Walmart’s 10th annual American manufacturing extravaganza draws lower numbers of entrepreneurs and cuts fewer deals than last year, when 1,100 trekked to Bentonville.
For the past ten years, Walmart
WMT
A total of 180 products got a deal to sell at Walmart or Sam’s Club this year, a 45% decline compared with last year when more than 330 products got an immediate yes.
“As we’ve done this ten times, our vetting continues to get better,” Jason Fremstad, Walmart’s senior vice president of supplier development and sourcing, told Forbes as its two-day Open Call wrapped up on Wednesday. The improved vetting ensures fewer pitches at the Open Call, he said, but the retailing behemoth has increasingly focused on making sure that suppliers don’t land a deal they can’t handle. “We want to make sure,” he said, “that these suppliers are ready to sell to Walmart.”
Because of Walmart’s size, with $611 billion in revenue for fiscal 2023, which ended January 27, and more than 5,200 Walmart and Sam’s Club stores spread across the U.S., the Open Call represents something of a lottery ticket for small- and mid-sized American manufacturers. Beyond the celebrations, though, is serious dealmaking. Walmart’s buyers hold 30-minute discussions with each would-be vendor in small rooms, driving hard bargains on price and often offering local or regional deals as a test. Its buyers have also been known to pair companies together, or to put together deals beyond what the entrepreneurs have pitched. Even those who get a no are invited to list their goods on Walmart’s online marketplace, which can be a training ground for a possible in-store deal.
Walmart’s size also makes it tough for newbie suppliers to not just get on the shelves, but to stay there. At this year’s Open Call, TV’s Dirty Jobs creator Mike Rowe spoke about landing a deal with Walmart for his cleaning products, then having them pulled off the shelves quickly when he couldn’t get the distribution right.
“When you sign up for too much and you’re not able to service the distribution, things can go wrong,” Fremstad said.
In 2014, Walmart held its first Open Call after pledging $250 billion over te years to increase U.S. manufacturing. In March 2021, it doubled down and promised an additional $350 billion investment by 2030 to support what it said will be more than 750,000 new American jobs.
Among the companies that made the cut this year are Brilliant You Denim, which makes women’s jeans at its North Carolina factory, and the Ugly Company, which makes dried fruit from the ugly fruit that farmers can’t sell.
Walmart has said that nearly two-thirds of its annual spending goes to products that are “made, grown or assembled” in the U.S. Among them: Patti LaBelle-branded sweet potato pies and other desserts, a relationship that now accounts for $85 million in revenue, and mass-market bike manufacturer Kent International, which set up a factory in South Carolina to produce its BCA brand bikes after Walmart pushed its “buy American” campaign.
While this year’s numbers are lower than last, they’re still higher than six years ago when Forbes traveled to Bentonville to watch the pitches. That year, people representing more than 500 companies and 750 products traveled to Bentonville to get a hearing with a buyer, and nearly 100 of them got an immediate yes.
Walmart has said that it expects this year’s total sales to increase 2.5% to 3%, with Walmart U.S. sales growing slower and international and Sam’s Club increasing more quickly.
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