Whole Foods Market

History

Early years

In 1978, John Mackey and Renee Lawson borrowed $45,000 from family and friends to open a small vegetarian natural foods store called SaferWay in Austin, Texas (the name being a spoof of Safeway). When the two were evicted for storing food products in their apartment, they decided to live at the store. Because it was zoned for commercial use, there was no shower stall, so they bathed using a water hose attached to their dishwasher.

Two years later, Mackey and Lawson partnered with Craig Weller and Mark Skiles to merge SaferWay with the latter's Clarksville Natural Grocery, resulting in the opening of the original Whole Foods Market, which included meat products. At 10,500 square feet (980 m2) and with a staff of 19, the store was large in comparison to the standard health food store of the time.

On May 25, 1981, the most damaging flood in 100 years devastated Austin. Whole Foods' inventory was ruined, and most of the equipment was damaged. The loss was approximately $400,000, and Whole Foods Market had no insurance. Customers, neighbors, and staff assisted in repairing and cleaning up the damage. Creditors, vendors, and investors assisted in the recovery, and the store reopened 28 days later.

Expansion

Beginning in 1984, Whole Foods Market expanded from Austin, first to Houston and Dallas and then to New Orleans with the purchase of The Whole Food Co. in 1988. In 1989, the company expanded to the West Coast with a store in Palo Alto, California.

The company made its initial public offering on January 23, 1992. The company's ticker symbol on the Nasdaq was WFM.

While opening new stores, the company fueled rapid growth by acquiring other natural foods chains throughout the 1990s: Wellspring Grocery of North Carolina, Bread & Circus of Massachusetts and Rhode Island (banner retired in 2003), Mrs. Gooch's Natural Foods Markets of Los Angeles, Bread of Life of Northern California, Fresh Fields Markets on the East Coast and in the Midwest, Bread of Life of Florida, Detroit-area Merchant of Vino stores, and Nature's Heartland of Boston. The company purchased Allegro Coffee Company in 1997. The company's 100th store was opened in Torrance, California, in 1999.

The company started its third decade with additional acquisitions. The first was Natural Abilities in 2000, which did business as Food for Thought in Northern California. After the departure of then company president Chris Hitt and regional president Rich Cundiff, Southern California region, John Mackey promoted A. C. Gallo, president of the Northeast region, and Walter Robb, president of the Northern California region to co-COO and soon after added the titles of co-president. This led to the promotion of three new regional presidents and a new era for the company. David Lannon became president of the Northeast region, Anthony Gilmore became president of the Southwest region, and Ron Megehan became the Northern California region, president. In 2001, Whole Foods also moved into Manhattan. Later that year, Ken Meyer became president of the newly formed South region and Whole Foods Market acquired the assets of Harry's Farmers Market, which included three stores in Atlanta. In 2002, the company continued its expansion in North America and opened its first store in Toronto, Ontario. Further continuing its expansion, Select Fish of Seattle was acquired in 2003.

In late 2004, it was reported that Whole Foods had "cleared $188 million in profits in the last two years."

In 2005, Whole Foods opened its 80,000 sq ft (7,400 m2) flagship store in downtown Austin. The company's headquarters moved into offices above the store.

2017–present: Amazon subsidiary

In February 2017, Whole Foods said it would close nine stores and lowered its financial projections for the year as the natural-foods company struggled with increased competition and slowing sales growth. In late April 2017, Whole Foods reported their sixth consecutive quarter of declining sales and announced that the company would be closing nine stores: two each in Colorado and California, and one each in Georgia, Arizona, Utah, New Mexico, and Illinois. The loss of revenue was attributed to foot traffic being down and other supermarkets offering a similar experience for a lower cost.

In June 2017, Amazon announced it would acquire Whole Foods Market, adding some 400 physical stores to Amazon's e-commerce assets. The purchase was valued at $13.7 billion and caused Whole Foods's stock price to soar after the announcement was made.

In 2018, Whole Foods announced its possible intention to take over some vacant Sears and Kmart stores and refurbish them after Sears Holdings Corporation, which owned both chains, filed for bankruptcy in October.

In April 2022, Whole Foods in Austin, Texas, began allowing consumers to make purchases by scanning their palms. The system uses the Amazon One system connected to a customer's debit or credit card.

In September 2022, John Mackey stepped down from his position as CEO of the company, one he held since its inception in 1980. Jason Buechel succeeded him. Buechel previously was executive vice president and chief information officer (CIO) between 2013 and 2019, followed by a tenure as chief operating officer (COO) from 2019 until his promotion in 2022.

In March 2024, Whole Foods announced they will close their Fulham and Richmond stores in the UK, as well as their distribution center in Dartford. The Amazon-owned supermarket also announced that they have signed a lease for a new store on King's Road in London's Chelsea, expected to open its doors in 2025.

In January 2025 workers at a Whole Foods Market in Philadelphia voted to become the first unionized store in the grocery chain, hoping that a union could help negotiate higher wages and better benefits. Whole Foods said it was "disappointed" by the unionization. In February 2025, Whole Foods asked the National Labor Relations Board to reject the results of the union election, making unspecified allegations that the election was invalid.

Product quality

Whole Foods Market sells only products that meet its internally developed, proprietary quality standards for being "natural," which the store defines as minimally processed foods that are free of hydrogenated fats as well as artificial flavors, colors, sweeteners, preservatives, and many others as listed on their online "Unacceptable Food Ingredients" list. Whole Foods also stated its intent not to sell meat or milk from cloned animals or their offspring, even though the U.S. Food and Drug Administration (FDA) has ruled them safe to eat.

The company also sells many USDA-certified organic foods and products that aim to be environmentally friendly and ecologically responsible. Stores do not carry foie gras or eggs from hens confined to battery cages due to animal cruelty concerns as a result of successful advocacy by animal welfare groups. The Whole Foods website details the company's criteria for selling food, dietary supplements, and personal care products.

Until June 2011, body care products sold at Whole Foods could be marketed as organic even if they contained ingredients not listed by the USDA as acceptable for use in organic food. "Products made using petroleum-derived and other synthetic or chemical ingredients, prohibited in organic foods, can be found among the organic shampoos and lotions made by Avalon, Nature's Gate, Jason Natural Cosmetics, Kiss My Face and other brands," said Urvashi Rangan, an environmental health scientist at Consumer Reports. This is because the federal guidelines that regulate organic food labeling do not apply to cosmetics. Starting in June 2011, personal care products sold at Whole Foods Market were required to follow the same USDA National Organic Program standards for organic food. This required products labeled "Organic" to contain 95 percent or more certified organic ingredients.

In a Wall Street Journal article in August 2009, John Mackey acknowledged that his company had lost touch with its natural food roots and would attempt to reconnect with the idea that health was affected by the quality of food consumed. He said, "We sell a bunch of junk." He stated that the company would focus more on health education in its stores. As of 2013, many stores have employed Healthy Eating Specialists who are team members who "answer customers' healthy eating questions and can assist ... in choosing the most nutrient-dense ingredients, suggest satisfying healthy recipes," and help "create a meal plan in keeping with your health goals."

Rating systems

Whole Foods Market has developed several in-store rating systems for various departments to allow their customers full transparency in purchasing. The Seafood department has a Sustainability Rating System for wild-caught seafood while farm-raised seafood has to meet aquaculture standards both rated in accordance to third-party auditors. The Meat department has a rating system in partnership with the Global Animal Partnership based on animal welfare. The produce department has a rating system based on farming practices which include measures of a farm's environment, GMO transparency, worker safety, and wage practices. The grocery department has an Eco-scale rating system for its cleaning products which measures their environmental impact. Each system is in place to allow customers to make the most educated choices within Whole Foods Market. There are efforts to create more rating systems in other departments.

GMO product labeling

Whole Foods Market has announced plans to provide its customers GMO (genetically modified organism) product labeling by 2018. Efforts of GMO transparency run the gamut of each department. For years, Non-GMO Project Verified items have been sought in Grocery. While efforts continue in Produce, Whole Foods recommends buying organic or referring to their "Responsibly Grown produce rating system [which] requires growers to disclose the use of GMO seeds or plant material." In Seafood, plans are being made to launch a Non-GMO Project Verification process for farm-raised fish. Currently, there are no USDA Organic regulations for farmed seafood.

Purchasing

Whole Foods Market purchases products for retail sale from local, regional, and international wholesale suppliers and vendors. Most purchasing occurs at the regional and national levels to negotiate volume discounts with major vendors and distributors. Regional and store buyers focus on local products and any unique products necessary to ensure a neighborhood market feel. Whole Foods says that the company is committed to buying from local producers that meet its quality standards while also increasingly focusing more of its purchasing on producer- and manufacture-direct programs. Some regions have an employee known as a "forager," whose sole duty is to source local products for each store.

Whole Trade Guarantee

In April 2007, Whole Foods Market launched the Whole Trade Guarantee, a purchasing initiative emphasizing ethics and social responsibility concerning products imported from the developing world. The criteria include fair prices for crops, environmentally sound practices, better wages and labor conditions for workers, and the stipulation that one percent of proceeds from Whole Trade-certified products go to the Whole Planet Foundation to support micro-loan programs in developing countries. The company's goal, published in 2007, is to have at least half of its imported products from these countries fully certified by 2017.

Efforts

Whole Foods Market has a policy of donating at least five percent of its annual net profits to charitable causes. Some of this mandate is accomplished through store-level donations held on certain "5% days" throughout the year. The rest of it comes from various targeted projects by the company.

Environmental involvement

In May 1999, Whole Foods Market joined the Marine Stewardship Council (MSC), a global independent, not-for-profit organization promoting sustainable fisheries and responsible fishing practices worldwide to help preserve fish stocks for future generations. The company first began selling MSC-certified seafood in 2000, and a growing selection of MSC-certified fish continues to be available.

Whole Foods placed third on the U.S. Environmental Protection Agency's "Top 25 Green Power Partners". The company also received the EPA Green Power Award in 2004 and 2005 and the Partner of the Year award in 2006 and 2007. A January 8, 2007, Environmental Protection Agency (EPA) report listed Whole Foods Market as the second-highest purchaser of green power nationwide, citing its actions as helping drive the development of new renewable energy sources for the electricity generation. The EPA report showed Whole Foods Market using 463.1 million kilowatt hours annually. It was covered, 100 percent net-wise, by its total electricity from biomass, geothermal, small hydro, solar, and wind sources.

In August 2024, Whole Foods dairy suppliers were planning a pilot program with Windfall Bio, a startup company with financing from the Amazon Climate Pledge Fund, Breakthrough Energy Ventures, Mayfield, and others, to add microbes to the soil of their farms that consume methane emissions to produce fertilizer.

Energy

Whole Foods Market claims several energy efficient initiatives on the store website, including installing electric vehicle charging stations, harnessing solar energy, achieving green building certificates, using green refrigeration, and designing grocery stores of the future.

In 2006 Whole Foods Market was amongst the first retailers, and the first Fortune 500 company, to offset 100% of their emissions by purchasing Renewable Energy Credits (RECs). Skepticism surrounding this purchase and RECs as a whole have been prevalent online. Harvard Business Review writes that "the money paid to purchase those RECs, in theory, subsidizes the higher cost of producing clean electricity, making this alternative competitive, or creates a market mechanism that will cause more renewables to be produced." The energy produced by wind farms that are benefactors of RECs is distributed to the same power grid as energy from fossil fuels, making the success of RECs difficult to track and quantify. Energy policy researcher Michael Gillenwater states that "claims that the U.S. green power market result in additional wind power lack credibility." A 2022 study found that the purchasing of RECs inflates the actual value of this environmental commodity in terms of limiting emissions.

Whole Foods Market also has several stores that function entirely on UTC power fuel cells on-site. One of the company's Mississippi locations plans on utilizing a local wind farm funded by Amazon to source the store's energy needs. In the case study of a Raleigh, North Carolina Whole Foods Market, the company worked with the U.S. Department of Energy's Commercial Building Partnerships to plan and evaluate the construction of an extremely energy-efficient building, which if successful, would have been rolled out to other locations. Whole Foods Market is also working with the Environmental Protection Agency's GreenChill program to reduce refrigerant emissions. Refrigeration is extremely energy-intensive, leading the company to start using a refrigerant with a 68% lower global warming potential than the most commonly used refrigerants.

Whole Foods signed an agreement with SolarCity to install solar panels on up to 100 stores. In 2015 the company was named in the top 25 companies by number of solar installations. Whole Foods also reduced their energy usage by 21% between 2010 and 2021.

Whole Foods Market extends their energy initiatives globally. The company's non-profit organization, Whole Planet, which aims to alleviate poverty also pertains to climate mitigation. In 2023 the company announced that they would fund the distribution of solar home kits across Sierra Leone, making energy more accessible with a Pay-as-you-Go model.

Eliminating plastic

In January 2008, Whole Foods Market was the first U.S. supermarket to commit to eliminating disposable plastic grocery bags to help protect the environment and conserve resources, and many stores serve as a collection point for shoppers to recycle their plastic bags.

On Earth Day, April 22, 2008, the chain eliminated the use of disposable plastic grocery bags company-wide at point-of-purchase in favor of reusable bags or paper bags made from recycled paper. The company also began offering "Better Bags", large, colorful grocery bags made primarily from recycled bottles. The move from the traditional paper/plastic system to reusable bags has been packaged as an initiative the company calls "BYOB – Bring Your Own Bag". The campaign is aimed at reducing pollution by eliminating plastic bags and reducing waste by encouraging bag reuse with "bag refunds" of 5–10 cents, depending on the store.

However, it still offers single-use plastic bags in its produce department and does little to discourage persistent use by customers and Amazon Prime Now shoppers alike.

Treatment of animals

Whole Foods created the Animal Compassion Foundation in January 2005 to help other producers evolve their practices to raise animals naturally and humanely. On December 5, 2014, the organization registration was canceled. In 2008, Whole Foods created the Global Animal Partnership (G.A.P.) and says that "all fresh beef, pork, chicken, turkey and lamb (except kosher turkey and chicken) must be certified to meet 100+ animal welfare standards" set by the organization.

Whole Foods announced in June 2006 that it would stop selling live lobsters and crabs, but in February 2007, made an exception for a Portland, Maine, store for its ability to meet "humane standards". The lobsters are kept in private compartments instead of being piled on top of one another in a tank, and employees use a device that gives them a 120-volt shock so that they are not boiled alive in a pot of water. This decision was criticized by ex-lobsterman Trevor Corson as damaging a New England tradition and as removing people's connection to where their food comes from. In 2022, Whole Foods said it would temporarily stop selling Maine lobsters due to sustainability issues and a possible risk to whales.

In May 2014, Whole Foods launched a pilot program to sell rabbit meat in 5 of its 12 market regions. Because domestic rabbits are the eighth most common pet in the United States as well as an animal rescued and sheltered alongside cats and dogs, this decision triggered a nationwide boycott of Whole Foods by the vegetarian activist House Rabbit Society and their supporters. In June 2014 Whole Foods awarded a financial grant to Oz Family Farms, a family-owned rabbit meat business.

In January 2015, a group of activists organized under the network Direct Action Everywhere (DxE) released a video of laying hens from a Northern California farm that supplies eggs to Whole Foods. In the video, which featured footage of crowded, dirty henhouses and injured birds, DxE contended that the hens' welfare was severely compromised, even though numerous boards had labeled the farm as "Certified Humane".

In 2015, animal rights groups People for the Ethical Treatment of Animals (PETA) and DxE released investigations criticizing Whole Foods animal welfare standards and accusing Whole Foods suppliers of animal cruelty. After the release of its investigation, PETA joined other animal welfare organizations in a letter to Whole Foods, writing that "Under the guise of compassion, Whole Foods is profiting from violence against animals." PETA co-founder Ingrid Newkirk also criticized Whole Foods' animal welfare, arguing that supposed welfare failures indicate a need for animal rights rather than welfare. Whole Foods has come under harsh criticism from abolitionist vegans such as Gary L. Francione who view the company's policies as a betrayal of the animal rights position.

Toxins

In February 2006, shareholders of Whole Foods filed a resolution asking Whole Foods to report toxic chemicals found in its products. Substances such as Bisphenol A (BPA), found in products such as baby bottles and children's cups, are controversial. Whole Foods no longer sells baby bottles and children's cups made with BPA.

In the wake of concern over the safety of seafood imports from China, on July 10, 2007, The Washington Post reported that Whole Foods imports a small amount of frozen shrimp from China, accounting for less than 2% of the company's total seafood sales. A Whole Foods spokesperson addressed the issue, saying, "We're not concerned about the less than 2 percent. It's business as usual for us."

In September 2018, Whole Foods was ordered to pay $1,643,500 due to "mishandling of hazardous wastes and materials included batteries, electronic devices, ignitable liquids, aerosol products, cleaning agents, and other flammable, reactive, and toxic materials" at its California stores over the prior five years.

Public image and legal issues

Whole Foods Market is considered anti-labor by most worker organizations, and it has been criticized that its products may not be as progressive as they are touted to be. Author Michael Pollan has contended that the supermarket chain has done well in expanding the organic market but has done so at the cost of local foods, regional producers, and distributors. Parts of the debate have taken place publicly through a series of letters between Pollan and Whole Foods CEO John Mackey.

Ronnie Cummins, national director of the United States Organic Consumers Association, opined that "Whole Foods Market 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." Similarly, researcher Stacy Mitchell of the New Rules Project argues that the corporation's aggressive marketing of local food is more hype than substance.

Whole Foods has frequently been the subject of resistance or boycotts in response to proposed store locations. The corporation has also been criticized for its aggressive policy of promoting its own in-house brands (e.g., 365) at the expense of smaller or local independent brands.

On August 11, 2009, Whole Foods co-founder and CEO John Mackey published an editorial in The Wall Street Journal criticizing the Patient Protection and Affordable Care Act; the editorial was controversial in the natural foods community. On December 24, 2009, Mackey resigned from the position of chairman of the board of the company, a position he held since 1978. On his blog, he wrote, "John Elstrott will now take the title of Chairman of the Board, which will accurately reflect the authority and the responsibilities that he has had for many years." Mackey remains a member of the board of directors as of 2012. Whole Foods's current CEO is Jason Buechel.

The company has created other controversies at various times involving business practices, labor issues, product selection, and failure to support farmers and suppliers. In March 2013, Whole Foods promised to label GMO-containing products in North American stores by 2018. The company has drawn criticism for questionable science behind the claims of benefit of its products, including encouraging and selling drugs that are described to work under homeopathic principles.

Awards and recognition

Whole Foods Market was included in Fortune magazine's annual list of the "100 Best Companies to Work For" yearly from the list's inception in 1998 to being placed number 44 in 2014. The chain has also won a number of awards for social responsibility including a first-place ranking by Harris Interactive / The Wall Street Journal in 2006 and British trade magazine The Grocer named it the "World's Greatest Food Retailer" the same year. It has received past spots on the "100 Best Corporate Citizens" list published by Corporate Responsibility Officer. In 2014, Supermarket News ranked Whole Foods number 19 on its list of "Top 75 North American Retailers."

Labor relations and anti-union activism

Among its core values, the company lists "supporting team member happiness and excellence." The company maintains that its treatment of workers obviates the need for labor unions: At its U.S. stores, after 800 service hours, full-time workers are given an option to purchase health insurance coverage starting at $20 per paycheck for themselves, and spouse and dependent coverage for an additional charge.

Whole Foods' health insurance plan is notable for its high deductibles – $2000 for general medical expenses and $1000 for prescriptions. However, employees receive $300 to $1800 per year (depending on years of service) in personal wellness funds. Once an employee has met the deductibles, insurance covers 80% of general medical costs and prescriptions but not for any type of mental illness. CEO Mackey drew attention to the insurance program (offered through UnitedHealthcare in the US) for its employees in an op-ed in The Wall Street Journal. In the article he called his company's insurance plan a viable alternative to "Obamacare". Mackey summed up his antipathy toward universal coverage in his op-ed by stating:

A careful reading of both the Declaration of Independence and the Constitution will not reveal any intrinsic right to health care, food, or shelter. That's because there isn't any. This "right" has never existed in America.

A "Boycott Whole Foods" page on Facebook was created in response to John Mackey's position on health care.

Mackey, a libertarian, believes that unions facilitate an adversarial relationship between management and labor. An attempt at unionizing in Madison, Wisconsin, in 2002 was met with resistance from store management, and Labor activists accused whole Foods of union busting. Employees at the Madison store voted in favor of unionization. Whole Foods then refused to bargain with its employees. After a year, the company moved to decertify the union. Further attempts at unionizing Whole Foods Market stores have been unsuccessful. Whole Foods launched a nationwide campaign, requiring workers to attend "Union Awareness Training," complete with PowerPoint presentations.

Whole Foods was criticized for its refusal to support a campaign by the United Farm Workers (UFW) on behalf of agricultural workers laboring on strawberry farms. During the late 1990s, the UFW persuaded several supermarket chains to sign a pledge in support of improved wages and working conditions for strawberry pickers. Whole Foods chose instead to support the farm workers indirectly by holding a "National 5% Day" where five percent of that day's sales – $125,000 – was donated to organizations that provide social services to farmworkers.

Management system

Employee structure and culture

Whole Foods Market consists of twelve geographic regions, each with its own president, regional administrative team, store-level leadership, and store-level team members. A 4-tier hierarchy of employment exists within the Whole Foods Company: Store Employment, Facilities Employment, Regional Offices, and Global Headquarters.

Employee benefits and incentives

To help employees learn about products, the company has instituted a mentoring program and developed an online portal called "Whole Foods Market University" to aid in training. Internal parlance refers to "team leaders" instead of "managers," and stores sometimes offer prizes for competing teams. A 2014 analysis of 2012 figures found that Whole Foods Market was "among the least generous companies" in terms of its 401(k) savings program.

Whole Foods Market has an employee discount; while all employees are provided a standard base discount rate of 20% on all store purchases.

Company structure

Whole Foods Market is composed of seventeen companies, each specializing in a different product. In the 1990s, while new stores were being opened, other natural food chain stores were being acquired for horizontal integration. This led to the Federal Trade Commission challenging the eventual merger with Wild Oats on the basis that it violated antitrust laws, essentially eliminating competition and inflating prices in the health foods market.

Subsidiary companies and suppliers

Whole Foods Market is based on a system of decentralized buying. Each vendor is approved at the regional level for corporate standards such as being non-GMO and fair trade. Individual stores then decide which approved products to stock. They have a rolling ten-year distribution arrangement with UNFI.

365 by Whole Foods Market

In June 2015, the company announced a millennial-focused and more affordable version of its regular stores, called "365 By Whole Foods Market". In addition to using digital price tags, in-store communication was done through a smartphone app. The stores had the goal of zero waste, which included donating leftover food, using LED lights, and using carbon dioxide–powered refrigeration cases. Jeff Turnas was president of the division.

The first 365 By Whole Foods Market store opened in May 2016 in the Silver Lake neighborhood of Los Angeles. Only 12 stores had been opened by the time Amazon acquired its parent Whole Foods and growth of the chain was finally halted.

There were as many as twenty-two 365 stores under various stages of construction by early July 2017, progress at most of these construction sites came to a halt upon the news of the possible acquisition of the parent company by Amazon, and there was no information at the time if and when the construction at any of the building sites would resume.

In January 2019, it was announced that the 365 by Whole Foods Market concept would be discontinued, but the existing locations would remain open. The following month, it was announced that all existing 365 stores would be converted into regular Whole Foods stores by the end of the year.

Although the short-lived chain is long gone, the "365 by Whole Foods Market" moniker continues to be used by Whole Foods as a private label brand of low cost foods for both Whole Foods and Amazon.

Whole Foods Market Daily Shop

In March 2024, Whole Foods announced the roll out of a new chain of quick-shop-format stores in Manhattan later this year that is much smaller than previous formats by being between 7,000 square feet (650 m2) and 14,000 square feet (1,300 m2) in size and initially selling grab-and-go snacks, prepared foods including sandwiches, weekly essentials, seasonal produce, breads, alcohol, meat and seafood, and an in-store Juice & Java. Juice & Java would offer customers made-to-order drinks, such as coffee, tea and smoothies, as well as soups, sandwiches and desserts.

The new stores are going to be located in dense metropolitan areas.

This is not the first time that Whole Foods tried a small footprint concept. In 2019, Whole Foods previously trialed a short lived convenience store concept in Chelsea that was also called "Whole Foods Market Daily Shop".