Whole Foods Exploring New Strategies in a Crowded Organics Market


Sponsored Message
Learn More

Mon. June 30th, 2014 - by Christofer Oberst

AUSTIN, TX - Whole Foods used to stand alone among mainstream suppliers of fresh, organic produce, but now in a booming and increasingly competitive market it's feeling the pressure of Fresh Market, Kroger, and Sprouts Farmers Market where it hurts: its bottom line.

"For a long time Whole Foods had the field to ourselves, pretty much. That was nice. But we don't any longer," Whole Foods CEO John Mackey said.

In the most recent fiscal quarter, Whole Foods lagged behind its competitors with no net income growth and a 2.4% decrease in comp-sales growth to 4.5%, all poor figures compared to the same fiscal quarter in 2013. Compare that to Sprouts which has enjoyed a 86% increase in net income and a 12.8% increase in comp-sales or Fresh Market's 2.5% increase in comp-sales and you quickly see room for improvement. Investors this month presumably agreed, driving down the price of Whole Foods' stock 20% after the release of its most recent earnings report, according to The Motley Fool.

The question before Mackey now is what to do next. Whole Foods is no longer the only major provider of organic produce among the major American retailers. In order to continue to grow it will need to adapt and evolve in the changing market.

As Motley Fool reporter Anand Chokkavelu noted in a recent article, Whole Foods has already begun this process, with “Make-Your-Own OJ” juice bars, increased focus on their farmer's market inspired produce layouts, and street food kiosks outside of select Whole Foods locations.

Another idea tossed around by industry insiders is a policy emulating the "Inglorious Fruits and Vegetables" selections by the French retailer Intermarche. By offering this visually-imperfect produce to customers at a 30% discount, Intermarche sold 1.2 tons of food which would otherwise have been discarded in the first two days of the sale alone. While Whole Foods already strives to minimize food waste, policies such as this could help to drop it even further, and hopefully increase its net income figures in the process. Check out Intermarche's "Inglorious Fruits and Vegetables" in the video below.

The intent is to keep Whole Foods feeling unique and authentic in a market that could have over 3,000 organic retailers within the next 10-15 years, according to the Motley Fool. To put that in perspective, Whole Foods currently has just under 400 store locations nation wide.

Organics aren't going away anytime soon and Whole Foods is going to need fresh, new ideas if it wants to continue to be an industry leader in this important market.

Stay tuned to AndNowUKnow for further developments in this story.  

Whole Foods