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Recently, the Environmental Working Group stated that celery is one of the so-called "Dirty Dozen," the twelve most contaminated fruits and vegetables on the market. As I was chewing on a piece of celery at the time, I began to notice the bitter overtones of what I assumed was a nasty chemical fertilizer. I began to wonder if it might be sarin or perhaps some dioxin derivative. Completely unable to enjoy my snack any longer, I resolved to find some organic celery.

After a long and fruitless (vegetable-less?) search, I finally broke down and decided to go to Whole Foods (NASDAQ: WFMI) . There, tucked into an extensive and impressive collection of colorful veggies, I found what I was looking for: fresh, organic celery. The price? $4.99.

To be honest, if I'm paying $4.99 for a vegetable, I expect it to pick my daughter up from daycare and maybe help out with the rent. I'm used to paying between $1 and $1.25 for a bunch of celery, which made Whole Foods' prices seem like a particularly tasteless joke. However, rather than throw the celery to the ground and loudly denounce Whole Foods as a bunch of money-grubbing ripoff artists, I politely returned the bunch to the counter and left.

There were two reasons for my restrained response: first, I'm saving up my first arrest for something special, like picketing Anne Coulter's funeral, and there's no way I'm getting carted off for yelling at a bunch of celery opportunists. The second reason is that I wasn't really all that surprised. You see, I've gotten used to Whole Foods' massively inflated prices and somewhat snotty attitude.

Antitrust is always tough to predict. The laws are sketchy -- and markets can change quickly. Besides, politics can play a big role.

That's why the Federal Trade Commission (FTC)'s antitrust lawsuit -- on the Whole Foods Market (NASDAQ: WFMI) and Wild Oats Markets (NASDAQ: OATS) linkup -- is so interesting.

The FTC believes that the transaction will reduce competition and, as a result, be harmful to consumers.

However, federal Judge Paul Friedman doesn't think so. In fact, yesterday we got his 93-page opinion on the matter (according to a report in Reuters).

I'm not an expert on organic food, but this seems sort of weak: "The Department of Agriculture, the final arbiter of all things organic, is poised to approve a list of non-organic ingredients that can be used in food stamped with its green-and-white organic seal."

Correct me if I'm wrong, but isn't the whole point of organic food that the ingredients are organic? The organic advisory board recommended that 38 non-organic ingredients be added to a list of substances allowed in organic foods. Some complain that, while this may not be a significant event by itself, it's indicative of efforts by big businesses to water down the definition of organic to increase profits.

The industry and regulators must walk a tight line. Making minimal adjustments that don't change the meaning of organic substantially could make products more affordable for more Americans. That's good for everyone -- farmers, retailers, and consumers.

On the other hand, changing it to the point where organic no longer means anything (sort of like "homemade," which means nothing) would kill the industry.

Assuming the changes are made with little public outcry, it could be good for companies like Whole Foods Market, Inc. (NASDAQ: WFMI), which could see a decrease in its cost of goods. Passing the savings onto the consumer would result in more organic shoppers. As of right now, many Americans really can't afford to shop organic. Lowering prices could change that.

I've been in love with natural foods grocers since I was a little girl, when Fred Meyer opened a little mini-store dedicated to raw peanut butter, tofu, wheat germ and a dozen different kinds of bulk grains. The store had candy bars made out of honey and I loved it. Since then, my understanding for and appreciation of the natural grocer has grown up with the industry; from the cute little small-town co-op where I shopped in college, to the Fresh Fields (acquired, and already assimilated by, Whole Foods Market, Inc. (NASDAQ:WFMI)) I fell in love with in Philadelphia during business school, to the discovery of the Portland, Oregon New Seasons chain when I moved "back home" in 2001. I noshed at every quick-service franchise that jumped on the healthy foods wagon, from spirulina-spiked smoothies to bagels loaded with sprouts and hummus.

Natural and organic grocers always seemed like the nice (if a bit militant) guys, interested in supporting the local farmer, providing non-toxic food and diapers for our babies, striving to make sure our bodies were healthy and our baths were perfumed with chamomile and lavendar. And then 2005 happened.

Suddenly Wal-Mart Stores, Inc (NYSE:WMT) was in the organic grocery game. Safeway Inc. (NYSE:SWY) started its own line of "O" organic foods. Johnson & Johnson (NYSE:JNJ) created a line of herbal-infused babycare products and Kellogg Company (NYSE:K) launched organic Rice Krispies and Corn Flakes. Big business had figured it out and suddenly it wasn't smelling much like chamomile and patchouli. No. It smelled more like war.

With the news yesterday that Whole Foods was set to acquire Wild Oats Markets (NYSE:OATS), the war seems ever more bitter.

Whole Foods Market (NASDAQ:WFMI) announced on Wednesday February 21, 2007, that it intends to purchase rival organic and natural food supermarket Wild Oats -- based in Boulder, Colorado. The entire transcript of the announcement is available at the company's website (www.wholefoodsmarket.com).

Agreed, the natural and organic foods market is growing as more and more people become concerned about the harmful chemicals and lack of inspection mechanisms in our food chain. Also agreed, that Whole Foods is currently enjoying an increase in both sales and revenue. According to information released by the company as part of its 1Q 2007 earnings report, sales increased 12% to $1.9 billion. Whole Foods currently has 174 stores, the vast majority in the U.S. Average weekly store sales were up 6% to $620,000. Average number of weekly transactions increased 5% to 3.2 million. The average ticket size was up 2% to $34.43. For a full rundown on the facts and figures see the 1Q 2007 press release.

Given all the good financial news plus Whole Foods' intention to purchase Wild Oats for $565 million, investors pushed the stock up on Thursday February 22, 2007, 13.2%. Shares closed up $6.04 at $51.74. Enjoy that brief ride. S&P put Whole Foods on credit watch and may adjust the company's BBB-debt rating even lower to below investment quality unless Whole Foods can finance the purchase of Wild Oats without taking on $106 million in additional debt.

I'm a libraphile (is that the word?) and I began filling my children's shelves with books years before I had even purchased my first pregnancy test. By far my favorite image in any book is the overleaf of Blueberries for Sal, a bucolic and all-blue illustration of Sal and her mother. They are canning blueberries in a 40s-era kitchen, complete with hand-cranked egg beater, polka-dot curtains, and a cast-iron wood cooking stove. Every time I gaze at that picture I believe for a second that I will go downstairs and preserve something in one of the old-fashioned Ball jars I found at a garage sale.

Alas, it never quite happens that way, but just reading the book makes me feel connected to the farm-wife ideal. Much like a wander through today's grocery store aisles. As Kim Severson mentions in today's New York Times, she feels smug when she puts a bag of Cascadian Farm organic French fries in her grocery cart (she calls is "greenwashing" and the marketers call it "an authentic narrative"): "a gentle image of a field or a farm ... suggest[s] an ample harvest gathered by an honest, hard-working family." And in creating these images for us, in selling us the hard-working farm family, marketers know that just for a minute we've left our wired, fossil-fuel-guzzling lives for a hand-hewn pine kitchen table in that log house in Maine.

In short, we're being sold our ideal lifestyle in a box, bag or can.

I've written on the topic of Wal-Mart's entry into the offering of organic foods and produce before. Some people think that Wal-Mart's scale alone will diminish the quality and status of the organic foods marketplace, and others think that the entry of healthy organic foods into Wal-Mart stores will transform obesity in the U.S. to a thing of the past, more or less. Whatever your opinion, make no mistake: organics are coming to Wal-Mart and other bix-box stores like Costco in increasing numbers.

But, with the sheer quantity needed to supply all these Wal-Mart stores, organic produce and food suppliers are going to have to transform the entire industry to take on this new super-challenge. You have more fields, you invest in three to four times as much property -- which in organic produce-producing California is not cheap -- and these organic foods suppliers suddenly are "betting the farm" on the long-term sustainability of Wal-Mart carrying and growing the organic segment for a long time.

What if this does not happen? What if customers choose not to embrace organic, healthy eating in droves like Wal-Mart expects so that it can grow revenue and recruit a new customer base? An entire industry could plummet rather quickly. Generally, any good business plan has a disciplined growth strategy that includes multiple backup scenarios and redundancies to prevent something like this from happening.

It's another example of the power Wal-Mart has -- and yes, it's nearly bankrupted companies like Rubbermaid before who gave too much of their business to the retailer. Will the organic industry befall the same fate? Let's hope not, but as an industry, the plan needs to start, well, yesterday.

Well, this week brought generally the same movement of WMT stock that's been seen for quite a while. In other words, as the Wal-Mart annual shareholder meeting and several growth-related announcements apparently wore off, WMT shares closed this past Friday at $47.13 ($0.17, or 0.36%), down just a little from Thursday's close.

With an apparent Supercenter victory this past week along with a blatant rejection (everything's tentative, of course), the big story from many people's point of view (including mine) was Wal-Mart's forthcoming full-on entry into the organic foods market as it needs to in order to grow sales to customers who increasingly are looking for non-processed and healthier food offerings.

The only potential trouble with this is that as Wal-Mart increases is buying power into the rather-small (comparatively) organic foods market, can this be harmful to 1) the organic industry (how will they keep up with a possible exponential increase in demand) and to 2) the organic customer, who now enjoys a rather expensive but much more healthier food selection at smaller food stores (and some big chains like Whole Foods). Stay tuned to wmt. bloggingstocks.com, as there is quite a bit more to come in this arena.

The time-tested rule of thumb always comes to pass in the business world -- the selective niches some customer segments have high prices (which niche customers will pay), high demand and lower overall supply. This happens in consumer electronics (think of Bang & Olufsen), cars (Mercedes comes to mind), and now, organic foods at the supermarket.

Organic foods are made mostly by smaller companies that take pride in producing fresh and semi-processed foods that the health-conscious consumer will be willing to pay extra for. Until recently, you wouldn't see much (if any) selection of organic foods in major supermarket chains like Publix, Wal-Mart and Kroger. But the tide is changing -- customer demand is making these supermarket giants take a look at offering all kinds of organic products.

There is a universal issue here, however: Can these smaller manufacturers keep the organic quality they now have while increasing production to huge levels to satisfy potential demand from large, national chains?

The existing organic consumer probably most likely definitely does not want organic to go mainstream. When mass production takes hold, quantity rules supreme over quality -- there is not a case history in business where this is not true in my opinion.

So, if customer demand is driving Wal-Mart to start offering of organic products, where does that leave the existing organic customer? With the "certified organic" label meaning process certified (not "product" certified), the organic moniker may become diluted to a point where it's somewhat meaningless -- especially as large chains go nuts offering these products to grow customer bases. While Wal-Mart definitely has a piece of its growth plan tied up in offering new products, the informed organic consumer may need to pay more attention shortly.

Organics are in the news. Over the weekend, consumers were paying attention to whether major organic milk producers are really honoring the spirit of organic foods, and last week, media outlets were buzzing about how just about every mainstream grocery store is launching its own organic foods line, from Safeway to SuperValu. Organics are getting cheaper, and the move by huge retailers to expand organic offerings may mean that the demand for pesticide-free goods will change the way farmers in the U.S., and elsewhere, operate.

Nowhere is the presence of organic products more incongruous than on Wal-Mart shelves. Wal-Mart is doubling the amount of organic produce in its grocery shelves for its shoppers "convenience" (and, one would imagine, to allow the retailer the ability to charge more -- and pocket higher margins as a result). The chain is also offering organic cotton clothing and organic baby formula. And while a few customers are surely happy, it seems, the larger response is... oh, no.

I feel your pain, oh ye people who are committed to organics. And I have to ask: is Wal-Mart, by trying to do good, actually doing bad?

Organic baby food tops the list of organic food additions recently seen at Wal-Mart, the "low price" leader. Customer demand for many organic foodstuffs, including produce selections and packaged foods, has grown recently and it's great to see Wal-Mart respond to this request, although organic foods are anything but "low price". Low price is generally reserved for processed-food, nutritionally-deplete wares from Kraft, ConAgra, P&G and other large food manufacturers.

Will Wal-Mart grow it's organic selection enough to break into the frontiers of organic store pioneers such as Whole Foods and Trader Joes? Unlikely - but their recent additions are a good start.