Dive Brief:

• Walmart announced Wednesday it will open a milk processing facility in Valdosta, Georgia, in 2025. 
• The dairy facility will create almost 400 new jobs and marks a $350 million investment in Lowndes County, where the facility will be located, per a press release from Georgia Governor Brian Kemp.
• The newly announced facility builds on Walmart’s efforts to own more of its fresh food supply chain. 

Dive Insight:

The Walmart-owned and operated milk facility aims to bolster the retailer’s capacity to meet the demand for high-quality milk and to build more transparency around sourcing, two Walmart vice executives said in a blog post.

It will be located on Inner Perimeter Road, per the Georgia governor’s press release.

The facility, which is slated to break ground later this year, will use ingredients sourced from local farmers, wrote Bruce Heckman, vice president of manufacturing, private brands, and Tyler Lehr, senior vice president of merchandising, chilled, adult beverage and convenience, in the blog post.

The new facility will process and bottle whole, 2%, 1%, skim and 1% chocolate milk in sizes such as gallon and half gallon for Walmart’s Great Value and Sam’s Club’s Member’s Mark brands. These products from the facility will be sold at more than 750 Walmart stores and Sam’s Clubs in the Southeast.

“Once opened, our milk processing facility in Valdosta, Georgia will be an important milestone to delivering on our commitment to provide customers access to the high-quality milk they expect at the Every Day Low Prices they rely on,” Lehr and Heckman said in the post.

The Valdosta milk facility is the latest move by Walmart to control more of its food supply chain. In 2018, the retailer opened its first milk processing facility in Fort Wayne, Indiana.

The retailer is currently building its first owned and operated case-ready beef facility in Olathe, Kansas. In early 2020, Walmart opened its first facility to support its beef supply chain in Thomasville, Georgia. That Georgia facility is operated by beef production company FLP Foods.

Walmart noted in the blog post that it also made equity investments and long-term commercial agreements with rancher-owned Sustainable Beef LLC and vertical farming company Plenty. 

Walmart has continued to steadily gain market share in grocery. For its second-quarter results, Walmart U.S. recorded “strong” market share gains in grocery with that category helping to lead its 6.4% comparable-store sales growth for the quarter. 

Other retailers and grocers are also bringing their private label production in-house to have more control over their supply chains. Costco, for example, has been beefing up its control of meat processing with company-owned facilities. Albertsons operated 19 food production plants as of late February — including seven milk plants, three soft drink bottling plants, three bakery plants, two ice cream facilities, two grocery and prepared food plants, one ice plant and one soup plant, per a 10-K filing with the Securities and Exchange Commission.