challenges: Supplier diversity

For diverse businesses, access to corporate America often requires capacity, access to capital and the ability to execute against specified requirements. We continue to create opportunities through education forums, training and development platforms that will help equip diverse business owners with the knowledge and experience necessary to build a sustainable partnership with corporate America.

Local manufacturing

Sourcing goods close to where they’re sold can be beneficial for local economies and the planet. This is why Walmart is committed to increasing local manufacturing in our retail markets. Specifically, in the U.S., Walmart has committed to giving manufacturers confidence to invest capital in America — and is playing a key role in helping revitalize the communities we serve through the support of new industries and job opportunities, while significantly reducing shipping miles, greenhouse gas emissions and more. Inspiring a manufacturing comeback requires a national effort by companies, industry leaders, lawmakers and others. We’re acting on our convictions by:

  • Leveraging our buying power to inspire a manufacturing comeback in the U.S.
  • Empowering innovation that makes production more affordable and feasible in the U.S.


Aspiration

In 2013, Walmart announced it would purchase an additional $250 billion in products supporting American jobs by 2023.

January 2015 marked the second anniversary of Walmart’s journey to source $250 billion in products supporting U.S. jobs over 10 years. We’re on target to reach our commitment by 2023. From light bulbs to towels, patio furniture to toys, suppliers are expanding manufacturing or assembly in the U.S.

Snapshot of progress

We’re working toward our goal in three ways — increasing the purchase of goods already sourced, made or assembled here; sourcing new U.S.-made or assembled goods where it is economically feasible; and moving production to the U.S.

  • NUK reshored its production of pacifiers from Europe to Reedsburg, Wis., in fall 2014.
  • Chef Jenn, a U.S.-based manufacturer of seafood entrees, connected with Walmart through an Open Call last year, and her products are now sold in 800 of our stores.
  • PEDS, a Canadian-based legwear manufacturer, recently opened a facility in Hildebran, N.C., where it produces socks for more than 2,000 Walmart U.S. stores.


Kent International: Bringing bicycle assembly back to the U.S.
For 56 years, Kent International Inc. has designed and produced bicycles. And for the majority of those years, the manufacturing has taken place in China and Taiwan. But in 2008, CEO Arnold Kamler found his family-owned company at a point that called for shifting gears.

“It was a perfect storm. You had steel, aluminum, oil, plastics, ocean freight, currency — everything at one time going up,” Arnold said. “I spent about six weeks traveling all over Asia, asking myself, ‘If not China, then where?’ The answer seemed to be nowhere for bicycles. The idea in the back of my mind was that maybe one day we could do it here in the U.S. Then, last year, we got serious.”

In March 2013, Arnold met South Carolina Gov. Nikki Haley at Walmart’s Year Beginning Meeting, an annual gathering of Walmart managers and suppliers. The two began discussing the possibility of Kent’s opening a factory in South Carolina. According to Kent, the company has since invested $4.3 million in a new assembly facility in the small town of Manning. By the end of this year, Arnold says, the factory will have produced 50,000 bikes for distribution to Walmart stores across America. By the end of 2016, Kent will have produced 500,000 bicycles. And another great number? Arnold estimates that the factory will bring 175 jobs to the area over the next three years. They are also in discussions to grow their U.S. production even further.

2014 U.S. Manufacturing Summit
We gathered government leaders, suppliers and Walmart executives in Denver on Aug. 14, 2014. In addition to hearing from Walmart executives, government leaders and industry experts, they had a forum for meetings between suppliers and various state representatives and economic development organizations. There was also an opportunity for meetings between suppliers and raw material and component providers, as well as investors and financial institutions.


Aspiration

In January 2014, Walmart and the Walmart Foundation announced the creation of a $10 million U.S. Manufacturing Innovation Fund to award those who create new processes, ideas and jobs that support America’s growing manufacturing footprint. The fund is being executed in collaboration with the U.S. Conference of Mayors.

Walmart and the Walmart Foundation awarded $4 million in grants to seven leading research and development institutions to solve manufacturing challenges related to small motor assembly, plastic injection molding and advanced textiles. We expect to issue a second request for proposals in 2015.

Grants to date:

Georgia Tech Research Corporation for innovation of thread-count-based fabric motion control, a critical enabling technology for the automated production of sewn goods.

Indiana University-Purdue University Indianapolis to advance and accelerate the industrial implementation of metal 3-D printing for the manufacturing of plastic injection tooling as an alternative to current metal-shaping practices.

North Carolina State University College of Textiles to address challenges to the manufacturing of furniture cushions in the U.S. by implementing new technologies in both fabric printing and cut-and-sew automation.

Oregon State University to develop two novel alternative mold fabricating approaches and evaluate for functionality, precision and cost reduction potential.

Texas Tech University to support collaborative research on cotton breeding and biotechnology, cotton production and various aspects of textile manufacturing, dyeing efficiency and specialty finishes.

The University of Texas at Arlington to develop a novel manufacturing system that will autonomously prepare small motor subsystems and assemble the motor components.

The University of Georgia Research Foundation Inc. to develop an innovative approach to fabric dyeing that will greatly reduce, and perhaps eliminate, the need for water in dyeing cotton and cotton/polyester fabrics and yarns.


Made in USA Open Call event
Walmart hosted our first Open Call event on July 8, 2014. We invited more than 500 suppliers and potential suppliers to come to the Home Office in Bentonville, Ark., to pitch their new products. Our buyers conducted 800 face-to-face meetings in one day.

Challenges: U.S. manufacturing

According to our suppliers, about two-thirds of what Walmart spends to buy products in our U.S. stores is made, assembled, sourced or grown domestically. We know there’s room to do more, and we’re playing an active role in helping rebuild manufacturing in the U.S.

Small business

Around the world, small businesses and entrepreneurs report access to capital as a major barrier to growth. For example, the banking industry in the aggregate appears increasingly less focused on small business lending. The share of small business loans of total bank loans was about 50 percent in 1995, but only about 30 percent in 2012. Moreover, small business owners report that competition among banks for their business peaked from 2001 to 2006, and has sharply declined since. On the flip side, mission-driven lenders and Community Development Financial Institutions (CDFIs) that specialize in assisting low-to-moderate income communities have not had the resources to scale lending for micro- and small-business entrepreneurs. Sam’s Club and the Sam’s Club Giving Program are committed to helping underserved Main Street business borrowers more effectively access capital and training to grow their businesses by:

  • Investing in mission-driven lenders and CDFIs to build their capacity and scale to better serve micro- and small-business owners
  • Contributing to the development of business borrower education programs and tools that create greater transparency so borrowers are better equipped to choose the right product at affordable rates
 

Aspiration

Reach small-business owners with education, training and technical support; help unlock loans; scale microlending; and create Main Street jobs in the U.S.

Since 2010, Sam’s Club and the Sam’s Club Giving Program have provided more than $18 million in grants to nonprofits to help local Main Street business owners access capital by increasing the availability and type of products to meet their needs responsibly so they can thrive and create jobs. This has contributed to training more than 20,000 micro- and small-business owners.

The Dog Stop — Pittsburgh, Pa.

Community Impact: Projected 6 new jobs, 50 percent woman-owned and 50 percent veteran-owned

James McGreehan and his business partner, both dog lovers, dreamed of a full-service doggy day care in Pittsburgh, but were turned down by seven banks because they were not comfortable financing the dog-care industry. They were referred to Community Reinvestment Fund (CRF), a Sam’s Club Giving Program grantee, and, because of their extensive business experience, projected industry growth and strong community impact, secured a $150,000 loan to purchase equipment, prepare their leased space and access working capital.

Tea Gallerie — San Diego, Calif.

Community Impact: Planning for geographic expansion and product development of caffeine-free tea alternatives for children.

Maria and John Harrison launched Tea Gallerie in San Diego with a tea party for friends in their own backyard in 2011. “Our friends were our focus groups,” Maria remembered. “We worked hard to maintain that mom-and-pop feel. We learned our clients’ first names and did a lot of community outreach. We wanted to help our family and friends improve their health — one cup at a time.” Eventually, the couple cashed in their investments and utilized their savings to finance the business, but it still wasn’t enough. Denied by local banks, they were eventually able to secure a $10,000 loan from Accion, a Sam’s Club Giving Program grantee working to build a financially inclusive world where every individual has access to high-quality, affordable financial services.

“We were so happy that someone trusted and believed in us and our business,” Maria said. “We used the funds to develop our website and purchase thousands of pounds of tea. Accion wasn’t just a financial partner, it was a supportive community partner, marketing us in so many ways.”

 

Asda’s carrier bag charge charity partnerships

In an effort to promote resource efficiency and reduce litter, the Scottish Parliament passed the Single Use Carrier Bags Charge (Scotland) Regulations in October 2014. This requires all retailers to charge a minimum of 5p for each new, single-use carrier bag. The net proceeds of the charge, which Asda anticipates will generate approximately £700,000 (approximately 1,044,783 USD) per year, are to be donated to good causes.

In what represents a first in the U.K., Asda will allocate half of its carrier bag proceeds for social investment loans through the Social Investment Scotland organization. Investment capital of between £10,000 (approximately 14,928 USD) and £50,000 (approximately 74,630 USD) will be made available for new social enterprises, meeting a gap in the current market for smaller loans. Social Investment Scotland’s loans will be interest-free the first year and all interest charged during the second year will be reinvested to support additional causes, delivering sustainable social impact in communities across Scotland.

By working with Social Investment Scotland, we can help ensure the charge delivers meaningful, sustainable benefits for Scotland, helping drive growth, create jobs and regenerate communities for the long term. The other half of the funds will be donated to Foundation Scotland to be distributed in small grants. Customers and colleagues will have the opportunity to nominate projects and good causes in their local community that would benefit from Asda Community Capital grants of up to £2,000. To ensure the grants are as locally relevant as possible, regional selection panels of Asda colleagues will vote on the projects to benefit.

 
Challenges: Small business

Community Development Financial Institutions (CDFIs) have historically operated as place-based brick-and-mortar establishments. They have expertise in building relationships in their local communities and tailoring their support of business owners based on need. Despite the fact that CDFIs are capable of delivering effective technical support and positive outcomes and there are about 3.7 million businesses with under $500,000 in revenue, microlenders disbursed only 36,936 loans in 2012. The average microlender disburses only 201 loans per year in the U.S.

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