Whole Foods Market Columbia College Chicago Spring, 2015
Situation Analysis Part 2: The Brand/Product Analysis Company: Whole Foods Market, Inc. NASDAQ Global: WFM Company Category: Natural and Organic Food Supermarket Founders: John Mackey and Renee Lawson owners of SaferWay Natural Foods, and Craig Weller and Mark Skiles, Owners of Clarksville Natural Grocery Year Founded: 1980 Headquarters: Austin, Texas Company Motto: “America’s Healthiest Grocery Store” Company Logo:
Company Overview Whole Foods Market owns and operates the world’s leading chain of natural and organic food supermarkets. Each store breaks down into 12-13 departments with product offerings from Grocery (bulk, frozen, dairy, including in-house 365 Everyday Value Brand), Prepared Foods (hot production, cold production, and Catering), Produce, Specialty (beer, wine and cheese), Bakery, Coffee/Juice Bar, Meat, Seafood, and Whole Body [8].
The Brand
Whole Foods Market has done their homework. Before you enter the store, they have done all the heavy lifting on ingredients for you by offering only the highest quality natural and organic products. Whole Foods Market believes that people have the right to know what is in their food. “It’s true that natural and organic products are increasingly available in stores and online, yet no one does what we do. We hold the idea of food to a higher standard, banning more than 75 ingredients commonly found in other stores, and we believe our unparalleled quality standards and selection are a large part of why we maintain a broad base of loyal customers and attract new customers aspiring to a natural and organic lifestyle” [4]. 1.
Product Attributes
•
•
Each and every product offered is carefully evaluated; third party auditors inspect the stores every month to hold the company accountable for their set standards Foods featured are free from artificial preservatives, colors, flavors, sweeteners and hydrogenated fats Foods are fresh, wholesome and safe to eat
1.
Product Attributes (con’t)
•
Provide food and nutritional products that support health and well-being Organically grown foods and are sought out and promoted
•
•
Products containing only organically produced ingredients; products may display the USDA organic seal
•
Organic = Products consisting of ingredients that are at least 95% organically grown, products can display the USDA organic seal Made with Organic = Products consisting of ingredients that are 70 – 95% organically grown; products cannot display the USDA organic seal Natural = Whole Foods Market definition of ‘natural’ is products produced without artificial preservatives, colors, flavors, sweeteners and hydrogenated fats
Health Starts Here is Whole Foods’ in-house healthprogram. Within the program, the definition of healthy eating is based on the following four key elements:
o
o
o
o
Plant-Strong Emphasize fresh vegetables, both raw and cooked; fruits; legumes/beans; nuts; seeds and whole grains Eat a colorful variety of plants to ensure you’re getting the best nutrients for your body, which leads to feeling satiated Whole Foods Choose foods that are real, fresh, natural, organic, local, seasonal and unprocessed Eliminate the consumption of refined, highly processed foods and foods void of nutrients, such as artificial flavorings, colors, preservatives, sweeteners and hydrogenated fats Healthy Fats Get your healthy fats from plant sources, such as nuts and avocados Minimize extracted oils and processed fats reduce or eliminate consumption of animal products; choose leaner meat and poultry Nutrient Dense Choose foods with a high nutrient density, foods that are rich in nutrients when compared to their total caloric content Build your menus around plant-based foods to emphasize highly nutrient-dense meals
Choose foods with a wide spectrum of vitamins, minerals, phytonutrients and antioxidants
B. Pricing “Our goal is to sell the highest-quality natural and organic products that also offer high value for our customers. High value is a product of high quality at a competitive price. Our product quality standards focus on ingredients, freshness, taste, nutritive value, safety and/or appearance”
Competitive Pricing Sarah McColl’s article on ‘Whole Paycheck’ best explains Whole Foods competitive pricing within its market. “Whole Paycheck” may be a thing of the past.The lessthan-loving nickname for Whole Foods has been around for at least a decade, but thanks to some changes at the grocery store it may no longer apply” [4].
Price Comparing [2] Whole Foods Market Joe’s KashiGoLean $3.49 KashiGoLean $3.69 Fage Greek Yogurt $3.00 Greek Yogurt $3.59 Soymilk $1.69 $2.19
Vs.
Trader
Fage Soymilk
B. Pricing (con’t) Tips for Shopping on the Cheap at Whole Foods:
•
•
•
Sign up for the email newsletter. Local specials and news (party in the rooftop garden!) are delivered to your inbox, meaning you can plan how you want to incorporate organic red grapes into a weekly meal plan before you get to the grocery store. (You’re also entered to win a $50 gift card when you sign up, so there’s that) [4]. Shop the sales. Check out old-fashioned print-and-clip coupons and The Whole Deal, available online and in stores. (There’s a Canadian edition too.) Recent specials included $2 off wild-caught frozen fish fillets or steaks and $1 off trail mix [4]. Shop your values (where you can afford it). Pole-caught tuna might always be more expensive than conventional net-caught tuna, but if sustainable seafood, organic chard, and cage-free eggs are important to you—and your budget allows it—Whole Foods is the place where these items are regularly a relative bargain and frequently go on sale. At the Brooklyn store, pole-caught tuna was recently on sale for two for $4. It makes sense: As Slate explains, there’s no reason to expect a conventional grocery store to have a price advantage on the kind of products that are Whole Foods’ specialty. This is where Whole Foods store brands 365 Everyday Value and 365 Everyday Value Organic can really shine [4]. o
• • • •
•
• • • • • • • •
What to add to your cart:
Organic Milk Shredded Mozzarella Cream Cheese Organic frozen vegetables When blogger Lisa Johnson shopped exclusively from Whole Foods using the USDA’s “thrifty” food budget of $16.31 per day for her family of three, she relied heavily on frozen veggies: “We wouldn’t have made it, frankly, without them.” Sweeteners Check out the prices on light brown sugar and organic powdered sugar, as well as maple syrup and organic raw agave nectar. Organic Chicken Broth Organic Coconut Oil Olive Oil Grains Not all grains at Whole Foods are cheap, but check the prices on organic quinoa, buckwheat, and jasmine rice. Pasta Peanut Butter Organic Popcorn Roasted whole nuts The bulk bins don’t necessarily mean bargains (look alive, shelled pistachios), but check out the prices on almonds and cashews.
•
Energy bars [4]
Pricing Summary Whole Foods Market continues to expand their value offerings across their stores which has in turn narrowed the pricing gap between them and their competitors. Whole Foods products are accessible to people with high incomes to low incomes. The idea of Whole Foods Market as “Whole Paycheck� is fading away because they have prices head-to-head matching prices at other grocery brands such as Safeway [2]. We improved our price image and continue to raise the bar even higher on our standards of transparency. We are the only U.S. public food retailer to date to commit to labeling products with GMO ingredients and we also announced a new rating system for fresh produce and floral to measure performance on important sustainable farming topics, including pest management, farm work welfare, and pollinator protection [2].
Presented below comparison is based on 10 staple type foods like ketchup, apples, pasta sauce, milk, and a loaf of bread, and there is also something for the kids like Tater Tots.
[2]Pricing based on stores in San Mateo County, CA.
C. Promotion Marketing Each Whole Foods Market store has a Marketing Department Team unique to each store - they are responsible for creating the vibe of the store, bringing the personalities of the workers to life, designing the store to fit the community, and incorporating their interpretation of company values into each store. The Marketing Department does sign-making, event planning, and social media for their store [8].
Promotional Programs • •
Adult and kid’s cooking classes Health Starts Here Program o
There are many Health Starts Here offerings online and around the company, including: Healthy Starts Here page on the public website, wholefoodsmarket.com, providing recipes, links to gettingstarted program sites, cooking demonstrations and more In-store Healthy Eating Specialists Prepared Foods offerings Customer and Team Member healthy eating lectures and cooking classes Customer and Team Member healthy eating supper clubs, providing opportunities to share food with and learn from like-minded people pursuing similar goals Health Starts Here overview brochure (featuring the two getting-started program options) Healthy Eating Program core books (in all stores) Team Member Healthy Discount Incentive Program Total Health Immersion Program [11]
Social Media/Engagement • • • •
Facebook page Twitter Whole Foods Market App Customize your Whole Foods Market page (www.wholefoodsmarket.com) by choosing your store
Advertising
[11]
Advertising (con’t) •
Whole Foods Market launched its first ever national brand campaign “Values Matter,” on October 20, 2014 to highlight its groundbreaking quality standards, healthy offerings and key milestones as a pioneer in the natural and organic food industry. By communicating the company’s deeper purpose and its history of celebrating food and the people who produce it, the multichannel advertising initiative will
•
demonstrate the values of “America’s Healthiest Grocery Store” [8]. “Whole Foods Market has been subtly telling our story for decades, and now is the time to overtly communicate what we’ve spent more than 35 years creating as change agents in the food world,” says Jeannine D’Addario, Whole Foods Market’s Global Vice President of Communications. “We are excited to share our stories, and to have deeper conversations with our customers so they can make meaningful choices about what they decide to buy and support” [8].
“Not everyone knows what makes Whole Foods Market different from other grocers, or the fact that no other retailer has standards as demanding or as transparent as ours,” D’Addario said. “This campaign will distinguish what makes our brand special, our food different and our quality superior. It’s our opportunity to reaffirm our unwavering commitments to our core values, which are at the heart of our brand” [8].
Whole Foods’ Position in the Market •
“America’s Healthiest Grocery Store” [8]
Services Offered •
•
•
•
ApplePay: Apple Pay is the new way of making transactions easier for the customers that are on the go. When the customer adds a credit or debit card with Apple Pay, the actual card numbers are not stored on the device nor on Apple’s servers. Each transaction is authorized with a one-time unique dynamic security code [11]. Catering and Delivery: If you go on the Whole Foods Market website there is an option for catering, whether it is breakfast, lunch, or dinner [11]. Instacart: You can build your shopping cart online and have it delivered. Recent Press Release stated that Instacart is offering Valentine Flowers delivered in as little as an hour across the 15 metros. Prices starting at $25. You can receive free delivery on the first order, after it’s $3.99 for 2 hour delivery or $5.99 for one hour [11]. Not Sure if You Want to Commit to Buying? Try it Out: Whole Foods will do an “It’s On Us” for any product that you want to try out.
The will also accept products back for full refund if it was not what you were expecting or up to the standard you were expecting [11].
Brand Equity • •
•
Brand Equity is the set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service. Whole Food’s brand equity is all about the “Whole Foods experience.” You experience their motto Whole Food, Whole People, Whole Planet with every trip to the store. According to 2014 Harris Poll EquiTrend (EQ) study measured brand equity for more than 1,500 brands across 170 categories, finds traditional grocery store brands rank highest overall in three of
Brand Equity (con’t) •
•
•
the four regions surveyed. The EQ index examines three key factors of brand equity: familiarity, quality and purchase consideration. Whole Foods ranked above category average in the Northeast Region Grocery Store as well as in the South Region and West Region. In 2012 based on the Store Choice Drivers study run by Nielsen on identifying store characteristics that help build equity with shoppers, Whole Foods Market and Trader Joe's were the only national brands to rank above the category average in all four regions of the US. They managed to keep consistently strong quality and purchase consideration scores. Consumers who are familiar with Whole Foods brand give us strong marks for quality and purchase consideration. We put great emphasis on building a relationship with the customer. we want customers to have a confidence in what they find in our store therefore we strive to bring natural, organic and always fresh selection to them in order to ensure excellent customer satisfaction [12].