Whole Foods Market's Growth Strategies and Future Prospects
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Case Code: BSTR244 Case Length: 22 Pages Period: 1978-2006 Pub Date: 2007 Teaching Note: Available |
Price: Rs.400 Organization: Whole Foods Market Industry: Retail Countries: The US Themes: Growth Strategy |
Abstract Case Intro 1 Case Intro 2 Excerpts
"Traditional supermarkets don't have a driver to get customers in. Whole Foods has the one thing that's lacking in the food retail business: creativity."
- Jason Whitmer, analyst at FTN Midwest, in 2005.
"We are a lifestyle brand and have created a unique shopping environment built around satisfying and delighting our customers."
- John Mackey, co-founder and CEO of Whole Foods, in 2006.
Whole Foods Buys Wind Energy
In January 2006, Whole Foods Market Inc. (WFM), the largest organic and natural products retailer in the world, became the biggest corporate consumer of renewable energy in the US, when it announced that it would purchase 458,000 megawatt-hours of wind energy credits that year from Renewable Choice Energy, a Colorado-based wind power company. These credits reportedly covered the company's entire energy requirement for 2006 (they were also thought to be enough to power 44,000 homes for a year). WFM did not disclose the cost of the purchase, but said that it was "in line with the company's current utility budget" (Refer to Exhibit I for a note on organic food).
The purchase underlined WFM's commitment to the environment, and enhanced the company's image among its target consumers, most of who were also committed to natural products and environmental causes. "From a branding perspective, it's a stroke of genius. It shows they understand where their customers are coming from not only nutritionally, but environmentally,"said Barbara Brooks, president of the Strategy Group, a Florida-based consulting firm. The impact was strengthened by the fact that WFM's purchase of renewable energy was not motivated by gain, as the company did not receive tax concessions or any other benefits from its action. WFM announced that it did not view the wind energy purchase as a cost, but as a sales driver.
"All of those things we do related to our core values help drive sales, help convince a customer to drive past three or four other supermarkets on the way to Whole Foods,"said Michael Besancon, a Regional President at WFM. Wind energy was one of the fastest growing sources of energy in the US in the early 2000s, and WFM's shift to renewable sources was expected to encourage other companies to follow suit. Kurt Johnson, the head of the US Environment Protection Agency's (EPA) Green Power Partnership said, "In the corporate world, this is huge. When a market leader does something like this, others will emulate." According to the EPA, the second and third largest consumers of wind energy in the US as of early 2006, were the US Air Force (312,416 megawatt-hours), and consumer and healthcare products major Johnson & Johnson (241,398 megawatt-hours)...
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