http://www.guardian.co.uk/supermarkets/story/0,,2043674,00.html
Ripe target
To its fans, the US supermarket chain Whole Foods Market is proof that green
shopping can be glamorous. But its critics claim the store has got greedy
and betrayed its organic ideals. And now it's coming to Britain. Alex Renton
reports
Tuesday March 27, 2007
The Guardian
'Love where you shop!" proclaim the signs at the entrance to the vast branch
of Whole Foods Market in Austin, Texas. Yeah, right, you think. You wouldn't
get that sort of tosh at Tesco - they couldn't take the ridicule. But
shopping at America's only natural foods superstore chain is seductive in a
way no British aisle-basher has ever known. Even at nine in the evening,
everyone in the shop - students, nurses, workers from the nearby State
Capitol building, where George W Bush once ruled - seemed to want to be
there. There were customers on dates: at the little trattoria near the
cheese counter, a pair in their 20s told me they came to the supermarket
most weeks for dinner.
"Couple got engaged here the other day," smiled the burly chef behind the
counter, tossing up fresh tagliatelle with an organic heirloom tomato sauce.
When I emerged clutching my trophies - a jar of alder wood-smoked sea salt,
a cherimoya fruit "hand-picked in Mexico", a freshly baked organic knish - I
wondered if doing the supermarket run would ever be the same again.
Whole Foods shops are supermarkets - but not as we know them. Pile it high,
sell it cheap, the business plan of Tesco's founder Jack Cohen, remains the
dominating ethos of the British trade. John Mackey, the founder, chairman
and CEO of the $5.6bn (£2.85bn) Whole Foods Market, piles it pretty and
sells it nice. But Mackey is more messianic in his quotes. His is a company
"based on love, not on fear". "Whole Foods, Whole People, Whole Planet" is
the slogan. "We believe in a virtuous circle embracing the food chain, human
beings and mother earth," proclaims another sign at the store's entrance.
There are a lot of signs in a Whole Foods Market - all part of making you
feel like a better, healthier, happier shopper.
There are many sceptics but there is no denying that through his
green-tinged supermarket chain, Mackey has introduced the ethics of food
supply to the American mainstream. As one organic vegetable farmer, a rare
breed in Texas, told me: "You can't argue with one thing - if it wasn't for
Whole Foods we'd still be handing out leaflets telling folk what organic
is."
He has also made the country's traditional supermarket chains sit up, not
least because Whole Foods has outperformed all of them in recent years. It
generates twice the profit per square foot of any other US supermarket - and
it is opening 20 new stores a year. In February, it swallowed its main
rival, Wild Oats Markets, in a takeover worth half a billion dollars, adding
another 110 stores to give it nearly 300 across north America.
Now Whole Foods is coming to Britain: a "European flagship" shop opens in
London in June, on three floors in the former Barkers department store in
Kensington. At more than 80,000 sq ft, it will be the largest food store in
the city centre. If it does well, there will be "a lot more", according to
Mackey. With this move, Whole Foods will enter the vicious fight that is
British supermarket retailing right at the battleground's heart - the
conscience-struck consumer.
Sales of organic food have risen by more than 30% in the past two years.
Both here and in the US, it is the fastest-growing sector in food retail.
This is why, with supplies becoming a problem as the boom accelerates,
British chains have been so busy this winter shouting "greener than thou" at
each other: Tesco, Marks & Spencer and Sainsbury's have all announced
schemes to buy more local produce, reduce "food miles" and clean up their
carbon. Whole Foods' arrival will take this tussle to another plane.
Whole Foods' trick is to marry green - even if it is a pretty soft version
of green - with comfort. Selling organic doesn't have to mean an unwashed
carrot in a shop smelling of mould and patchouli. Or being guilt-tripped by
a viciously priced-up banana in Sainsbury's. Quite simply, they are the most
gorgeous supermarkets I have ever seen. This is not just about the sheer
lavishness - the 600 cheeses, the 20 yards of fresh-fish counter, the 32
different freshly made sausages from "free-roam pigs" - but also a palpable
sense that the notion of mass retailing of food has been turned on its head.
There is a sense of ease and wholesome fun - Disney does Borough Market. You
are encouraged to fossick and chatter as you might in a grocer's shop -
remember those? This is no strip-lit warehouse. The look is opulent, more
Harrods food hall than Waitrose clinical.
There are mini-restaurants dotting the spaces between the aisles: a sushi
bar, the trattoria, the Living Foods salad counter. A long canyon walled
with vats, 200 of them, full of every flour, pulse and bean I have ever
heard of, waiting for you to fill your own bag on an honesty-box basis. In
the book aisle, you will find Al Gore, Mohammed Yunus and solar-powered
radio sets on the shelves. The own-brand loo paper is chlorine-free, of
course, but also "100% recycled with 80% post-consumer content", whatever
that is. And everywhere there are assurances of goodness, endless detail on
just how decent products are. This is the root of why Whole Foods Market is
a cult - ask any New Yorker, in whose city a fourth store is just opening.
Its stores are its temples, adept at making you feel you have done good just
by entering the ("conscientiously constructed from sustainable materials"😉
building.
There are Americans who are sarcastic about Whole Foods. It is widely known
as "Whole Paycheck" and, as one Texas journalist put it, a temple of
"bobos" - bourgeois bohemians who "talk like hippies but walk like yuppies".
I couldn't find anyone in the Austin store who would grumble. Most people
were ecstatic. "I love this store," said an old lady in the dairy section.
"Sure, it's not so cheap, but it's so friendly and homey." Clutching my arm,
she told me how to cash in on that. "Here's a secret - pick up something and
tell the attendant you're not sure you'll like it. They'll write on the
label, and - guess what! - when you get to the checkout, they'll give it to
you for free!" There is indeed a defining company policy that says that if a
customer is looking at two different apples in a befuddled manner, they
should be offered a bite of each. It would be fun to see Sainsbury's try
that.
The staff are "passionate, attentive team members", according to the WFM
website. They wear kepis and aprons; dreadlocks and goatees seem to be the
company standard for hair organisation, and they are ridiculously charming.
This may be because by US retail standards they are reasonably well-paid,
starting at $10 an hour (the US minimum wage is $7.25 an hour), and they get
free health insurance and significant profit share. They appear to run their
teams democratically (though forming unions is discouraged). They hail you,
a "guest", not a customer, from their counters with offers of a sample of
freshly roasted jalapeño and lime cashews or a piece of "outstanding Texas
barbecue" in the tones of a larky-but-respectful market trader.
This will shock brutalised British trolley-pushers: it buries the notion
that supermarkets must be pared down, frills minimal, all to pass on maximum
savings to the price-conscious customer. It is the Starbucksification of the
supermarket. And if it works in Britain, the shift in supermarket culture
could be swift: remember, armchairs and skinny lattes were alien artefacts
in our cafes hardly 10 years ago. Mackey states that he has never understood
the fixed mindset of supermarkets, whose guiding model was Wal-Mart. "Not
everyone is concerned with getting mediocre food at the lowest price," he
has said, and he has proved that true.
Whole Foods Market is in most ways an ordinary capitalist empire, geared to
the market and its mania for growth. It turned over $5.6bn last year out of
190 stores in the US, Canada and the UK (it has owned the London natural
foods chain Fresh & Wild, which has six outlets, since 2004): the company's
phenomenal rise from just 12 shops when it went public in 1992 has been
largely through aggressive takeovers. It is still not a big player in the
vast world of US retail, but Whole Foods' profit margins have got the big
supermarkets thinking. There are now basic lines on staple goods whose
prices compare pretty well with the standard supermarkets. And these are
getting worried. In March last year, Wal-Mart started to stock organic
foods - though most are hidden away in a weirdo's corner with the tofu and
the vegetarian cheese, just as British supermarkets used to do before they
realised the golden premium there is in selling organic alongside
conventional produce.
Whole Foods Market began in an Austin garage in 1978, when Mackey, a
philosophy graduate hippie, and his then girlfriend, Renee Hardy, turned a
vegetarian co-op into a shop, using local farmers as suppliers. They called
it SaferWay - a gag at the then dominant Safeway. The store was a hub for
the university town's alternative scene and it was militantly vegetarian.
Yet, from early on, Mackey showed some pragmatic entrepreneurial traits.
Within a couple of years he decided to "sell products that I didn't think
were healthy - meat, seafood, beer, wine ... We were a whole-food store, not
a holy food store."
Mackey and his colleagues grew by buying up other, less financially astute
enterprises - and by borrowing the centralised distribution systems of the
traditional retailers. By 2004 Whole Foods was America's fastest-growing
mass retailer, in 2005 it was in Fortune magazine's top 500 US companies and
last year it made a $1.6bn profit. In June 2006, a share bought in Whole
Foods for $2.92 in 1992 was worth more than $70. The expansion goes on: a
target of 80 shops in the UK and Europe has been mentioned and Mackey says
he wants to double turnover - to $12bn - by 2010.
Mackey, 54, runs the empire partly from his 720-acre ranch outside Austin,
where he tends chickens (and eats their eggs), venturing out in person and
by blog to conduct arguments with people in the organics movement who
believe that Whole Foods has betrayed most of its principles. He is an
intriguing combination of the patriarchal idealist and a hard-headed,
growth-pursuing businessman, with strong libertarian views. Deeply
anti-union (he is widely quoted as likening unions to "having herpes"😉, he
is criticised for refusing to back what might seem obvious causes, for
instance over the rights and pay rates of migrant labour on American farms.
But he still has a quest, according to his blog, to reform industrial
agriculture, and indeed "to make the world a better place".
Late last year, in a letter to Whole Foods' 43,000 staff, Mackey announced:
"I am now 53 years old and I have reached a place in my life where I no
longer want to work for money, but simply for the joy of the work itself and
to better answer the call to service that I feel so clearly in my own
heart." As of January 2007 he said he would reduce his own salary to $1,
donate his stock options to the company's charitable foundations, and set up
a $100,000 fund for team members with emergencies. The letter was signed:
"With much love".
For all that, the fundamental green movement in America has fallen out of
love with Mackey and his shops. One reason is that the core promise of the
stores "to offer the highest quality, least processed, most flavourful and
naturally preserved foods" is plainly not borne out in the aisles. The rank
of chiller cabinets stocking "natural" TV dinners is just one example. It's
"whole foods-lite" - what the market can take, not what the rhetoric would
suggest.
The other is more elemental - that big cannot be good. Supermarket chains
and sustainable, natural food production just aren't compatible. Michael
Pollan devoted a section of his 2006 book The Omnivore's Dilemma to a
devastating critique of Big Organic, as exemplified by the rise of Whole
Foods and the industrialisation of organic agriculture in the US. Many of
the pioneering whole earth and organic farms in the west coast region have
been taken over by the same grand agricultural corporations they were set up
to oppose. One vast operation in California grows 80% of all America's
organic lettuces. An issue that particularly bothers Pollan and his
followers is the issue of local sourcing - not least jetting in asparagus
from South America in January. Whole Foods is unashamedly pulling in produce
from all over the world.
I found a stack of bottles of Italian fizzy mineral water bottles, sold
under Whole Foods' budget- label brand, on special offer at 99 cents a
litre. Can a shop seriously call itself environmentally responsible when it
is shipping products that are available locally half way across the world? I
ask a Whole Foods buyer. He shrugs and says, "We're offering a choice - and
the imported fizzy waters sell better than local."
In the view of Ronnie Cummins, director of the Organic Consumers Association
in the US, Whole Foods' green policies are "just a veneer". "They'll do the
right thing if pushed by the media - otherwise it's just business as usual."
Clearly, trading off ethical ideals against consumer desires is how Whole
Foods has thrived. Though in the end the customer comes first, as Jason
Duran, produce team leader for the chain's south-west region, told me. He
believes people in the north shouldn't eat grapes in December. But he
doesn't believe Whole Foods should stop them from doing it and so Whole
Foods sells grapes and asparagus in January, flown in when necessary. Duran
acknowledges that there are fewer local organic producers in Texas than
there were 15 years ago - a fact that disappoints him.
Stung by the criticism, the company is working to address the complaints
over the miles its food travels - pushing local produce harder in the stores
and offering cheap loans to local producers. Whole Foods is given some
credit by campaigners, not least for having worked to stop the dumbing-down
of the US's official organic standards, in the face of powerful lobbying
from Big Agriculture for the bar to be set as low as possible. Mackey has
said that the company must now consider going "beyond organic", and do more
to address other ethical concerns around industrialised food. Whole Food is
pushing its own fair-trade label, called, in classic Whole Foods style,
"World of Good".
But this has not satisfied critics like Cummins: "Whole Foods now is a
big-box retailer - and it's much more concerned about competing with the
other big boxes than issues of ethics and sustainability. But the rhetoric
goes on because Mackey is good at it - good at PR." In the view of many
American green campaigners, Whole Foods took an anti-big-shop movement,
assimilated its virtues, did away with its annoyances, and made another big
shop out of the result.
On a raw day in the ranchland where the Colorado river runs through
south-eastern Texas, I met Joan Gundermann, the biggest organic vegetable
farmer in the area. Gundermann is a determined smallholder who has seen her
90-acre market-gardening enterprise through tornadoes and floods, raised a
son with severe diabetes and won a fight with Whole Foods Market. She was
one of Mackey's early suppliers, and is now, in her easygoing way, among his
sternest critics.
"At the beginning Whole Foods loved us and took care of us, but then it went
all greedy. When they got bigger they got just like all the other big boys.
Suddenly you couldn't sell direct to the stores but you had to go through
their centralised distribution scheme. In effect, we were locked out - I
lost $40,000 worth of produce that season. I said, if you want, go and play
with the California boys. You can screw a Texas farmer once, but not twice."
Now, she says, in satisfaction, Whole Foods has "come crawling back". Carol
Ann Sayle, who runs Boggy Creek Farm, an organic market garden in the Austin
suburbs, told me: "We said to them, 'We don't want our salad to go to
Lousiana. We want it to go downtown to our store.'"
For Gundermann and Sayle, and many in the organic movement, Whole Foods is
less a betrayal of their ideals than an example of a missed opportunity -
the chance to harness the enormous consumer power it has generated to the
original ideals of the organic movement. "All these stores say 'fresh
produce' - that's a big lie," says Carol Ann Sayle. "There's no such thing
as fresh in a retail store. We need to start by being honest with the
consumer."
Brad Stufflebeam, president of the Texas Organic Farmers and Growers
Association, sees the problem as lying far deeper - the supermarkets, by
making food cheap, have destroyed the agricultural system (Americans spend,
on average, less than 10% of their income on food, down from 24% in 1947).
"We've devalued food and we've devalued farmers. Now the skills are being
lost: the average farmer in America is 65 years old." It's a point that
Mackey acknowledges - if we are to return to a more sustainable agriculture,
we will have to learn to pay more for our food.
How will these debates play out as Whole Foods establishes a foothold in
Britain? The company says it will price its staples competitively against
the supermarkets - though in Kensington, you imagine, that won't be much of
an issue. Local sourcing will present huge challenges: there are already
shortages of British-produced organic staples such as milk, beef and salad
vegetables. The rival supermarket chains are gearing up to meet Whole Foods'
challenge. By last autumn, almost all the spring 2007 production of
Britain's organic fruit and vegetables had already been contracted,
according to one New Covent Garden dealer. My guess is that they won't have
it easy: Whole Foods could get an old-fashioned British retail industry
mugging. But the shoppers of Kensington High Street are going to fall in
love."
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