Whole Foods Rev 8

Download Whole Foods Rev 8

Post on 07-Apr-2018

214 views

Category:

Documents

0 download

Embed Size (px)

TRANSCRIPT

  • 8/6/2019 Whole Foods Rev 8

    1/16

    1

  • 8/6/2019 Whole Foods Rev 8

    2/16

    2

  • 8/6/2019 Whole Foods Rev 8

    3/16

    365 EverydayValue

    Productscanfillyourpantrywithoutemptyingyourpocketbook Valuepriceseverydayoftheyear

    Meetall qualitystandards,comeinbothnaturalandorganicselections:wholegrainfloursandshadegrowncoffeetoorganicmilkandfrozenveggies

    Makeiteasytostockuponthebestproductsforthebestprice

    WholeFoodsMarket

    NonperishablegoodsandbodycareproductsProductsarecarefullyselectedforexceptionaltaste,authenticityandremarkablequality.Fromsmallbatch,artisanrecipestoexoticflavors,thevarietyofourproductswillexpandyourculinaryvocabulary.Withnaturalandorganicchoices,wehavemoreuniqueandexquisiteproductsindevelopment.

    Regu ations,En orcement Qua ity

    As leadingretaileroforganicfoods,helpedformulatetheNationalOrganicasthesoleretail

    representativeontheNationalOrganicStandardsBoard.

    Thishandsonapproachallowsourvisionofasustainablefuturetoberepresentedinthedefinition,construction,andenforcementofsustainablelegislationandregulation.Ourdesireforclearandstraightforwardanswersandregulatorytransparencydirectlyassistsindividualsandgroupsseekingaccountabilityfromtheirelectedandnonelectedofficialsonissuesdirectlyrelatedtoorganicsandsustainability.

    Inconjunctiontoworkingwithfarmersonalternativesandeducatingourconsumersabouttheharmfuleffectsofsomepesticides,wearetheonlyretailerthatparticipatedinthejointEPA/USDAToleranceReassessmentAdvisoryCommittee.Thetaskofthismultistakeholderadvisoryboardwastoadvisethoseagencieshowtheyshouldfairlyreassessallthepesticides 3

  • 8/6/2019 Whole Foods Rev 8

    4/16

    2009organicsmarket:26.6billion

    Organicsare2.5%ofU.S.food/beveragesales

    5075%ofU.S. consumersbuyorganicatleastoccasionally

    Evenin200373%ofconventionalgrocerystoresofferedsomeorganicselection,we

    assumethatstatistichasrisenasoftoday(CatherineGreeneandCarolynDimitri(2003)."OrganicAgriculture:GainingGround".USDAEconomicResearchService) SourcingfromChinarequiresaseriesofcertifying

    agenciesinvolvementandontheground

    verificationandproducttestingprocedures totake

    lace.

    WholeFoodsMarketGoal

    Provideinformedconsumerchoicewithregardtogeneticallyengineeredingredients

    or(GMOs/GeneticallyModifiedOrganisms)throughsupportoforganicagriculture&

    commitmenttosource365EverydayValueandWholeFoodsMarketbrandproducts

    toavoidGMOs.

    Values

    Wearepermanentlycommittedtobuyingfromlocalproducerswhosefruitsand

    vegetablesmeetourhighqualitystandards,particularlythosewhofarmorganically

    4

  • 8/6/2019 Whole Foods Rev 8

    5/16

    Individual Stores

    Fallunderbatchprocesswithmediumcustomizationandvolume

    365EverydayValuebrand

    Offeredateverystorewith minimaltonocustomization

    Sourcedfromsmallersuppliersgloballyinsteadoflocallytomeetscale

    Supply Chain shortcoming:Sourcing logisticsarevariableandregionally specificeven

    though365 EverydayValue productsaremadeinhighvolumewithlow

    customization.

    5

  • 8/6/2019 Whole Foods Rev 8

    6/16

    1. Increasingcompetitionwithmainstreamgroceryretailers

    WholeFoodscompetitiveadvantageofqualitytrustandreliabilityatrisk

    QualityStandards

    Carrynaturalandorganicproducts:unadulteratedbyartificialadditives,

    sweeteners,colorings,andpreservatives

    Evaluatequalityintermsofnutrition,freshness,appearance,andtaste

    Sellthehighestqualityfoodswecanfindatthemostcompetitivepricespossible.

    Neverendingprocessfor thecarefuljudgmentofbuyersthroughoutthecompany.

    Carefullyevaluateeachandeveryproductfor sale

    Fresh,wholesomeandsafetoeat

    Seekoutandpromoteorganicallygrownfoods

    2.Globalsourcingallowsflexibilityintheirproductiontobetterrespondtomarket

    demand butalsoveersfromtheirmission animportantsellingpointformanyof

    itsloyalcustomers

    Environmental LocalMessage

    Reducetheenvironmentalimpactandcostsoftransportingproduct

    Makegreenchoices:LocalProducerLoanProgram(LPLP)providesupto$10million 6

  • 8/6/2019 Whole Foods Rev 8

    7/16

    CertifiedOrganic: CertifiedbyaUSDAfullyaccreditedprivatecertifyingagencyorastategovernmentagency

    100%OrganicProduct Mustcontainonlyorganicallyproducedmaterial,excludingwaterandsalt

    Nameofthecertifyingagentmustappearonpackages

    UseoftheUSDA"organic"sealisoptional

    Organ cPro uct Mustbeatleast95%organicallyproducedingredients

    RemaindermustconsistofnonagriculturalsubstancesapprovedontheUSDA'sNationalListofnonorganicallyproducedagriculturalproductsthatarenotcommerciallyavailableinorganicform

    Nameofthecertifyingagentmustappearonpackages

    UseoftheUSDA"organic"sealisoptional

    MadewithOrganicIngredients Productmustcontainatleast70%organicingredients.

    Remaindercanconsistofconventionallygrownagriculturalingredients

    Productmaydisplaytheterm"MadeWithOrganic...

    Thenameofthecertifyingagentmustappearonpackages.

    UseoftheUSDA"organic"sealisprohibited.

    CertifyingOrganic

    Whatisorganic 7

  • 8/6/2019 Whole Foods Rev 8

    8/16

    HistoryofU.S.OrganicStandards:

    OrganicFoodsProductionAct1990

    Responsibilityfordevelopingnationalstandardsfororganicallyproducedagriculturalproducts

    ResultedinNationalOrganicProgram(NOP)

    MarketingprogramofUSDAsAgriculturalMarketingService

    Standardssetby15memberNationalOrganicStandardsBoard

    Organicstandardsandcertificationprocessimplementedin2002

    Production Handling

    Labeling

    Certificationishandledbystate,nonprofitandprivateagenciesthathavebeenapprovedbythe USDepartmentofAgriculture (USDA).

    ConcernedCitizensSafeguardOrganic

    Severalcitizengroupspredateorganicstandards, 8

  • 8/6/2019 Whole Foods Rev 8

    9/16

    9

  • 8/6/2019 Whole Foods Rev 8

    10/16

    ExcerptfromOfficialWholeFoodsBlog

    OurstrategyisnottorunawayfromourChinesesuppliers,buttotakeastandand

    getclosertooursuppliers.Wewillcontinuetoimproveontheauditandtesting

    procedures

    that

    are

    already

    in

    place OrganicfarminghasalonghistoryinChina

    Astheworldpopulationgrows,wearegoingtobeforcedtolookatoursupply

    chainsanddevelopemergingorganicsuppliersallovertheworld

    Overall,WholeFoodshasdoneapoorjobofcommunicatingtheCOOtoitsshoppers.

    Consumersfeelmisledanddisliketheideaofpayingpremiumprices(althoughits

    thelowerendofthepricerange)fororganicfoodmadeinChina.

    Consumersolutionfromecomatters bloggerKevinMcCann

    10

  • 8/6/2019 Whole Foods Rev 8

    11/16

    Pro:HighgrowthrateintheorganicmarketinChina

    impliesahugeopportunityforWholeFoods,ifithasplantoexpandstorestoChina. Chinascostsadvantage

    inproducingorganicfood.

    Con:ManipulationofcertificationprocessinChina.Chinasproductsecurityissuesmayunfavorablyaffect

    WholeFoodsbrandvalue.

    11

  • 8/6/2019 Whole Foods Rev 8

    12/16

    WholeFoodshastobalancethebenefitsofreducedcosts andaccessingthe

    Chinesemarketwiththepotentialpitfallsofinsufficientproductverificationand

    quality

    TheChinese marketisburgeoning:onboththesupplyanddemandsides

    The switching

    costs

    are

    great

    lose

    what

    has

    already

    been

    invested

    in

    China,

    andhavetobuildinfrastructureelsewhere(again).

    andhandledaccordingtotheorganic standardsregulationsfacea(civil)

    penaltyupto$10,000perviolationintheU.S.(OTA)

    TakeanactiveroletostayinChina

    *Build localentitypartnerships

    Fostergoodrelationswithprovincialgovernmentsandregulatory

    bodies

    so

    they

    enforce

    organic

    regulations

    for

    WF,

    vs.

    accepting

    bribes

    or

    beingotherwiseunsupportiveofthelocalfoodmarket

    Buildstrongtieswithgovernmentagriculturalextensionagentsso

    theyhavethecapacityandwillingnesstoprovidetechnicalassistanceto

    farmersinterestedinorganic

    *Partnerwithlocalfarmersgroups

    ScaleissmallerthanWalMart etc.,butpartnershipwithsmalland

    mediumsizedfarmscanstillbuildequitablepartnership,effectivescaleto

    enablesteadysupply,andmaintainWFlocalfocus 12

  • 8/6/2019 Whole Foods Rev 8

    13/16

    Keytakeaways fromWholeFoodsdilemma regardingChinesestandardsverification

    impactingits365organicbrandedproducts

    Lessonsareapplicableparticularly toChina,alsotootheremerginganddeveloping

    markets,andeventoanynewsupplier:

    Complexity: lowcostlabororproductiondoesnotnecessarilymeanlowtotalcost,

    , ,

    coordinationcosts

    Understandingthelocalcontextiskey: howthemarketworks,whatmaterialsare

    easilyavailableinit,whoaretheactorsandwhydotheyactthewaytheydo,howto

    communicatewiththem

    Branding: ensurealignmentbetweencompanymissionandsupplychain andnot

    onlyreality,buthowthatisperceived(whichispotentiallyirrational);mitigatebrand

    issuesproactivelyandhonestly,aspartialtruthswilllikelybeairedeventually

    Obstaclesmaybecommunicationorcapitalbased: foreither,investmentis

    required.Investmentinownedorpartnerfacilities/capabilitiesabroad,butalsoin

    homecapacitytointeractwithglobalaspectsofoperations

    13

  • 8/6/2019 Whole Foods Rev 8

    14/16

    14

  • 8/6/2019 Whole Foods Rev 8

    15/16

    Background

    Opene inAustin,Texas:19emp oyees

    LessthanhalfadozennaturalfoodsupermarketsintheUnitedStatesatpoint ofmerger

    Rapidgrowth&acquisitionsthroughoutthe90'sandforward

    Lastacquisitionin1997wasofWildOats,109storesin23statesandBritishColumbia,Canada

    Publiclytradedcompany,current MarketCAP:6.43B

    Every

    single

    store

    is

    unique Geographic Locations:

    200,000peopleormoreina20minutedrivetime

    Largecollegeeducatedpopulation

    Abundantparkingavailableforexclusiveuse

    Motto:WholeFoods WholePeople WholePlanet

    Mission

    CalledtheirDeclarationofIndependence,createdin1985lastupdated1997:

    Qualityisastateofmind:highestquality,leastprocessed,mostflavorfulandnaturalfoodspossible

    Gotoextraordinarylengthstosatisfyanddelightourcustomers

    Togrow atapacethatqualityofworkenvironment,TeamMemberproductivityandexcellence,customersatisfaction,andfinancialhealthcontinuetoprosper

    Balancestore needswiththeneedsoftheplanetthrough:

    Supportingsustainableagriculture committedtogreaterproductionoforganicallyandbiodynamically grownfoodsinordertoreducepesticideuseandpromotesoilconservation.

    Reducingwasteandconsumptionofnonrenewableresources.(promoteandparticipateinrecyclingro rams reusable acka in reduced acka in andwaterandener conservation

    CoreValues

    SellingtheHighestQualityNaturalandOrganicProductsAvailable

    SatisfyingandDelightingOurCustomers

    SupportingTeamMemberHappinessandExcellence

    CreatingWealthThroughProfits&Growth

    CaringaboutourCommunities&OurEnvironment 15

  • 8/6/2019 Whole Foods Rev 8

    16/16

    16