The big news last June was that Amazon planned to purchase Whole Foods for $13.4 billion. This acquisition rocked the grocery industry, along with the morals of many Whole Foods shoppers (like myself) who felt justification in spending the high premium for convenient access to local and organic products – a hallmark of Whole Foods’ marketing pitch. But let’s be honest. Buying “local” at Whole Foods is a stretch. However, with it now being under new management of the largest online retailer in the world, there is no longer the cloak of “but all the stores are managed regionally” to hide behind. So what does the busy conscious food-consumer do? Is shopping at Whole Foods now no different than buying organic at Safeway? Rumor has it that Safeway prices are better and consumer demand is driving more and more organic options on to their shelves.
I smell an investigation!!
I’ll present here for you, my devoted audience of maybe two (thanks for reading Mom!), some information I’ve dug up on our two challengers: Whole Foods vs. Safeway. I’ll then venture out in to the wild to do some hands-on investigative journaling and report back my findings in my next post. Nancy Drew would be so proud.
Whole Foods Market An American supermarket chain that specializes in selling food products without artificial preservatives, colors, flavors, sweeteners, and hydrogenated fats. It has 473 stores in North America and the United Kingdom.
As mentioned above, Whole Foods was acquired by Amazon; the deal made final in August of 2017. The pledge to lower prices on best-selling grocery staples (think eggs, bananas, lettuce, apples, etc.) was upheld as promised and markdowns can be seen in stores nationwide. Amazon is also reportedly working on integrating a discount for Amazon Prime members who will receive “special savings and in-store benefits”. CEO of Amazon Worldwide Consumer, Jeff Wilke, said, “We’re determined to make healthy and organic food affordable for everyone. Everybody should be able to eat Whole Foods Market quality – we will lower prices without compromising Whole Foods Market’s long-held commitment to the highest standards.” Sounds good to me, but as we know, in our world of capitalism, anytime prices are cut, someone somewhere is picking up the tab. In this case, it seems like local brands are bearing the greatest brunt. Higher costs for shelf space, elevated minimum-sales requirements and new fees to have third-party hosted product demos are making it impossible for many small businesses with items on Whole Foods shelves to turn a profit. Lindsey Rosenberg, the CEO and founder of Cherryvale Farms, a supplier of baking mixes to Whole Foods told Business Insider, “It’s a whole new level of challenges for small brands. It’s either go big or go home now.”
While we may be saying a sad good-bye to our favorite local goods at Whole Foods (though I strongly encourage you to seek out other retailers that carry local brands), one thing set to remain intact is the 365 Everyday Value brand which is Whole Foods’ product line of low(ish) cost “natural” and organic goods.
Also sticking around is the feel-good ambience Whole Foods is famous for. I have to admit, I love the Whole Foods shopping experience. Perfect looking produce stocked high, lots of natural lighting and soft green tones, wide clean aisles and friendly employees who seem to always be standing right behind me when I have a question. It’s an art, really. But nothing speaks more to the Whole Foods marketing and design experience than their current homepage. I mean, who doesn’t want to ‘find their passion’ while picking up the groceries?
Safeway An American supermarket chain founded in 1915. It is a subsidiary of Albertsons after being acquired by private equity investors led by Cerberus Capital Management in January 2015. As of 2014, Safeway had a total of 1,335 stores in the United States and 195 in Mexico with its partnership with Casa Ley.
Couched as your everyday neighborhood market, Safeway is actually part of the 3rd largest grocery retailer by market share (first is WalMart with 14.5% of market share, second is Kroger with 7.17% and then Alberstons with 4.5%, according to GlobalData Retail, 2016). Taking a page from the Whole Foods playbook, in 2005 Safeway launched their own line of organic products, O Organics. This includes items like meat, eggs, dairy, produce, coffee and other prepared snack foods. Their claim is “to make high quality organics affordable and accessible to everyone, everywhere”. Sounding familiar? It’s a similar story to Whole Foods in that with the current supply and distribution model of these huge retail chains, there isn’t any room for small local farmers and businesses to get in to the game. Media Strategist Ali Hart put it well, “This sad fate of the American farmer does not bode well for the small organic players who have paved this path from niche to mainstream with innovative approaches; they created the demand that Safeway is now intent on meeting.”
Ok, good to know, but in the big picture buying organic is still better than buying conventional, right? And if we don’t have time, access or money to shop at a local famers market, which of these two food-retailing behemoths is the better option for good pricing and quality?
Don’t worry team. Jessamyn Wead is on the case. Stay tuned as the story is revealed…