Whole Foods Market (WFMI) is the world's leader of natural and organic foods. The company has embraced a growing trend among consumers for healthy food choices. Unlike those (Wal-Mart) who are attempting to capture a piece of the growing trend toward healthier food products, Whole Foods selects many of their products from local producers of fruits and vegetables.
Companies like Wal-Mart are looking for ways to cut into the organic food business, but they have one major problem. Wal-Mart has a reputation of driving down the prices on its suppliers where it becomes unprofitable for farmers to do business with them.
With farmers refusing to give in to Wal-Mart's pricing pressures, the company simply turns to the overseas markets like it does with the rest of their products. Given the high food standards set by Whole Foods, industry experts believe that companies like Wal-Mart will lower those standards by importing cheap organic products from places like China and South America.
Oh, but Wal-Mart has forgot one important issue. People looking for organic alternatives are not stupid. One reason consumers have turned to stores like WFMI, is because of foreign grown food products sold by Wal-Mart. Now the corporate beast is trying to convince consumers that they are an organic supplier too. Oh, really?
Organic and natural food buyers are wise to what they are buying. Wal-Mart may appeal to people not well versed in the industry of organic foods, but they will not appeal to WFMIs customer base. They know better.
Heck, even Wal-Mart CEO Lee Scott was quoted at the company's annual meeting, "We know that customers at all ends of the income spectrum want organic and natural foods." What he didn't say is many of his Wal-Mart customers would not know the difference between products sold at his stores, and products sold at Whole Foods.
When Whole Foods says locally grown, they mean products are grown seasonally from area's around the country. For example, California may have artichokes in the spring, Michigan has blueberries and cherries in the summer, and Washington has apples in the fall.
Whole Foods is currently doing business with more than 2,400 independent farms. Since the growing season varies from region to region, WFMI cannot buy all of their products locally, but the company only buys products that meet their high quality standards.
While others attempt to get into WFMIs business for increased profits, Whole Foods has a passion for what they do.
After today's news that same-store sales for WFMI rose just 6.8 percent in the first five weeks of the fiscal year, the company's CEO, John Mackey cut his own salary to $1, and announced he would not take any stock options. You didn't see Wal-Mart's CEO Lee Scott lower his salary after his company reported lower than expected numbers for October.
Mackey went on to say that "total sales should rise 13 percent to 17 percent in the current fiscal year." The company had previously thought sales would rise from 15-20%.
Wal-Mart needs to continue to do what they do best; provide consumers whose jobs have been outsourced to other countries with products made by the people who took their jobs.
