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Whole Foods Market became a pioneer in selling naturally-sourced produce when organic food was undergoing a renaissance in the West. The idea to capitalize on the changing food trend was brought up by four hippies John Mackey, Renee Hardy Lawson, Mark Skiles, and Craig Weller, in the 1980s. It was a result from an idealistic attempt to change the way people eat, make them healthier and promote sustainable harvesting.
Whole Foods Market got huge success after John Mackey came with an idea to buy products from 1970’s style health food Co-ops and package them in a way and make them look like a conventional product. His idea was to normalize the consumption of healthy food and make it available in supermarkets. However, at that time, these organic products were not available in supermarkets.
Whole Foods’ journey started with a struggle- John Mackey & Renee Lawson borrowed $45,000 from family & friends to open an organic vegetable store called Saferway in Austin. Two years down the line, Mackey and Lawson partnered with Craig Weller and Mark Skiles to merge Saferway with Clarksville Natural Grocery to open the original Whole Foods at 10,500 square feet with 19 staff.
Initially, the team members and founder faced several challenges, but they were driven by a mission to nourish people and the planet with hygienic food. From a small store run by hippies to a multinational company acquired by Amazon. It’s truly an American’s success story.
Mackey and Lawson aimed not at running another grocery store but to change people’s thoughts about food and its role in the community. So instead of selling pre-packaged fruits &vegetables with commercial pesticides, they partnered with local farms from the Austin area to sell fresh organic vegetables and fruits. In a short period, the large group of customers got fancied by their store & became a regular buyer.
In a catastrophe, only a few months later after the opening, Austin witnessed the worst flood, which tore apart uninsured building, but with the help of loyal customers, the damage was quickly recovered.
Whole Foods Market Expansion
In the mid-1980s, new stores were opened in Austin, Houston, and Dallas. The first expansion out of Texas came with the purchase of the Whole Foods Company of New Orleans in 1988. Within ten years, Whole Foods became a national company by purchasing local or regional natural food chains.
The company further moved to Canada in 2002 and into the U.K. in 2004. Its single largest purchase was Wild Oats Markets, which operated in 109 stores in the U.S. and Canada when Whole Foods had more than 190 stores. Currently, the company has over 500 outlets.
However, in 2017 amid the declining sales, John Mackey’s Whole Foods Market was rescued by Amazon and got acquired for $13.7 billion. Now Amazon is expanding the digital footprints of this brick and mortar store.
So What Worked for Whole Foods?
Quality Above Everything
Whole Foods Market differentiates itself from competitors based on quality. The separation is achieved through unique features that define Whole Foods. The main selling point of this company is organic & natural products free from hydrogenated fats & chemicals. They focus on maximizing product quality. E.g., the company always seeks products with the least possible artificial ingredients to stand out from the rest.
Brand Positioning as All Naturals
Whole Foods Market was among the first grocery store to attain the “certified organic” label in America. The company gives a competitive edge to its counterpart by offering high-quality products to USDA-accredited, third-party certifier. It is also certified by California Certified Organic Farmers.
Less Advertising, More Word of Mouth Marketing
Whole Foods Marketing has been averse to run ads on print or visual media. The brand focuses on awareness to attract customers to their stores and ensure the service provided at the store entices customers to make them come back. WFH’s marketing expenses have been lower than the 0.5% of sales for several years. The company did not even have any loyalty program until 2015. It relied a lot on word of mouth and social media. The company has an active marketing team on Pinterest, Twitter, Facebook & Instagram with over 11 million followers combined. It was only after 2015; the company came up with a new marketing strategy and launched a national ad campaign with over $20 million budget amid declining sales.
In 2008, Whole Foods became U.S.’s first grocer to eliminate plastic grocery bags at the checkout. By 2019, they also stopped selling plastic straws from all of their stores.
As the company is sensitive towards local farmers they work with, it offers annual small interest loans to farmers annually. Whole Foods understand the link between organic farming & reverse climate changes. So to promote regenerative organic agriculture, the company supports farmers.
It’s no wonder that Whole Foods’ prices are costlier than the rest, but the company repeatedly claims that it chooses people over profits. This is true since the company is deeply involved in charities. Whole Foods donates 5% of net sales to a local non-profit organization. Additionally, they run a foundation: Whole Planet- for alleviating global poverty, Whole Kids- Improving Children’s nutrition, and Whole Cities – for healthy food access for all.
To Sum up!
Here are the words from the CEO of Whole Foods, John Mackey
“Just as people cannot live without eating, so a business cannot live without profits. But most people don’t live to eat, and neither must businesses live just to make profits.”
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