Kroger joins rival grocers in rejecting pink slime beef 2 and 3 grocers also rejected the product. Wal-Mart Stores Inc, the largest U.S. retail seller of food, stopped short of banning the product, which the meat industry calls lean finely textured beef, but said its fresh ground beef in trays would no longer contain the product. "We are still paying very close attention to this, listening to our customer feedback and we haven't ruled out making some additional changes," said Walmart spokeswoman Deisha Barnett. Bi-Lo and Winn-Dixie supermarket chains in the southeastern U.S., which are part of a holding company that is the No. 9 U.S. supermarket chain, said they too would no longer purchase fresh ground beef that contains finely textured beef. The announcements on Thursday were another setback for the U.S. meat industry, which is reeling from a wave of consumer revulsion over so-called "pink slime." While the U.S. Agriculture Department has said the product is safe, food safety activists have used a savvy Internet and media campaign to raise consumer doubts. Finely textured beef is made from beef trimmings, which are the leftover bits of meat when a carcass is cut into steaks, roasts and other products. The trimmings are heated to soften fat and spun in a centrifuge to separate the meat, which is then pressed and added to hamburger. A puff of an ammonia and water mix is used to kill bacteria. The announcement on Thursday from No. 1 supermarket chain Kroger followed similar statements a day earlier from Safeway Inc and Supervalu Inc that they would stop buying the product. "Our customers have expressed their concerns that the use of lean finely textured beef ... is something they do not want in their ground beef, " Kroger said in a statement. While giant retailer Walmart has not completely banned the product, it said meat and customer service department employees will be able to tell customers which meat contains the product. But the meat at Walmart will not be labeled that it contains textured beef, the company said. McDonald's Corp last August was the first major beef buyer to stop using hamburger containing finely textured beef, after activists including celebrity chef Jamie Oliver drew attention to it. Internet news source The Daily reported recently that 7 million pounds of the product would appear in school lunches this spring, prompting an outcry from consumers. The USDA last week announced it was allowing school districts to opt out of using the textured beef starting next school year, which set off a chain reaction among grocers. The meat industry says finely textured beef is at least 95 percent lean meat. U.S. beef packers produce about 800 million pounds of it every year, according to the American Meat Institute, an industry group. The top producers are South Dakota's Beef Products Inc, and Cargill Inc. Reporting By Ian Simpson and David Bailey; Editing by Greg McCune