Whole Foods Market


There is no inherent reason why business cannot be socially responsible, ethical andprofitable.It must view people not as resources, but as sources.” 1

 – John Mackey

Background

Whole Foods Market Inc. is a mission-driven, socially conscious retail enterprise that makes natural foods and environmentally friendly products available to consumers in a relaxed and pleasing ambience. Its motto is “Whole Foods, Whole People, Whole Planet”. 

The company presently ranks 176 on the Fortune 500 list. Its revenues of $16 billion are generated from 470 expansive stores located across the United States, Canada, and the UK. In August 2017, the company became a part of Amazon Inc.

Whole Foods Market is a moderately profitable company. Its net income of $245 million amounts to 1.5% of its FY 2017 revenues. However, profit is not the company’s primary goal. Among its eight core beliefs, only one is tied to creating wealth through profits and growth. 

John Mackey founded Whole Foods Market in September 1980, in association with three other entrepreneurs. The idea was to create a “health” food store that featured wholesome food instead of pills and potions. Johnremains as the CEO of the organization, from inception till the present day. 

An avid reader and a straight-talking maverick, Mackeyis a strong supporter of the free market economy. He advocates love, joy, and happiness at the work place, and sponsors a unique environment that is characterized by fun, friendliness, and acceptance. 

John Mackey also bears a very casual personal style. He avoids staying at expensive hotels, and took five months off in 2003 to hike the entire 2,174-mile-long Appalachian Trail.

The Organizational Architecture

The organizational architecture at Whole Foods has been shaped by the humanistic and counter-cultural values of its Founder. Rather than simply being a food provider, Whole Foods Market positions itself as the leader of a food movement.The fulfillment of its vision is measured on five parameters: a) customer satisfaction, b) team member happiness and excellence, c) return on capital investment, d) improvement in the state of the environment, and e) local and larger community support. 

Whole Foods Market is governed by a cellular architecture. Each store is divided into teams in a manner that is similar to how people band together within a tribe. Team leaders at a store, the store leaders within a region, and even the company’s twelve regional presidents collectively represent a cell each. Every cell represents an autonomous profit centre that is fully authorized to take key operating decisions e.g. hiring, food placement, pricing, ordering, and in-store promotion. The cells closest to the customer have the maximum power for execution. 

The Whole Foods organization is more of a social system, and less a rigid hierarchy. Innovation and experimentation are allowed to occur at the store level. Energy and ideas work their way up, rather than the other way around. Peer pressure substitutes for bureaucracy. 

Whole Foods Market is unparalleled with regard to its inspired and entrepreneurial employees. The leadership at the company is decentralized. Employee inputs are regularly sought on operational matters. Team members are encouraged to act with alacrity in order to accomplish whatever needs to get done, and not waste time waiting for orders from above. 

A strong culture of empowerment permeates the company. With respect to rules, the belief is that less is more. Employees are encouraged to ask for forgiveness rather than prior permission. All these features help to elicit tremendous associate loyalty at every level of the organization.

Whole Foods Market’s open-book policy provides every team member with complete access to the company’s financial records. These include the salary and remuneration information for all of the company’s associates right up to the CEO. A salary cap at the company limits the maximum cash compensation (wages plus profit incentive bonuses) payable to any executive at the company in a calendar year to 19 times the company-wide annual average salary of all full-time team members. Since 2007, John Mackey himself earns only a symbolic $1 per year. 2

A unique gain-sharing plan at Whole Foods helps to provide additional wages to the tune of around 6% to its employees. Further, a whopping 94 percent of the company’s stock options are distributed to non-executives. These measures help to enforce a shared identity under which everyone feels equal and valued. This keeps the 89,000 employees of Whole Foods Market’s happy and engaged. The company has been featured on the Fortune “100 Best Companies to Work For” list every year since its publication in 1998. In 2017, it was placed at the 58thrank. 3

The governing principles of Whole Foods Market are oriented towards making a positive difference in the world at large. This Austin-based company has thus turned the (often vacuous) slogans of inspiration, autonomy, and teamwork into a powerful business model. It represents a remarkable corporate experiment in democratic capitalism.

Stakeholder-centric approach 

Whole Foods Market espouses the notion that all of its stakeholders are involved in the business together. It defines the term “stakeholder” to mean any person or agency that has an investment in what the organization does or sells. This includes the investors, the customers, its employees, its suppliers, and the social communities within which the company operates.

The management’s job is considered to be that of looking after the employees, who in turn serve the customers with all their heart. Happy customers take care of the shareholders, who in turn support the management. It is a virtuous circle. Paying attention to a broad swathe of stakeholders, and making decisions mindful of their collective interest, is a win-win exercise.

Whole Foods Market undertakes a number of measures to give back to the communities in which it operates. Each individual store has a lot of latitude in deciding the best way to meet the needs of the local community. Several times a year, stores hold community-giving days whereby five percent of that day’s net sales are donated to a local nonprofit or educational organization. Further, team members are paid for up to 20 hours of community service yearly. 4

The company features local products in the Farmer Markets that are held in the parking lots of its stores. It also helps independent farmers and local food artisans to flourish, by providing up to $25 million in low-interest loans through its Local Producer Loan Program. The Whole Foods Foundation supports projects that relate directly to organics and environment-friendly production methods, animal welfare, sustainable seafood, and healthy families and nutrition.4

The Declaration of Inter-dependence

The core vision and the stakeholder-centric values of Whole Foods Market are enshrined in its “Declaration of Interdependence.”5This unique document was originally created in 1985. It has been periodically revised thereafter. Its eight constituent themes are summarized below:

a)         Selling the Highest Quality Products Available: Whole Foods Market celebrates the fact that good food and cooking improves the lives of all of its stakeholders. It offers high quality natural and organicproducts at a competitive price. 

b)         Satisfaction, Delight, and Nourishment of Customers: Customers are recognized as the most important stakeholders in Whole Foods Market’s business. The organization goes to extraordinary lengths in order to satisfy and delight its customers within an inviting, informal, comfortable, nurturing and educational store environment. 5

c)         Supporting Team Member Happiness and Excellence: Whole Foods Market designs and promotes a safe work environment, wherein motivated team members can flourish and reach their highest potential. It strives to achieve a unity of vision and build trust amongst team members, while respecting diversity and individual differences. 5

d)         Creating Wealth Through Profits and Growth: Profits are essential towards the creation of capital for growth, job security, and overall success. The management team is the steward of the financial investments that facilitate value-creation activities and is committed to increasing the shareholder value in the long-term.

e)         Serving and Supporting the Local and Global Community: The business of Whole Foods Market is intimately tied to the neighborhood and the larger communities that it serves. Besides donating 5% of its after-tax profits every year to not-for-profit organizations, the company also responds readily in times of community need.

f)         Practicing and Advancing Environmental Stewardship: Whole Foods Market practices active environmental stewardship through a) the provision of support to sustainable agriculture, b) reduction of waste and minimizing the consumption of non-renewable resources, and c) environmentally robust programs for store cleaning and maintenance.

g)         Allying with Business Associates:  Whole Foods Market depends upon hundreds of other businesses in creating an outstanding retail shopping experience. It regards these trade partners as indispensable allies in the service of its stakeholders, and treats them with mutual respect, fairness, and integrity. 5

h)         Balance and Integration:Whole Foods Market seeks to dynamically balance the needs and interests of the numerous stakeholders of the organization. Accordingly, people at all levels are encouraged to listen compassionately, think carefully, and act with integrity.

Conscious Capitalism

Conscious Capitalism is a paradigm that was advanced by John Mackey, in order to explain how a business need not necessarily sacrifice its social mission for the sake of prosperity. It espouses an allegiance to a deeper mission or a heroic purpose as the key to marketplace success. Conscious capitalism thus helps to maximize value for all the stakeholders involved in the undertaking. 

This holistic, inter-dependent system is enshrined in the business model of Whole Foods. While many onlookers observe a tension between financial growth and social value, Mackey sees a synergy. To explain Conscious Capitalism, he refers to the paradox that the best way to maximize profits is to not make them a primary goal of the business.

To support his argument, Mackey refers to a study of 30 companies that managed to optimize total stakeholder value without an exclusive focus on profits or stock performance. These firms generated robust returns over the short and long term, in comparison with the S&P 500 Index. 6

The Genesis of the Enterprise

John Mackey, the Founder and CEO of Whole Foods Market, was born in Houston in August 1953. He was a free-spirited college student of Philosophy and Religion at the University of Texas as well as the Trinity University. 7While his parents pushed for a more traditional career path, Mackeyrealized that he would never fulfill his true calling until he actually followed his heart. 

Johndropped out of college six times, in search of meaning and purpose in life. Concluding that these were not to be found in the classroom, he came to live at a vegetarian cooperative farm and worked at a natural foods store. During this period, Mackey personally experienced that the food which a person ate could significantly determine how he or she felt. With this realization,he came to find his calling.

In the seventies, a barely detectable trickle of consumer concern had begun regarding chemicals, hormones and artificial ingredients that had percolated into the food chain. In 1978, Mackey and his girlfriend Renee Lawson raised seed capital of $45,000 from their family and friends in order to establish a health food store-cum-restaurant called Safer Way Natural Foods at Austin, Texas. 

Originally, the duo insisted on making everything from scratch. This inefficient method of production, coupled with parking shortages, led to Safer Way losing half of its capital during the first year.  

However, the venture encountered greater success in its second year. This led John Mackey’s father as well as one of the store’s customers to invest $25,000 each towards the establishment of a larger store. Mackey also persuaded two other local organic grocery owners to collaborate with him and Renee in this endeavour.

With this business background, the first Whole Foods Market was opened in 1980. Built over 10,500 square feet of area and employing 19 staff members, the store became an instant success. It carried a very large selection of natural and organic items. When a flood nearly destroyed the store in early 1981, it was saved by fierce customer loyalty. Dozens of people pitched in to help get it up and running again. And the company never looked back thereafter. 8

Growth of the Business (1981 – 1990)

In the eighties, natural food stores were usually not large, well lit, organized, or popular. Organic products were generally considered to be inferior, less reliable and costlier than the regular version of these food items. Thus, mainstream grocery shoppers mostly stayed away. 

In this milieu, Whole Foods Market offered natural versions of popular, conventional foods. Further, these were presented in a pleasing and enticing manner. This attracted mainstream customers, and helped to popularize the natural foods industry. In 1984, the company expanded out of Austin by opening a store in Houston. 

To build upon its early success and cater to the increasing demand, Whole Foods started to acquire some of the existing natural food retailers. In 1986, it purchased the Bluebonnet Natural Foods Grocery in Dallas. The Whole Food Company, based at New Orleans, was acquired in 1988. The next year, a store was opened in the chic Palo Alto area of California. By 1990, Whole Foods had expanded to become a flourishing chain of 10 stores. 9

During this period, the regulatory environment for the organic market was becoming more stringent. Before 1990, there was no national requirement for the certification of organic foods. That year, the US Department of Agriculture (USDA) formed a National Organics Standards Board in order to deliberate the finer points of what qualified as “organic”. 

Whole Foods Market represented the entire retail industry on this Board. This gave the company a unique opportunity to help shape the rules. Government spending and support towards the organic agriculture segment also increased after the USDA standards were announced.

The Era of Rapid Expansion (1991 – 2006)

Having tasted success, Whole Foods Market gradually became more ambitious. In its second decade, the company purchased many well-known natural food chains. The Wellsprings Grocery of North Carolina was added to the fold in 1991. With funds raised through an IPO in 1992, the upscale New England chain Bread & Circus became another prized acquisition. 10It introduced Whole Foods to freshly prepared gourmet foods on-site as a major new profit center.

The following year, Mrs. Gooch’s Natural Foods Markets was bought out. In 1996, Fresh Fields was added to the organization’s fold. Between 1996 and 2000, the company opened 40 stores through acquisitions in addition to the 50 green-field stores that were built from scratch. Nearly all of its stores were located in the top 50 metropolitan areas in the United States. The store layouts werecustomized to fit the particular site and building. They facilitated the prominent display of locally popular products.

Despite the large size of the new stores (between 35,000 and 55,000 square feet), the sales per square foot at Whole Foods Market were double the industry average. This was largely on account of the high price of organic foods, which carried a premium of 40 to 175 percent over regular food items. Not surprisingly, the company outperformed all its competitors on financial parameters such as inventory turnover, net income, and return on common equity.11

Between 1997 and 2003, many small and more specialized companies were integrated into the Whole Foods organization. These included Bread of Life, Amrion, Merchant of Vino, Allegro Coffee, Nature’s Heartland, Food for Thought, Harry’s Farmers Market, and Select Fish. 

While many acquirers forcibly graft their culture onto the companies they purchase, Whole Foods Market adopted the successful practices of the companies that it bought. For instance, when the highly reputed produce, meat, and seafood departments came its way through Bread & Circus, the organization added these new sections to its existing stores. These departments soon became a huge draw, and clocked up 65% of the company’s total sales by 2003.

During this period, Whole Foods catered to widely varying local tastes. Store managers were permitted to set the prices on locally competitive items. They were also given the discretion to stock 10% of each store with any natural food products that appealed to their judgment or struck their fancy.

In order to promote human well being by supplying high-quality wholesome foods, the company maintained a set of Quality Standards that represented its definition of “natural”. Artificial colors, flavours, sweeteners, preservatives, trans-fats, and hydrogenated oils were prohibited in the products sold at Whole Foods stores. 

At the same time, the companyoffered a large variety of foods such as sugary snacks, wines, cheeses, and chocolates. These did not fall under the category of healthy, even as they otherwise met its definition of “natural”. 

The expanded food selection opened the doors of Whole Foods Market to a much larger group of consumers. However,many of the company’s “high mission valence” employees and customers felt that this strategy went against the grain of the organization’s culture and values.

The organization forayed abroad in 2004, with its first international acquisition in the form of the popular British chain Fresh & Wild. In 2005, the company climbed onto the Fortune 500 list at number 479. By 2006, Whole Foods had become the largest natural foods retail chain and the fastest growing company in the fiercely competitive grocery market of the United States.

The Challenging Years (2007 – 2017)

In February 2007, Whole Foods Market announced a controversial merger with its primary competitor Wild Oats Markets. The objective was to consolidate its own position. The intent was also to avoid a profit-sapping price war. The US Federal Trade Commission challenged this deal by arguing its anti-competitive consequences. The transaction was finally cleared in March 2009, after Whole Foods agreed to divest itself of 31 Wild Oats stores and also relinquish the rights to the Wild Oats brand. 9

The acquisition did not quite turn out to be financially successful. Further, John Mackey committed an ethical transgression by posting anonymous messages for a number of years on Yahoo Finance that trashed the reputation of Wild Oats, prior to purchasing the company himself. While the Securities Exchange Commission eventually cleared Mackey of any legal wrongdoing, the episode left a scar on his personal reputation as well as that of Whole Foods Market.

In the ensuing months, the company encountered severe competition from many sources: a) lower cost alternative markets such as Trader Joe’s, b) conventional supermarkets such as Wal-Mart and Costco, and c) small sellers such as co-operatives and farmers’ markets.

During the summer of 2008, the company’s stocks and sales margins took a hit as a lethal combination of higher gasoline prices, a slowing economy, and higher food costs hit the United States. Commodity inflation, growing unemployment, and reduced job security diminished the purchasing power of many consumers, who quickly returned to buying cheaper food. 12

The 2004 acquisition of Fresh & Wild in the UK also turned out to be a drain on the organization. By September 2008, following the slump in the global economy, Fresh & Wild had reduced to just half of its original size and was losing money. Whole Foods suffered from a lack of differentiation, high price sensitivity, and limited brand exposure in the UK market. 

In the year 2015, the share value of Whole Foods Market dipped by about 35%. This was a result of growing competition from upstarts like Fresh Market as well as larger chains such as Kroger, coupled with weaker margins and a slump in the growth of same-store-sales.   

The company responded to these challenges by implementing cost-cutting measures that included the elimination of 306 jobs. It also offered discount coupons to combat the perception of high prices. To combat its somewhat “pricey” image, the organization also rolled out a new and more economical store format“365 by Whole Foods Market.”This initiative too did not quite encounter success. 9

Eventually, Amazon Inc. emerged to acquire a controlling stake in the company.

The Cultural Pillars

The holistic culture of Whole Foods promotes a strong sense of community, along with a fierce commitment towards productivity. Employee participation reinforces individual attention to performance and profits. In turn, the robust financial results provide people with more freedom to innovate. 12

Combining democracy with discipline, the company’s operational strategy rests upon three cultural pillars: a) teamwork, b) measurement and c) internal competition.

Teamwork

The organizational culture of Whole Foods is premised on decentralized teamwork. The “team” is the defining unit of its activities. Each store is an autonomous profit center that is composed of ten or more self-managed teams. Each such team has a designated leader, and clear performance targets. 12

Team members have the exclusive power to approve the selection and appointment of any new candidates on their team. After a 30-day probation period, it takes a two-thirds vote of the respective team for a candidate to get confirmed as a full-time employee of the company.

The team members collectively assume psychological ownership for their own performance standards. They routinely reject prospective candidates who are not perceived to be good enough. Another reason for the intense scrutiny of potential recruits to the team is that the company’s “gain-sharing” program ties bonuses directly to team performance. 

Whole Foods Market supports teamwork with a radically open and transparent financial system. The company collects and distributes information to an extent that would be almost unimaginable elsewhere. Sensitive data on team/store sales revenues and profit margins are available to every person across the organization. So much information is shared so widely, that the US Securities Exchange Commission has designated all of the organization’s 89,000 employees as “insiders” for stock-trading purposes.

Trust is the primary prerequisite for effective teamwork. The building of trust starts with the hiring vote, and is reaffirmed by the company’s open-salary policy. Whole Foods considers that it can afford to keep only a very few secrets if the organization wishes to create a high-trust organization where people are “all-for-one” and “one-for-all”.

However, there is also a competitive angle to teamwork at Whole Foods. Teams, stores, and regions compete vigorously with one another on quality, service, and profitability. Superior relative performance translates into enhanced remuneration, recognition, and promotions.

Measurement 

“What gets measured, gets done” is one of the most popular aphorisms in business. Whole Foods Market has taken it deeply to heart. The organization zealously measures its work results. It then disseminates this data all across the company. When the information is shared with people, they stay aligned with the vision of a collective fate.

Any curious team member has access to nearly as much operational and financial data as anyone at the company headquarters. A sheet posted next to the time clock in every store lists the previous day’s sales, broken down team wise. Another sheet lists the sales numbers for the same day last year. 12

Once a week, each store posts a report that lists the sales of every store in its region broken down team wise, with comparisons to the same week last year as well as “year-to-date” totals. Another weekly report gives sales information for every store in the company. 13

Once every month, stores get detailed information on profitability. This report analyzes sales, product costs, wages and salaries, and operating profits for all the 470 stores. Since individual teams make decisions about labour spending, ordering, pricing and all the other factors that determine profitability, these reports are indispensable for the team members. 14

The company conducts an annual morale survey to probe employee attitudes. It asks questions about the confidence that people have in their own team leaders, store leaders, and regional leaders. It enquires about the fears and frustrations of the people. Further, it also seeks the opinion of the associates on where the company seems to be straying from its values. 

The results of this survey become public information, and are even included in the company’s Annual Report to its shareholders.

Internal Competition

At Whole Foods Market, the pressure for performance comes not so much from the bosses as it does from one’s own peers. All the teams are expected to set ambitious targets, and are held accountable for their achievement. They are encouraged to not only compete against their own goals for growth and productivity, but also to vie against different teams in their store, and even against their counterpart teams in different stores across the various regions. 

Productivity is evaluated monthly. The teams that manage to deliver with less-than-budgeted labour costs become eligible for a so-called “gain-sharing” payout. Store team leaders are also eligible for an economic value-added bonus. This is based on the extent to which the store delivers a return that is higher than the corporate cost of capital.

The main vehicle for competition at Whole Foods is an elaborate system of peer reviews through which the different teams benchmark each other. The “Store Tour” is the most intense of these measures. On a periodic schedule, each Whole Foods store is toured by a group of as many as 40 visitors from another region. 11It is a two-day mix of social interaction, reviews, performance audits, and structured feedback sessions. The visiting troupe includes regional leaders, store team leaders, associate store team leaders, and leaders from two operating teams (for instance, grocery and nutrition) who work intensively with their colleagues in the host store. 

The Customer Snapshot (TCS) is another key exercise. Ten times every year, each store is toured by a headquarters official or regional leader and rated on 300 different items. Unlike store tours, the TCS is a surprise inspection that lasts for a full day. Once a month, the TCS results of every store go to every other store. These ratings carry great weight within the Whole Foods organization. They constitute yet another avenue for the stores and teams to contend with each other. This has helped to build a culture of incremental progress in the company. 12

Functional Excellence

Whole Foods Market’scompelling positioning is supported by outstanding functional practices.14 These may be examined from the marketing, human capital, and supply chain perspectives.

The Marketing Perspective

Whole Foods Market enjoys robust brand recognition. The company provides for an engaging and interactive shopping experience that is difficult to duplicate. It romances the food in a highly visual style and plays up the organic angle. Since over half of the shopping decisions are generally made on impulse, Whole Foods Market likes to engage the senses of its customers when they shop. 

The driving concept behind the merchandising strategy of the organization is to create an inviting store atmosphere. 16Whole Foods seeks to turn shopping for food into a pleasurable experience. A Whole Foods Store becomes a “third place” outside of home and work. Its customers can relax there, and also interact with others in a congenial environment. 16 

Much of the success of Whole Foods Market is derived from the wide publicity that is accorded to its socially conscious policies. The people living in contemporary society care about where their food comes from. They are willing to pay a premium to ensure that their spending habits don’t contribute to troubling environmental practices. 17

In the past, Whole Foods Market relied primarily on its unique store experience and organic products to stand apart from the competition. 18Although the company had quietly been telling its story for decades through community activation, grassroots partnerships, and public relations, it decided to debut its first national brand campaign in October 2014. 

Supported by a budget of $20 million, the campaign was entitled as “Values Matter”. It employed poignant storytelling by the organization’s suppliers and employees to edify and entertain consumers in order to convey the company’s commitment to quality, standards, and taste. For instance, the company’s TV advertisements feature the farmers and fishermen that Whole Foods Market partners with – in order to deliver high-quality products. 19

The Human Capital Perspective

Whole Foods is successful, because its gutsy founder has largely handed over the operation to his employees. And they have responded with remarkable commitment and dedication. 

The company has a uniquely pleasant and helpful workforce that is committed to healthy food, service of the customer, and the promotion of a healthy environment. The covenant that exists between the organization and its employees is that the people shall be treated as fully informed partners in the business, in return for the assumption of full responsibility for ace performance.

Each Whole Foods store employs between 40 and 650 individuals. They are organized into self-directed teams. 87% of the team members are full-time employees. The employee attrition stands at a relatively low rate of 26%. 

When a new store is opened, at least 30% of the staff comprises of company veterans who have accepted a transfer to the new location. The organization actively discourages the formation of worker unions at its facilities.

The individuals who succeed at Whole Foods are the ones who have a knack for pleasing customers and enjoy the candid style of give-and-take. However, the organization’s appeal for its prospective employees lies beyond its social mission and its deep commitment to natural and organic foods. 

In urban areas, many employees are recent immigrants who are attracted to the company because it offers full-time jobs with health insurance and other benefits that are particularly generous in comparison with conventional supermarket positions. In suburban areas, employees include high school students or graduates who want a steady job close to home. 

While the guiding values at Whole Foods Market appear to be soft, a hard-core, competitive spirit pervades the organization. The company does not see any conflict between wearing its heart on its sleeve and running an organization that cares about profits. In fact, these two orientations as viewed as complementary and profoundly synergistic with one another.

The Supply Chain Perspective

On account of the highly perishable nature of many organic food items, the distribution of natural produce represents one of the greatest operational challenges for the organic food industry. 

Individual farmers and producers find it awkward to deal with large retail chains. They also face inconvenience in transporting the goods across long distances. Thus, local producers usually sell their output to intermediate distributors such as the United National Foods. These organizations in turn supply to the large retailers.

In line with the industry trend, the logistics and distribution function at Whole Foods Market has become increasingly centralized over the passage of time. The organization has built state-of-the-art distribution centers. Designed to service 50 to 60 stores each, these facilities are organically certified. They are designed and built with specific areas for dry goods, a variety of freezer spaces, space for tropical products, as well as rooms for video conferencing.  

By 2005, the company’s centralized facilities included 10 regional distribution centers in the U.S. and the U.K., three seafood processing and distribution centers, a specialty coffee operation, five regional commissaries, 12 bake-houses, and a national meat purchasing office. 

Whole Foods Market, along with other similar organizations, has been criticized for ignoring the locally focused, sustainable values that they supposedly extolled. Instead, they are alleged to have contributed to the rise of “industrial” organic farms that are owned by corporate giants such as Earthbound Farm and Cascadian Farm. These firms do not match the image of a small, local farm that many shoppers think they are supporting when they purchase organic produce. 

While their operations are properly certified, these giant farm organizations replicate many of the troublesome elements of a non-organic food supply. This includes the shipping of food products over long distances, pre-packaging the food, and operating large distribution networks. 

Whole Foods Market explains that centralized distribution helps its suppliers to gain access to all the company stores within the region. This results in a benefit to their bottom line. 

The Pursuit of Ethics

Whole Foods Market is something of an ethical conundrum. It simultaneouslypursues apparently conflicting values or qualities, and straddles both the ends of the ethical equation. In fact, John Mackey himself has popularly been labeled as a) spiritual & calculating, b) forthright & aloof, c) humble & arrogant, as well as d) good-natured & prickly. 

While Mackey advocates the pursuit of a deeper purpose beyond profits and also acknowledges the interdependencies among all the stakeholders, Whole Foods Market continuously strives to rout small-scale competition. Even as the company believes that business should be ethical and socially responsible, Mackey personally spread misinformation about Wild Oats for a number of years prior to Whole Foods acquiring that company.

Further, Whole Foods believes that its primary objective is to provide consumers with healthy and natural food of the highest quality. At the same time, the company is savvy enough to position itself as a trendy shopping place. This enables its customers to make a statement about their perceived status.

Also, while the organization professes to deeply care about its employees and seeks to build a happy workplace, it actively promotes competition among its various teams, store, and regions that invariably leads to friction. The list of such dichotomies is quite long.

Ethicsoften demands standards of behaviour that follow popularly established norms. Like a parent demonstrating “tough love” to a recalcitrant child, the methodology followed by Whole Foods may sometimes be questionable. Some of its actions might even appear to be bizarre.However, the company’s intent has always been unquestionably noble. It has relentlessly pursued the larger good, and also the wellbeing of all its stakeholders.

Concluding Reflections

Whole Foods Market has long been admired as an innovative company with quality standards, responsiveness to the community and the environment, a healthy growth model and highly regarded employment practices. 20The company has remained faithful to its core mission by and large, even as it bent a few norms in order to accommodate customer needs and stay competitive. This may appear hypocritical to some people, but sound progressive to others. 

To revitalize the company from historical lows, Amazon Inc. has introduced many changes at Whole Foods Market after the takeover. The prices of food items in several categories have been cut, some by as much as 40%. Whole Foods is now selling its products on the Amazon.com website, and its erstwhile loyalty program has been replaced with Amazon Prime. 

The freedom of the local stores to sell regional items is being curtailed, as the company stocks up on more national brands. The brand representatives are now banned from visiting the Whole Foods Market stores. These moves are intended to cut costs and modernize the company’s back-end operations. 21

Under the new ownership and in a tough market, it shall beinteresting to watch how Whole Foods Market manages to maintain its wholesome spirit as well as the authenticity of its social mission.

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