Whole Foods Market: a giant among organic marketers

In September 2010, Whole Foods Market celebrated its 30th anniversary. Since it was founded in 1980 in Austin/Texas, the company has opened about 300 stores in the USA, Canada and Britain, absorbed several competitors and has become one of the biggest marketers of organic food worldwide. WFM stores offer a combination of organic, wholefood in keeping with the American definition (all natural), and conventional products, and thus appeals to increasing numbers of normal consumers. It’s this combination of product types that brings success and, with its product range, the generous size of its outlets and the ambience, the company is obviously tapping into the zeitgeist. Without doubt, the company’s communication strategy has also helped WFM to achieve cult status. After a rather weak year in 2008/09, they now expect to start expanding again. (Picture: Whole Foods Market offers a wide range of fresh produce)

Ambience, product selection and giving customers the choice between various alternatives (organic, natural, locally grown and conventional) seems to be one formula for success. For some years, the company slogan “Whole Foods, Whole People, Whole Planet” tended to address a small group of idealists in a niche, but then this target group became responsible for high growth rates in the 80s and 90s. In an age of debate about climate change and sustainability, the company philosophy has acquired new relevance. Now shopping at Whole Foods is the right thing to do. (Picture: The customer has choice: locally grown, conventional or organic)




The magazine Health has declared WFM to be “America’s healthiest grocery shop”. Whole Foods creates its profile with the greatest possible freshness, products that don’t contain artificial colourings and preservatives, and with fish from sustainable fishing. The proportion of organics varies from store to store, but compared with the old days it has grown significantly. The manager of the fruit and vegetable department in a store in San Francisco explains that the ratio of 20 % organic and 80 % conventional has today been reversed. He reports that both demand and availability have increased. Instead of this the Organic Consumers Association (OCA) says that 2/ 3 of WFM´s sales come from natural foods which is not organic certified and 
possibly contain GMO.
(Picture: “Health starts here” – one of the slogans of Whole Foods Market)

The mission of the company has been sustained over three decades: in exemplary fashion, it has been working for the satisfaction and wellbeing of customers, while at the same time focussing on the welfare of the company employees and supporting social issues (e.g. Whole Planet Foundation). WFM’s huge workforce (currently 57,000, of whom 80 % are full-time) has for more than a decade helped the company to be placed every year among the “100 best companies to work for”, a ranking carried out by Fortune magazine. Emphasising environmental protection – its Green Mission and regionality – programmes to finance farmers and regionality are welcomed by consumers and farmers alike. In all of this, the company doesn’t forget they have to earn money: shareholder value is there in the company statutes. (Picture: A common sight: 13 checkouts in the store in 5th Avenue, San Francisco)

The company, that is quoted on the stock exchange, has for many years been developing strongly. Between the financial years 2008 and 2010, the number of stores rose from 275 to around 300, and turnover increased from 8 to 9 billion dollars. The publication Lebensmittelzeitung has calculated that profit in 2010 is roughly 100 times higher than in 1992. Nevertheless, the eco-entrepreneurs in Texas have had to cope with a number of setbacks since 2007: it began with the purchase of their competitor Wild Oats (413 million euros) in the USA that resulted in a protracted conflict with the monopolies regulator. On occasions, the shares lost 85 % of their value, which made it easy for investment and private equity firms to increase their stake in the company to 17 %. (Picture: Wholefoods Market in Berkeley – open for customers from 8.00 – 22.00)

Not only the takeover of Wild Oats and the poor state of the economy but also expansion into Europe caused financial losses. The flagship store, that was opened in 2007 in London with 7,000 m² of retail area (see our earlier report), was far from successful. In 2009, the prestige store had a turnover of 50 million euros, but its losses amounted to around 32 million euros. The company changed its strategy in Britain in 2010 (see our earlier report). Whole Foods is currently looking for new premises with between 1,880 and 2,800 m² of retail space in big cities in Britain. Evidently, both retail space and pack size have to adjusted downwards, and the issue of regionality is also on the agenda. WFM currently operates five stores in greater London. At the beginning of November 2011, a new opening is planned in Glasgow, and in Richmond a new store is scheduled for 2013. According to Whole Foods Market’s homepage, a total of 44 stores are in the development phase, mainly in the USA. 17 new stores are scheduled for 2011, and 19 for 2012. (Picture: WFM customers are not different from “normal” supermarket customers)

The return to double-digit growth rates occurred at the beginning of 2009: the listed company (Nasdaq) was able to make up lost ground and to benefit from the relatively stable market for organic food that was maintained even in the crisis. In the first quarter of 2010, the organic supermarket chain had already surpassed the predictions of the analysts and, compared with the first quarter of last year, it grew by 13.4 %. Insiders estimate Whole Foods Market is worth around six billion dollars on the stock exchange. 
(Picture: Less sign of crisis in Whole Foods stores)

Let’s return to Whole Foods in its homeland and to its successful marketing approach. With corporate design and the company philosophy in place, the marketing concept leaves enough scope for individuality – each store is unique, in the words of the company. This is what gives a store its specific flair. For example, it is surprising how many young people work in the stores and how many “alternative folks” there are next to “normal” customers pushing their trolleys between the bulging shelves to the checkout.

Whole Foods has not been idle in the face of the growing number of customers: opulent, tip-top fruit and vegetable departments, product displays and secondary placements, season and theme tables, helpful staff – you always get the feeling they are all friends. They appeal to the customer in lots of ways: everywhere on the shelves and walls you see hand-written messages on panels and posters – every possible means of communication is used, even serviettes, cardboard cups or the menu are pressed into service. Of course, the company has its own flyer and a customer magazine containing coupons. Naturally, they use the internet and blogs, Facebook, Twitter, etc. (Picture: A huge selection of fruit and vegetables)

At Whole Foods, many people are drawn to the vast array of food to take away or to eat on the spot. The range is amazing: soup bar, salad bar, a counter with vegetarian, Indian, Mexican and Italian dishes, fish, meat, sweet foods, snacks....you can get (just about) everything here. Often you find the stores have their own kitchen that keeps on stocking the counters from 8.00 – 22.00. “We bake and cook in the stores each day, and we offer an amazing array of fresh, healthy and organic food,” explains Jeff Turnas from Whole Foods Market Britain in a press release. “We want our customers to celebrate the joys of eating and living well.”  (Picture: Amazing array of food on the buffet)

This aim and the effort made by Whole Foods to offer an impressive shopping experience are appreciated by customers. In the evening in particular, you see lots of people on their way home from work collecting their evening meal from the various counters – people who clearly value the massive range of ready meals, salads, fine foods and convenience foods. These foods are priced by weight. Not all the food on offer is certified organic, but the company’s promise is that none of their food contains artificial additives and everything is produced as naturally and healthily as possible.

All the organics in the stores are certified organic. Whole Foods is America’s First National Certified Organic Grocer (CCOF) and this once again makes the company a pioneer. The customers are just as varied as the food itself, ranging from housewives, young families, business people in all categories and singles to ageing hippies and street people – a cross section of generations and social classes. (Picture: Rendezvous salad bar: Many working people help themselves at the counters and shelves to food-to- go)

Whole Foods says of itself: “We know we have always been a bit different. Those 19 people who opened our first store were really an idealistic bunch! We’ve now got a team of 50,000, and we’re pleased we can still say that our idealism and commitment to our values are as great as they ever were. It has been extremely rewarding to see that Whole Foods Market is much more than a grocery store to our shoppers and our team members. It is a catalyst for helping to make our world a better place to live. Now we have the scale, visibility and opportunity to have a larger influence than ever before.”
Video: “Create Organisations of Trust”

The company Whole Foods Market was founded in 1978 in Austin/Texas. The first store was opened in 1980. WFM now has 297 stores (average retail area: 43,000 square feet), 57,200 employees and is therefore in ninth place among the food stores and drugstores in America. WFM sells around 2,400 store brands (e.g. 365 Everyday Value). WFM is a partner in the non-GMO project. The board has 12 members. Until the end of 2009, the chairman of the board and CEO was the founder John Mackey. He has been succeeded as chairman of the board by Dr. John B. Elstrott. Another senior member of WFM is Walter Robb, who sits on the board and is the co-managing director. He is also on the board of the Whole Planet Foundation.  The formats of Whole Foods Market are: Whole Foods Market, Fresh & Wild TM, and Harry’s Farmers Market. Wild Oats and Capers Community Market TM are trademarks owned by Wild Marks, Inc. (Picture: Entrance to a WFM store in San Francisco)

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