Whole Foods Market Case Study
Whole Foods Market was founded 1980 in Austin, Texas by three businessmen who felt that the natural food industry was ready for a supermarket setup. Two separate individual companies, Safer Way Natural Foods and Clarksville Natural Grocery, formed Whole Foods Market. After 27 years of operation, the company has come a long way. Today Whole Foods Market is the leading retailer of natural and organic foods, with 194 stores/locations in the United States, Great Britain, and Canada (wholefoodsmarket.com). The company has been in the Fortune Magazine's "100 Best Companies to Work for" every year since the list was made up in 1998 (2007 ranked 5th). The cofounder and CEO, John Mackey, believes that the success of the company is due to the unique mission of the company and its application. The mission of the company is "highly selective about what we sell, dedicated to our core values and stringent quality standards and committed to sustainable agriculture." Or another way to say it "the highest quality, least processed, most flavorful and naturally preserved foods." (pg C-1)
The market for natural and organic foods has been growing rapidly since the company's conception in 1980. The Organic Trade Association (OTA) showed that in 1990 sales of organic and natural foods were $1 billion. In 13 years, the total sales went from $1 billion to $10 billion (sales have increased 10 times). By the end of 2007, the OTA predicts that sales will increase to $30 billion. The growth rate of the market is reaching new heights. The year 2000 was the first time that major supermarkets in the U.S. sold more organic and natural foods than the 14,500 natural food stores. Larger Supermarkets such as Kroger and Wal-Mart have created special "health food" sections for natural and organic foods. (p. C-3) Legislation passed the Organic Food Production Act which has helped with increased growth in the market. October 2002, the USDA established a labeling standard so people know that they are buying an organic/natural good. The labeling system and the increased demand have led to a very competitive Market.
How has Whole Foods Market survived? That question is easy. They follow their motto of "Whole Foods, Whole People, Whole Planet". This motto means more than what it seems. The company gets their product from local business and also from all over the world. They are often small businesses/farms who are dedicated to their unique foods. The company wants the best product but they also want the best workers to join their team. They look for people that can make their own decisions, passionate about their work, and well-rounded human beings. The company also believes that they should take responsibility for their portion of the Planet. They believe that the best way to keep the environment safe and promoting sustainable agriculture is by organic farming. (p. C-2) The company lives beyond their mission of selling food, with focusing on their motto too.
Like every company in America, Whole Foods uses strategies that maximize their profits, but will not endanger their quality of product. The strategy that the company believes is high quality and great, nutritious taste. The company looks to keep growing by acquiring more and more stores. With new acquisition, the company still keeps their reputation of being high quality, nutritious products. Since 1991, they have acquired 67 stores through 14 acquisitions. In the years to come, the company is expected to build more new stores instead of buying existing stores. (p.C-6) Building new stores has come about because the natural foods stores are normally not big enough for the likes of Whole Foods Market.
The stores that are more than eight years old averaged about 28,000 square feet, but stores less than eight years old average about 36,000 square feet. The newest stores range between 25,000 and 80,000 square feet....
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