Whole Foods is the largest organic and natural foods grocer in the United States. Clearing $188 million in profits over the past two years, it has beaten Wal-Mart in overall and comparable store sales growth, while profoundly impacting how Americans eat. The company also prides itself on treating employees in a fair and equitable manner and preventing upper management salaries from skyrocketing out of control. Financial data is released to employees, to help them understand how the company is doing and keep the working environment transparent. Executive pay is limited to 14 times the average frontline worker, while frontline employees qualify for stock options, profit sharing, health insurance for full time employees, and paid time off for volunteer work.
Innovation
When John Mackey founded Whole Foods Market it was one small store in Austin, Texas, committed to sustainable agriculture and battling the industrialization of the food supply. Whole Foods Market® is now a publically traded corporation and the world's leading retailer of natural and organic foods, with 171 stores in North America and the United Kingdom. But it remains uniquely mission driven, highly selective about what it sells and dedicated to stringent Quality Standards. Its core values are to sell the highest quality natural and organic products available, satisfy and delight customers, empower employees, create wealth through profits & growth and care about communities and the environment.
To understand the unusual way of the Whole Foods philosophy, you must consider the story of the ducks who were not allowed to swim. When an animal rights activist confronted Mackey with the accusation that his Whole Foods stores were selling ducks from a farm where they were being maltreated, Mackey did some in-depth research into the issue. Finding that the farm - a small, high-quality operation raising antibiotic and steroid-free ducks - were keeping the ducks indoors, trimming their bills, and never allowing them to swim, Mackey decided that Whole Foods would immediately begin using its influence and buying power to demand the meat it sells comes from animals that have been treated with a measure of dignity. The farm in question is now designing a swimming area for the ducks and Mackey has moved his own diet from vegetarian to vegan.
Ranked as one of Fortune Magazine's Top 100 Companies to Work for since 1998, Whole Foods is setting an example for the benefit of empowering employees. Whole Foods stores, and even individual grocery departments within the stores, have a lot to say about what is stocked and how the store is designed. Every store also contains a binder with the previous year's gross pay for every company employee - including executives - to help employees understand how their company is doing and know that the company is sticking to its rule that executive pay is limited to 14 times the average pay of frontline workers. Mackey feels strongly that dramatic pay differences between the front lines of companies and the executive suites are corrosive over time.
Whole Foods has developed a distinctive profit-sharing feedback loop. Every four weeks, individual work teams are assessed for productivity and a profit sharing is awarded in every other paycheck. Employees are careful who to vote onto their teams as it could directly impact their paychecks.
Impact
Whole Foods cleared $188 million in profits over the last two years, besting grocery giants Food Lion and Safeway both of which have twice as many stores. While other grocery chains average a 2.5% increase in sales each year, Whole Foods five year performance shows consistent increases of between 14% and 23% each year.
Even more revealing is the fact that its comparable-store sales increases ranged between 7.7% and 10% over the past five years. Comparable store sales are a measure of how well similar stores that are already open do year over year. A typical Whole Foods store that did $15 million in business in 1999 did $21.4 million in 2003.
Even a giant like Dole Food now sells organizc bananas thanks to Whole Foods where the number one produce item is bananas, and they will soon sell organic pineapples. Organic Valley cooperative, a large national supplier of organic milk, has grown with Whole Foods over the years and is now selling its milk in supermarket giant, Publix, as well.
Inspiration
"If you look back 100 years from now, history will show that Whole Foods will be in the top five companies that changed the world," says Doug Greene, founder and former editor of Natural Foods Merchandiser.
The World Inquiry editorial team edited this profile from the original submission of the interviewer or other source. The views expressed do not necessarily represent Case Western Reserve University, the Weatherhead School of Management or the Center for Business as an Agent of World Benefit. More >>
