When the Food Game Becomes Unwholesome: The Whole Foods Perspective

Is it possible for a company dedicated to producing and selling wholesome food to itself stay wholesome?

That is a question I found myself asking as I read an interview in today’s Wall Street Journal with the co-founder and president of Whole Foods Markets Inc., John Mackey. One of the first questions was about "why your same-store sales are growing more slowly" (which led to a one-day 23% decline in the company’s stock Nov. 3, from which it hasn’t recovered).

Mackey generally seemed to provide fairly candid responses. He emphasized the company’s commitment to decentralization, which allows "each store to customize its product mix. If you go to the Austin store, there will be all kinds of small, local producers and vendors–from salsas to tofu to tabbouleh to hummus, to hundreds and maybe thousands of products that are unique to that store."

Another interesting response was his contention that Americans focus first and foremost on price in their food priorities. "What’s mainstream that isn’t cheap or inexpensive? I seem to think natural and organics will always be higher quality, and therefore always be a bit more expensive."

Finally, he indicated Whole Foods is giving more attention to animal welfare, and launching next year "animal products that have been raised with more awareness, with their welfare as a higher priority." Not sure exactly what products he has in mind–possibly grass-fed beef?

All of which comes back to my original question about whether it’s possible to remain wholesome. Say what you will about Whole Foods selling sugar and caffeine products, one of Mackey’s impressive accomplishments is that he’s stuck around with his company much longer than many owners of companies dedicated to wholesome foods. As the Seventh Generation list of about 50 companies that have sold out to corporate acquirers makes clear, many wholesome food entrepreneurs become much less wholesome once the financial enticements become real and significant.

I remember interviewing Mo Siegel, founder of Celestial Seasonings, when I was writing "How to Really Create a Successful Business Plan" in the early 1990s, and his recollections of how he recycled discarded telephone wire to bind the first packets of herbal tea, and how committed his team was to herbal tea, which was so revolutionary in the late 1970s. But Mo Siegel eventually decided to go off and do other things, and sold out to Cadbury Schweppes.

As the interview of Mackey of Whole Foods make clear, the business game changes significantly once a company goes public and Wall Street becomes involved. Suddenly there are securities analysts asking how you’re going to compete with Wal-Mart. Many entrepreneurs would rather take the money and run than deal with such matters.