Now Hear This: Wal-Mart Wants More US-Made Products

In 2013 Wal-Mart made headlines when it announced a plan to buy an additional $250 billion of US-made goods over the following 10 years, in an effort to boost US manufacturing and job creation. The announcement by the retail giant -- criticized for years for buying low-cost, low-quality goods from China to sell in its stores -- coincided with growing interest in the reshoring of US manufacturing that was lost to the Far East.

Wal-Mart rolled out a high-profile public campaign in support of the plan. It included TV ads fronted by all-American pitchman Mike Rowe. The plan featured a Made in the USA Open Call at the company's headquarters in Bentonville, Ark., in 2014 for American manufacturers and suppliers of finished goods, intermediate goods, and raw materials to meet with Wal-Mart’s buyers, in a recruitment effort to rebuild the retailer’s US supply chain. The company also held its first Manufacturing Summit in Denver for industry discussions and meetings.

Hopeful manufacturers and their reps await their meeting appointments with Wal-Mart buyers at the retailer’s first Made in the USA Open Call last year.
(Source: Wal-Mart)

The first event reportedly brokered hundreds of deals for US companies to get onto the retailer’s shelves. Wal-Mart will hold its second Made in the USA Open Call July 7-8, in Bentonville. The event will be a repeat effort by the world’s biggest seller of consumer goods to increase the amount of US-made products it sells in Wal-Mart stores, in Sam’s Club members-only wholesale outlets, and on walmart.com.

The program presents another opportunity for US manufacturers, suppliers, and companies to meet with Wal-Mart buyers and pitch their products.

Cindi Marsiglio, Wal-Mart’s vice president of US manufacturing and sourcing, said the first Open Call last year drew more than 500 manufacturers and other suppliers from 46 states which took part in 800 meetings with 175 buyers. “Some buyers decided in the meetings to buy products; others followed up with manufacturers soon after,” she noted.

Wal-Mart buyers and prospective suppliers meet to discuss products and manufacturing at the retailer’s first Made in the USA Open Call last year.
(Source: Wal-Mart)

Wal-Mart wants “innovative products that will be a delight to customers,” Marsiglio said. The criteria for acceptance are straightforward. Products must have consumer appeal, be shelf-ready, and, of course, be made in the US.

The program allows current suppliers to participate as well as prospective vendors. Wal-Mart has eschewed size requirements for suppliers -- based on a company’s product appeal and manufacturing capabilities, it could buy goods for just one or a few stores, for regional sales, for Internet sales, or for national or even international distribution.

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While many of the products Wal-Mart bought in 2014 were simple items -- one of last year’s biggest success stories was a specially designed taco plate -- Marsiglio said more sophisticated products, including electronic devices, are welcome.

The payoff for companies that place products with Wal-Mart’s buyers could be enormous. Wal-Mart has more than 5,100 retail facilities in the US. In fiscal 2015 (ended Jan. 31), combined US net sales in Wal-Mart stores and Sam’s Club outlets exceeded $288 billion. The company also operates 6,301 stores in 27 countries. Total net sales in fiscal 2015 were $482.2 billion, a 1.9% increase from the previous year.

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The company has backed up the talk around its buy-US efforts. It started the Wal-Mart US Manufacturing Innovation Fund and awarded $4 million last year to seven R&D institutions working on advanced manufacturing of textiles and injection molding technology. One of the grant recipients, the University of Texas at Arlington, is developing a manufacturing system that will autonomously prepare small motor sub-systems and assemble motor components.

Wal-Mart has promised $10 million in R&D grants over five years, and the company’s plan to increase sourcing of US goods from domestic manufacturers runs through January 2023 -- which it reaffirmed at the National Retail Federation’s annual BIG Show in New York City this past January. Two-thirds of what the retailer now spends for products to sell in its US stores are reportedly made, sourced, or assembled in America.

Applications for next year’s Open Call will soon be available online at the Wal-Mart corporate website.

Pat Toensmeier has more than 30 years of experience writing for business-to-business publications. His main areas of coverage have been defense, design, manufacturing, technology and chemicals, especially plastics and composites. He has reported extensively on developments in these areas from the U.S. and Europe, and covered industry events as well in Brazil and Asia. Toensmeier has held various positions at major publishers such as the McGraw-Hill Companies and Hearst Corporation. A graduate of the University of Missouri, he is a contributing editor for several print and online publications. Toensmeier is based in suburban New Haven, Conn.