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CORPORATE ORGANICS : Case Study - Whole Foods Market

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Case Study - Whole Foods Market

From one alternative wholefood store in Austin, Texas, Whole Foods Market has grown through a series of acquisitions and mergers to become the largest natural food supermarket, with more than 300 stores in North America and the UK.[xl] The company won a legal battle in 2007 with the US Federal Trade Commission (FTC), the US competition watchdog, over its planned merger with its biggest rival Wild Oats. The FTC tried to block the merger arguing that consumer choice in the natural and organic sector would be undermined if the deal went through.[xli]

In his book, The Omnivores Dilemma, which examines the food industry by dissecting four meals obtained from four very different food systems, Michael Pollan chose to shop in his local Whole Foods Market store to buy his 'Big Organic' meal. Pollan says the meal featured an 'organic' chicken which, despite a 'free-range' label, shared a shed with twenty thousand other birds. Whilst, theoretically, there is access to a patch of grass, the doors are kept shut until the birds are five or six weeks old, and two weeks later the "free range" chicken is on sale in the store. As Michael Pollan says, “the trickiest contradiction Whole Foods attempts to reconcile is the one between industrialisation of the organic food system of which it is part and the pastoral ideals on which that industry has been built”.[xlii] Pollan says the wordy labels, artful photographs and glossy brochures are part of a literary genre he calls “supermarket pastoral” in which the marketing consultants or “grocery store poets”, do everything they can to encourage us in our willing suspension of disbelief about the reality of organic food production.

Despite its humble beginnings, Whole Foods Market is no longer creating an alternative vision of the food system. It has bought into the industrial agribusiness model and has, on founder and CEO John Mackey's own admission, played an important part in the industrialisation of organic food production in the US.[xlii] The company says that it supports local, organic and sustainable farming and the walls of the stores have huge photographs and quotes from 'local' farmers. Whilst these profiles may be heart-warming, they also artfully mislead customers about what they are really being sold. The reality is that in the US, Whole Foods uses the same kind of regional distribution system as the big supermarkets, and, like conventional supermarkets, has found it easier and more profitable to buy from just a few big farms. This kind of distribution system actively undermines small local suppliers: they can't produce the volumes of food required for regional or national distribution, or are too far away from the distribution centres for it to make economic sense to deliver a small amount of produce to them. As a consequence, much, though Whole Foods won't say how much, is shipped to its stores across the US from big Californian producers, like Earthbound Farms and Cal-Organic.[xlv] John Mackey insists that Whole Foods buys some of its fresh produce locally to its US stores. Whilst distances are much greater in the US, Whole Foods' definition of 'locally grown' as “only produce that has travelled less than a day (7 or fewer hours by car or truck) from the farm” is stretching the idea of what local means.[xlvi]

John Mackey is a great admirer of Wal-Mart, stating: “What a great, great company! Wal-Mart has single handedly driven down retail prices across America”. This is a Wal-Mart policy which has put many small retailers and suppliers out of business.[xlvii] He also approves of Wal-Mart's policy of “crushing the parasitical unions”.[xlvii] Despite being in Fortune's '100 Best Companies to Work For in America', Whole Foods Market is as anti union as Wal-Mart, and has been criticised for firing two workers, who were involved in unionising the Madison, Wisconsin store, over a minor issue.[xlviii] As for its track record with respect to its suppliers, Whole Foods stores in the US stock tomatoes from one of the most notorious Florida sweatshop producers and has ignored an appeal from the Coalition of Immokalee Workers, a group of migrant workers, to pay an extra penny a pound for these tomatoes.[xlix] Mackey has also been accused of market rigging and fraud after he was exposed giving investment advice on a blog under a pseudonym, in which he talked up his own company and attacked its main competitor, Wild Oats. This was at the same time as Wild Oats was the subject of Whole Foods Market's takeover bid.[l] We can observe, in this example, very similar predatory behaviour to that displayed by 'mainstream' corporations.

Despite the marketing hype of its mission statement, Wholefood's business practices and its expansion plans essentially mirror those of the conventional retail sector. Michael Pollan says of Whole Foods, “whilst growing the aragula (rocket) is organic, everything else is capitalist agribusiness as usual”.[li]

References

[xl] Whole Food Markets website

www.wholefoodsmarket.com/company/

[xli] Organic Monitor, 'Organic Supply Chains Consolidate as Supernatural Emerges' October 31st 2007 www.organicmonitor.com/r3110.htm

[xlii] Michael Pollan, The Omnivore's Dilemma: A Natural History of Four Meals 2006 Penguin

[xliii] Correspondence between John Mackey and Michael Pollan about the portrayal of Whole Foods Market in Pollan's book, The Omnivores Dilemma

www.wholefoodsmarket.com/blogs/jm/archives/2006/05/an_open_letter_1.html and www.michaelpollan.com/article.php?id=80

[xliv] Ibid

[xlv] Whole Foods Market

www.wholefoodsmarket.com/products/locally-grown/index.php?state=UK

[xlvi] Find more about WalMart and its tactics at http://walmartwatch.com/

[xlvii] John Mackey, under his 'Rahodeb' pseudonym, on the Whole Foods Market message board, March 14 2003 http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_W/threadview?m=tm&bn=19842&tid=9467&mid=9567&tof=1&rt=2&frt=2&off=1&p=.5xcAevAWsfKVk07g4BHh8nVGKB7xpgBNed.TO8UzCmg0a0AmJ3HWgU-

[xlviii] Campaign for Labor Rights www.clrlabor.org/alerts/2002/Dec18-02-DecIndex.htm#2-2

[xlix]Letter to food retailers from Alliance for Fair Food July 20 2007 www.allianceforfairfood.org/2007affletter.html

Leonard Doyle 'Migrant workers chained beaten and forced into debt, exposing the human cost of producing cheap food' December 19 2007 The Independent http://news.independent.co.uk/world/americas/article3263500.ece

[l] just-food.com, US: Whole Foods boss defends Wild Oats attacks July 12 2007 www.just-food.com/article.aspx?ID=99081&lk=dm

[li] Michael Pollan, The Omnivore's Dilemma: A Natural History of Four Meals 2006 Penguin