Supplier Opportunity

SASB: FB-FR-430a.3
GRI: 102-9; 202; 204-1
UN SDGs: 2, 5
S | Published April 29, 2022

Through sourcing, Walmart intends to delight our customers around the world while promoting inclusive economic growth and development. We aim to create economic opportunities for the people who work throughout our supply chains - our suppliers, the people they employ and their communities.

The core of our business is bringing quality, affordable food and other products to our hundreds of millions of customers around the world. The purchase orders we place to procure those products can have a profound and positive effect. Strategically sourcing products from a mix of large, small, diverse and local suppliers supports the economic inclusion of suppliers who might not otherwise have the opportunity to bring their products to market, helps existing suppliers grow, provides opportunities for members of underrepresented communities to thrive and stimulates job growth in the markets in which the products are made. For Walmart, these strategies enhance our ability to offer a broader assortment of unique and hard-to-find products to our customers and can improve surety of supply and supply chain resilience.

Through sourcing, Walmart aims not only to delight our customers but also to provide opportunities for the economic growth and development of people who work throughout our supply chains — our suppliers, the people they employ and their communities.

According to suppliers, most of Walmart U.S.’s total product spend was on items made, grown or assembled in the United States. Because of the desire to meet customer demand for variety, quality and affordability of products ranging from mangoes to electronics, we also source products from around the world.

As part of our local and global sourcing programs, we pursue several special programs and initiatives focused on building a more inclusive and diverse supplier base and contributing to local economies. These programs and initiatives aim to:

• U.S. Manufacturing: Support the creation of American jobs by increasing Walmart's sourcing of products made, grown or assembled in the U.S. and investing in the development of "American Lighthouses," to identify and overcome barriers of production in key manufacturing sectors.
• Supplier Inclusion: Source from and build capacity of diverse suppliers,² including suppliers owned and/or operated by women and people of color.
• Make in India: Triple exports of goods from India to $10 billion per year by 2027 and building on the success of the Vriddhi program we launched in 2019.
• Smallholder Farmers and Small Producers: In Central America, India and Mexico, source directly from smallholders and/or small producers and invest through philanthropy in facilitating market access and building capacity of smallholders across the sector.

U.S. Manufacturing | Supplier Inclusion | Make in India | Smallholder Farmers & Small Producers

Walmart has a long history of supporting American-made products. According to data from our suppliers, in FY2022 nearly two-thirds of Walmart U.S.’s total product spend was on items made, grown or assembled in the United States.

Through our America at Work initiative, we continue to invest in products that support the creation of American jobs. As of the end of FY2022, we have purchased $196 billion towards our original commitment in 2013 to invest over ten years an incremental $250 billion over our FY2013 purchases. In 2021, we started a new commitment to invest over the next ten years an incremental $350 billion over our FY2021 purchases in products made, grown or assembled in the United States. As of the end of FY2022, we have increased U.S. purchases by $12 billion towards this new goal. Walmart estimates that this additional investment of $350 billion over ten years has the potential to support more than 750,000 new jobs³, and avoid more than 100 million metric tons of emissions.⁴

To support our America at Work initiative, Walmart hosted our eighth annual Open Call for shelf-ready products made, grown or assembled in the U.S. in June 2021. More than 900 small- and medium-sized business owners (representing all 50 states, Washington D.C., and Puerto Rico) pitched their shelf ready products to Walmart U.S. and Sam's Club merchants.

In 2021 we launched a collaborative initiative called “American Lighthouses” to identify and overcome top-down barriers to U.S. production. Our focus is on five key supply chains. We aim to foster collaboration among local supplier communities as well as others from civil society, academia, government, and local economic development groups. Work has begun on two supply chains - textiles and pharma/medical supplies - and will expand to three other supply chains over time - plastics, food processing, and motors/metals.

We have also produced resources and tools for suppliers, such as our Jobs in U.S. Manufacturing Portal (JUMP). In addition, to bring the stories of our suppliers and Walmart's America at Work commitment to life, we held a virtual day of meetings with federal officials where we shared examples of the real impacts of our programs on business growth and job creation. Suppliers joined Walmart to share their journey, many having come through our annual Open Call event, highlighting what Walmart's commitment means to American manufacturers, entrepreneurs, and diverse small businesses.

Through our supplier inclusion program, Walmart seeks to foster equity and inclusion of underrepresented and disadvantaged groups while enhancing our product offering.

Walmart's supplier inclusion program provides companies owned and operated by racial and ethnic minorities, women, veterans, members of the LBGTQ+ community and people with disabilities equal footing to effectively work with us while at the same time growing their business. A diverse supply chain helps us deliver the products and services our customers want and need at affordable prices.

For our U.S. businesses we sourced more than $13.3 billion in goods and services from approximately 2,600 diverse suppliers² in FY2022. Our Supplier Inclusion Team is dedicated to supplier inclusion and works directly with interested suppliers and regularly attends business conferences, product and procurement fairs, expos and similar events to help identify potential new diverse suppliers. In addition, our Supplier Inclusion Portal provides current and potential suppliers with information on our supplier inclusion program and requirements.

In FY2022, we enhanced two existing supplier programs to provide diverse-owned businesses quicker access to capital and increased opportunities to connect with our merchants. In April 2021, we partnered with C2FO to expand on our existing early payment program to help diverse- and minority-owned suppliers increase their cash flow by accelerating their receipt of invoice payments from Walmart. The program enables these suppliers to hand-select invoices to request early payments on at significantly reduced rates. This gives these suppliers the ability to receive paid invoices within 48 hours of submission.

In November 2021, we built upon our successful annual Open Call concept by expanding our partnership with RangeMe/ECRM to launch a diverse-supplier submission link on our Supplier Inclusion home page. The link allows diverse suppliers to propose new products for sale at Walmart by submitting their products for review to our merchants and to receive real-time feedback through the technology driven platform.

Also in FY2022, we launched a Supplier Inclusion Advisory Council. The Council's aim is to foster, promote, grow, develop, and retain a robust inclusive supply chain. The Council provides guidance and recommendations on how to best engage and develop diverse suppliers to the individual merchant teams across every business segment as well as to the Supplier Inclusion team and executive leadership.

For more information on our supplier inclusion work, please see our Supplier Inclusion website.

In December 2020, Walmart announced it will seek to triple its exports of goods from India to $10 billion per year by 2027. Walmart has sourced goods from India for more than 20 years, supporting local suppliers to build their capabilities and develop new product lines to meet international standards. We expect this commitment to provide a significant boost to suppliers in India.

We are maintaining our focus on building supplier capabilities through Flipkart’s Samarth initiative and Walmart’s Vriddhi Supplier Development Program (Walmart Vriddhi) launched in 2019, which aims to train and prepare 50,000 of India’s micro-, small- and medium-sized enterprises (MSMEs) to “Make in India” for global supply chains by 2025.

In collaboration with Swasti, Walmart Vriddhi provides a comprehensive learning platform that includes growth opportunities, free training and in-depth expert support to entrepreneurs and small businesses. This program helps unlock India's entrepreneurial capacity and enables MSMEs to thrive in the global marketplace. In September 2021, over 2,500 MSMEs from across India participated in the first group to graduate from the Walmart Vriddhi program. By the end of 2021, Vriddhi activated 10 e-Institutes across 50 cities in India, broadening its reach to suppliers that have the desire to make in India or sell around the world. Swasti, the program partner for Walmart Vriddhi, signed memorandums of understanding with the governments of Haryana, Madhya Pradesh, Tamil Nadu and Uttar Pradesh to provide training for MSMEs through Walmart Vriddhi.

Through sourcing and philanthropy, we aim to help connect smallholder farmers and small producers to domestic markets while strengthening their capacity and resilience.

We aim to use our scale to benefit suppliers and one way to do this is to buy directly from local suppliers, without the use of intermediaries. Walmart Mexico and Central America (Walmex) has more than 86,000 suppliers, and 93% of Walmex's self-service format suppliers in Mexico are small and medium enterprises. Ninety-two percent of merchandise sold in Mexico is sourced in the country while 83% of merchandise sold in Central America is sourced from the region. Walmex also has specialized supplier development programs focused on small and medium enterprises, including Adopta Una PyMe ("Adopt an SME"), Una Mana Para Crecer ("A Helping Hand to Grow"), Tierra Fértil ("Fertile Soil"), and Pequeño Productor ("Small Farmer").⁵ Through the Central America Tierra Fértil Direct Farm program we purchased a total of more than 1.7 billion pesos from these farmers, representing 68% of the produce and cereals sold by our stores in Central America. In addition, during 2021, 1,553 people received training, of whom 30% were women, in reduced environmental impact techniques, enhanced productivity, guaranteed food safety of products we purchase and how to increase sales.

Our South Africa subsidiary, Massmart, promotes the growth of SMEs through its Supplier Development Program (SDP). The aim of the Massmart SDP, which was established in 2012, is to provide opportunities for small and medium manufacturing enterprises and gives preference to black-owned and black women-owned enterprises.The SDP involves assisting suppliers to increase overall competitiveness by meeting product quality standards, investing in bespoke manufacturing equipment to build capacity and providing retail and business management training. As of December 31, 2021, the program had a portfolio of 21 small businesses. Massmart has procured over R1.5 billion from suppliers in this program since inception.

The Walmart Foundation has awarded grants of more than $67 million to benefit smallholders in Central America, India and Mexico since 2017. These grants are expected to reach over 730,000 smallholder farmers (of whom over 320,000 or 44% are women) through programs aimed at enhancing farmer livelihoods and value chains, encouraging the adoption of sustainable agriculture practices, unlocking access to finance, growing formal market linkages, strengthening Farmer Producer Organizations (FPOs) and empowering women farmers in FPOs.

As part of this total reach to smallholders, the Walmart Foundation's smallholder investments in India, to date, include over $29 million, making good on a 2018 commitment to invest $25 million over 5 years to improve farmer livelihoods in that country. The collective impact of these investments include:

• Grants to 17 grant programs (13 grantees)
• Grants spanning the Indian States of Andhra Pradesh, Uttar Pradesh, Telangana, Karnataka, Odisha, Jharkhand and West Bengal
• Support for over 590,000 smallholder farmers (of which over 280,000 or 48% are women)
• Support to over 400 FPOs
  

Investments in FPOs are designed to help organizations build capacity, establish regional solutions, reach many smallholder farmers, and empower women. Priority interventions at the farm and FPO level focus on adoption of sustainable practices—such as irrigation, climate smart and good agriculture practices, product traceability—and post-harvest practices that increase quality and prevent loss.

In India the Walmart Foundation funded the Tata-Cornell Institute for Agriculture and Nutrition (TCI) launch of a Farmer Producer Organization Hub as part of its Center of Excellence. The Hub aims to create lessons, tools, and resource pathways to strengthen small farm aggregators while simultaneously catalyzing a community of practice of funders, implementors, and policy stakeholders. It serves as a repository of learnings, information, and knowledge for the advancement of FPOs in India. An integral part of the FPO Hub is TCI’s Database for Indian FPOs. The database brings together information on thousands of FPOs to facilitate research on small-farm aggregation models. Through the interactive, web-based dashboard, researchers can access a wealth of data, such as crops produced, founding years, and sponsoring agencies.

To further support the role of women in smallholder farming, in March 2021 the Walmart Foundation published Seeding advancement of women in smallholder farming: insights from the Market Access portfolio, a three-year retrospective on its gender programming, highlighting lessons learned from its Market Access portfolio. We found that the following actions are most successful in accelerating female farmers’ economic prosperity: increasing women’s membership and leadership in FPOs, building women’s skills and capacity in farm production systems, supporting women’s inclusive crop and marketing programs and increasing women’s access to finance. Also, in 2020, Walmart.org published a series of farmer stories to create increased transparency of the programs and benefits derived by smallholder farmer participants.

In addition, the Walmart Foundation has made the following investments to empower women in smallholder farming:

• PRADAN’s Livelihood Enhancement through Market Access and Women Empowerment (LEAP) Program – LEAP impacts the lives and livelihoods of 45,000 women smallholder farmers in India. PRADAN supports women farmers to leverage their collective power to form farmer producer companies (FPCs). The Foundation supported LEAP project worked with the Nari Shakti FPC in strengthening its capacity to gainfully engage with the market and provide necessary support to its members. Currently, the FPC has 350 women farmers as shareholders and decided to farm millets in the food crop category; chilly, ginger and beans in the cash crop category; and backyard poultry and goat in the livestock category.
• Root Capital Gender Lens Investing (GLI) - Access to capital is critical to the success of women-led businesses. To overcome some of the operational cost and risk barriers associated with reaching early-stage, gender-inclusive and women-led businesses the Walmart Foundation supported a new initiative by Root Capital to strengthen gender lens investing throughout the agriculture sector. Launched in July 2021, Root Capital’s new GLI initiative will use an innovative financing approach to provide much-needed credit to gender-inclusive and women-led businesses in Central America and Mexico. Root Capital expects this support to enable it to disburse an additional $25 million of investor capital to these businesses, filling a critical financing need that will stand to benefit more than 12,000 farmers and employees.

Learn more about the smallholder farmers and entrepreneurs programs at Walmart.org.

• Systematic societal disparities along racial, gender, religious and other lines can inhibit the development of a diverse supplier ecosystem, despite the best efforts of Walmart and others to enhance supplier inclusion.
• A lack of effective public policy solutions to meaningfully advance racial equity in societal systems hinders progress. 
• Walmart’s size and scale can create challenges for qualified small, diverse and local suppliers. 
• It can be difficult to identify the biggest barriers to becoming a supplier to a large enterprise like Walmart and to create effective programs to help potential suppliers overcome those barriers.
• Small suppliers may have difficulty engaging at the level necessary to build adequate capacity to supply Walmart or other large enterprises at scale. 

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