Wal-Mart to phase out Organic Food brand Wild Oats

Wal-Mart Stores Inc. is phasing out its Wild Oats organic food brand, according to people familiar with the matter, dropping a line of products introduced two years ago to bring inexpensive organics to the masses.

The world’s largest retailer has unwound a complicated deal with private-equity firm Yucaipa Cos. that allowed it to sell Wild Oats pasta sauces, cereals and other shelf stable products, the people said. The products will disappear from Wal-Mart shelves in coming months, they added.

Two years ago, Wal-Mart turned to Yucaipa as a faster way to get more organic products on shelves as competitors like Kroger Co. and Costco Wholesale Corp. reported skyrocketing sales of their own natural and organic store brands. Yucaipa, which is run by billionaire Ron Burkle, bought the Wild Oats brand after the grocery chain was sold to rival Whole Foods Market Inc.

Now Wal-Mart is switching tactics, hoping to add organic products to shelves in other ways, including selling more fresh produce and going it alone by adding more organic food to its existing store brand, Great Value, these people say.