Whole Foods Market

Prepared by Lindsay Hunt March 30th, 2005

WHOLE FOODS MARKET, INC.

MarketBuster Summary When the first Whole Foods opened in 1980, very few consumers in the United States were concerned about where their food came from, how it was processed, and what chemicals were used to produce it. However, consumers were starting to become more aware of threats such as genetically modified foods, Mad Cow Disease, pesticides, additives and preservatives. The increase in awareness led to an increase in demand for organic and natural foods. If a large supermarket chain had realized the potential of the organic foods market earlier, it is likely that it could have smashed Whole Foods since the company was so small at the time. However, it took quite a while for traditional grocers to offer organic foods and as a result, Whole Foods had time to gain momentum and penetrate the market. Whole Foods no longer worries about being overtaken by competitors because Whole Foods has a strong brand name and is now large enough to compete with any of the competing food retailers.1 The company has taken advantage of the trend towards organic foods and is now the world’s leading retailer of natural and organic foods with 171 stores in North America and the United Kingdom. (See Exhibit 1 for organic growth statistics) The Story Anarchist, tree-hugger, vegan, laidback, and competitive are a few of the adjectives that can be used to describe John Mackey, founder of Whole Foods Market. Mackey refuses to play by traditional rules. He opened Whole Foods Market, an organic supermarket, when the organic community’s mantra was, “small is beautiful.” He decided to sell meats and fish in the stores even though many of his customers at the time were vegetarians. He insists that his employees make a difference and offers even the grocery baggers a stake in the company’s success. His success has been significant—Whole Foods Market is the number one organic retailer and continues to grow organically and...