Wal-Mart pledges $2 billion to fight hunger

NEW YORK (CNNMoney.com) -- Wal-Mart and its charitable foundation will commit $2 billion to help fight hunger in the United States, the company said Wednesday.

Under the new initiative, called "Fighting Hunger Together," the world's largest retail chain will donate more than 1.1 billion pounds of food, valued at $1.75 billion, and will provide cash grants totaling $250 million to support hunger relief organizations.

Wal-Mart said the five-year program is in response to a growing hunger problem. The U.S. Department of Agriculture said last year that 17 million households, or nearly 15% of all U.S. families, lacked access to an adequate supply of nutritious food in 2008, which was the highest level since 1995.

The cash and in-kind gifts of fresh produce, meat, dairy and other foods will provide more than 1 billion meals to needy families, according to Wal-Mart estimates.

"Increasingly, we see opportunities to use our scale and reach to solve challenges in our communities," Wal-Mart's vice chairman, Eduardo Castro-Wright, said in a statement. "This is one of those times."

In addition, Wal-Mart (WMT, Fortune 500) will make some of its employees, such as its logistics team, available to help food banks become more efficient. The company also pledged to collaborate more with government agencies, food manufacturers and other companies that are working to address growing hunger rates.

"Solving the problem of hunger in America will require help from partners at all levels -- government, nonprofit organizations and the private sector -- acting together," said Kevin Concannon, USDA undersecretary for food, nutrition, and Consumer Services.

As part of the new initiative, Wal-Mart said it will grant $8 million to help bolster the nation's food banks. It will also donate $10 million to help provide children with healthy meals during the school year and summer months.

"No one should go hungry and we thank Wal-Mart for supporting our mission for a hunger-free America," said Vicki Escarra, president of Feeding America, which operates a nationwide network of more than 200 food banks.

In a conference call with reporters, Escarra said hunger is no longer a problem that impacts only low-income families, with a growing number of middle-class households now utilizing food banks.

She also said the traditional "business model" for food banks has changed. "We're moving from cans on the shelf to fresher items that low income families can't afford."

Of the food Wal-Mart has donated so far this year, about 28% was fresh produce and roughly 25% was meat, fish or dairy items, the company said.

Wal-Mart said it will encourage its 1.4 million employees find ways to support food banks, senior meal delivery programs and other hunger relief organizations. The company will announce details on how customers can contribute later this summer.

Through its charity, the Wal-Mart Foundation, the giant retailer gave more than $512 million in "cash and in-kind gifts" in 2009. These donations funded education, workforce development, environmental sustainability and other initiatives mostly in the United States.

"As the largest grocer in the country, we need to be a leader in the solution to this problem," said Margaret McKenna, president of the Wal-Mart Foundation.

McKenna said the foundation may combine its efforts to fight hunger with some of its other initiatives, such as retrofitting food banks to be more energy efficient.

"We will continue our commitments in other areas," she said, adding that "some of the orientation will be turned towards hunger."

In the public eye, Wal-Mart's good works stand counter to the criticism it's recently endured about how it handles labor relations. In April, a federal court of appeals certified the largest gender discrimination class action lawsuit in U.S. history. The lawsuit, brought by more than 1 million female Wal-Mart employees, accuses Wal-Mart of paying women less than men and promoting fewer women into management positions.