Wal-Mart Stores Inc. has joined eight other companies in launching a five-year initiative intended to increase the visibility of female-owned businesses.
The plan was announced during Wal-Mart's Women's Economic Empowerment Summit in Washington, D.C., on Wednesday and is being supported by the Women's Business Enterprise National Council, which is the largest third-party certifier of businesses owned, controlled and operated by women in the U.S. The companies involved have agreed to track and report their sourcing efforts from self-identified and certified female-owned businesses over the next five years.
In addition to Wal-Mart, Procter & Gamble Co., Coca-Cola Co., PepsiCo Inc., Exxon Mobil Corp., General Mills Inc., Campbell Soup Co., Johnson & Johnson and Mondelez International Inc. are participating in the collaborative program. Pamela Prince-Eason, chief executive officer of the women's council, believes the collaboration will make a difference for female-owned suppliers as the large companies "challenge each other."
"These companies have great power in the marketplace," Prince-Eason said. "They all bring great products to consumers. They're all the company of choice that women-owned businesses want to do business with and, really, any [business] wants to do business with. So there's value in coming together and really talking about the commitment."
The nine companies will disclose to the women's council their annual spending on products from female-owned businesses over the next five years. The women's council will collect the information and report the aggregate spending each year.
The practice is nothing new for Wal-Mart, serving as an extension of the retailer's five-year, global women's economic empowerment program announced in September 2011. The initiative established goals intended to help empower women through sourcing, training and supporting diversity and inclusion.
One of the objectives was to stock Wal-Mart shelves with $20 billion in products from female-owned suppliers for its U.S. business, and Wal-Mart revealed Wednesday it had reached the mark.
Kathleen McLaughlin, chief sustainability officer and president of the Walmart Foundation, said the company sourced about $21.5 billion in products from businesses owned by women over that time.
"We want to move now from something we've been doing more on our own to try to foster more of a movement," McLaughlin said. "So we thought it would be helpful to essentially recruit a bunch of other companies and get them to also be more public, work together to continue sourcing from women-owned businesses and report the total across all the companies to create a more visible sign of commitment from private sector organizations."
According to the 2016 State of Women-Owned Businesses Report, which was commissioned by American Express, more than 11.3 million U.S. businesses are owned by women. Those businesses employ nearly 9 million people and generate over $1.6 trillion in revenues.
The survey also said that between 2007 and 2016 the number of female-owned firms increased by 45 percent, compared with a 9 percent increase in the number of all businesses. Women are now the majority owners of 38 percent of U.S. businesses, up from 29 percent in 2007.
Sarah Frey, the chief executive officer of Illinois-based Frey Farms, believes the new collaboration can continue to increase opportunities for female-owned businesses.
Frey's company began with a local farm in Illinois and has been a Wal-Mart supplier for more than 20 years. Frey Farms has grown into a national supplier with operations in Arkansas, Florida, Georgia, Indiana, Missouri and West Virginia.
"It's important we're tracking and reporting those numbers," Frey said. "If you're a female-owned company and you're kind of standing on the sideline and have a product or a service you can provide to one of these companies, maybe understanding this information and knowing it's going to be out there a little more gives you the courage to call on one of these large corporations."
In 2014, Wal-Mart promoted women's ownership of businesses by helping fund the creation of the "Women-Owned" logo. The logo can be used by any female-owned supplier certified by the Women's Business Enterprise National Council and WEConnect International, a network that connects women's businesses to qualified buyers around the world.
Wal-Mart has 1,500 suppliers that identify as female-owned businesses, including Frey Farms. Frey credited Wal-Mart for its previous five-year initiative as well as the new program intended to further increase visibility.
"It takes courage for any company, regardless of your size, to come out and say 'we have a goal, and our goal is $20 billion,'" Frye said. "I remember hearing that [five years ago] and that's the first thing that came to my mind. Wal-Mart is the leader in this, and they just basically doubled down on their commitment by bringing all these other companies."
While Wal-Mart will continue revealing its annual spending on products from women's businesses, companies won't be required to share their data publicly as part of the initiative.
The collaboration also isn't limited to the nine companies, according to McLaughlin. She hopes the announcement will lead others to participate, and Prince-Eason said she began hearing from interested companies Wednesday.
"Some suppliers to Wal-Mart who are here and are large companies on their own, they stepped forward to say 'we want to be a part of this,'" Prince-Eason said. "The leadership Wal-Mart is taking to draw attention to this is already yielding something."
Business on 03/30/2017