Whole Foods Case Summary
Thompson−Gamble−Strickland: Strategy: Winning in the Marketplace
V. Cases in Crafting and Executing Strategy
1. Whole Foods Market, Inc.
© The McGraw−Hill Companies, 2004
CASE
Whole Foods Market, Inc.
Arthur A. Thompson The University of Alabama
1
Founded
in 1980 as one small store in Austin, Texas, Whole Foods Market had by 2002 evolved into the world’s largest retail chain of natural and organic foods supermarkets. The company had over 140 stores in the United States and Canada and sales of $2.7 billion; revenues had grown at more than 20 percent for 12 consecutive quarters. John Mackey, the company’s cofounder and CEO, said that throughout its rapid growth Whole Foods Market had “remained a uniquely mission-driven …show more content…
The new USDA regulations established four categories of food with organic ingredients, with varying levels of organic purity: 1. 100 percent organic products: Such products were usually whole foods, such as fresh fruits and vegetables, grown by organic methods—which meant that the product had been grown without the use of synthetic pesticides or sewage-based fertilizers, had not been subjected to irradiation, and had not been genetically modified or injected with bioengineered organisms, growth hormones, or antibiotics. Products that were 100 percent organic could carry the green USDA organic certification seal, provided the merchant could document that the food product had been organically grown (usually by a certified organic producer). 2. Organic products: Such products, often processed, had to have at least 95 percent organically certified ingredients. These could also carry the green USDA organic certification seal. 3. Made with organic ingredients: Such products had to have at least 70 percent organic ingredients; they could be labeled “made with organic ingredients” but could not display the USDA seal. 4. All other products with organic ingredients: Products with less than 70 percent organic ingredients could not use the word organic on the front of a package, but organic ingredients could be listed among other ingredients in a less prominent part of the package. An official with the National Organic Program, commenting on the appropriateness and need for the new USDA regulations, said, “For the first time, when consumers see the word organic on a package, it will have consistent meaning.”1 The new labeling program was not intended as a health or safety program (organic products have not been shown to be more nutritious than conventionally grown products, according to the American Dietetic Association), but rather as a marketing solution. An organic label has long been a selling point for shoppers
V. Cases in Crafting and Executing Strategy
1. Whole Foods Market, Inc.
© The McGraw−Hill Companies, 2004
CASE
Whole Foods Market, Inc.
Arthur A. Thompson The University of Alabama
1
Founded
in 1980 as one small store in Austin, Texas, Whole Foods Market had by 2002 evolved into the world’s largest retail chain of natural and organic foods supermarkets. The company had over 140 stores in the United States and Canada and sales of $2.7 billion; revenues had grown at more than 20 percent for 12 consecutive quarters. John Mackey, the company’s cofounder and CEO, said that throughout its rapid growth Whole Foods Market had “remained a uniquely mission-driven …show more content…
The new USDA regulations established four categories of food with organic ingredients, with varying levels of organic purity: 1. 100 percent organic products: Such products were usually whole foods, such as fresh fruits and vegetables, grown by organic methods—which meant that the product had been grown without the use of synthetic pesticides or sewage-based fertilizers, had not been subjected to irradiation, and had not been genetically modified or injected with bioengineered organisms, growth hormones, or antibiotics. Products that were 100 percent organic could carry the green USDA organic certification seal, provided the merchant could document that the food product had been organically grown (usually by a certified organic producer). 2. Organic products: Such products, often processed, had to have at least 95 percent organically certified ingredients. These could also carry the green USDA organic certification seal. 3. Made with organic ingredients: Such products had to have at least 70 percent organic ingredients; they could be labeled “made with organic ingredients” but could not display the USDA seal. 4. All other products with organic ingredients: Products with less than 70 percent organic ingredients could not use the word organic on the front of a package, but organic ingredients could be listed among other ingredients in a less prominent part of the package. An official with the National Organic Program, commenting on the appropriateness and need for the new USDA regulations, said, “For the first time, when consumers see the word organic on a package, it will have consistent meaning.”1 The new labeling program was not intended as a health or safety program (organic products have not been shown to be more nutritious than conventionally grown products, according to the American Dietetic Association), but rather as a marketing solution. An organic label has long been a selling point for shoppers