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Retailer of the Year: Whole Foods Market

Whole Foods, the 2014 PLBuyer Retailer of the Year, continues to make unprecedented moves in its private labels and overall branding, fueling growth.

March 1, 2014
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Whole Foods Market might only currently sit at No. 30 on the PLBuyer Top 35 Private Label Retailers list, but this landmark retailer continues to make moves that will add significant momentum to its business—most notably in the areas of private label and overall retailer branding. When viewed collectively, these initiatives clearly illustrate Whole Foods as a top retailer to watch in the coming years.

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Whole Foods saw 15.8 percent sales growth from 2011 to 2012, hitting $11.7 billion for 2012. It then surpassed that total for fiscal year 2013, posting sales of $12.9 billion—a new high for the retailer—an increase of 10.2 percent over fiscal year 2012. For 2012, Whole Foods had an estimated $1.7 billion in private label sales.

The specialty grocery retailer operates 370+ stores across the United States, Canada and United Kingdom—and continues to expand.


Naturally Private Label

The chain has made significant strides with its private label lines of late, continuing its refinement of 365 Everyday Value, adding new products and working to position it as a budget-conscious alternative to its more-premium offerings. The line now consists of over 1,450 products, including around 650 organic options and 450 verified as non-GMO. And its Whole Foods Market store brand consistently features original, leading-edge, national-brand-better (NBB) products.

Overall, Whole Foods offers more than 2,600 natural and organic products under the Whole Foods Market, 365 Everyday Value and Whole Catch brands. Collectively, the lines span categories across the whole store, including OTC/healthcare, personal care and edible categories from shelf stable to refrigerated and frozen.

Natural and organic is a big draw for Whole Foods customers—and increasingly for shoppers in general. USDA reports that U.S. organic food sales were $28 billion in 2012, up 11 percent from 2011, and acreage dedicated to organic crops and livestock is on an upward trajectory. In October 2013, IRI reported that when natural and organic are grouped together, U.S. retail sales in 2012 accounted for $81.3 billion, up 13.5 percent—and this trend is projected to continue.

All Whole Foods private label lines maintain official formulation rubrics to keep products free of artificial flavorings, colorings, sweeteners, preservatives and hydrogenated fats.

Whole Foods is also taking a leading edge in the hotly contested non-GMO battle, vowing to require labeling of all products it carries that contain genetically modified ingredients by 2018. Whole Foods is the first national grocer to establish such a mandate. It set precedent for this move back in 2009 when it began testing all 365 Everyday Value store brand products for GMOs via the third-party nonprofit Non-GMO Project.

Whole Foods supports its private label lines through promotion and advertising. In one 365 Everyday Value promotion in October 2013, Whole Foods offered free products from the line during the grand opening of its Port Chester, N.Y. store—the chain’s 365th store—in addition to 365 Everyday Value discounts, samples and more. Whole Foods store openings routinely feature giveaways from its private label lines.

In 2013, Whole Foods also launched its “Hello 365” pilot program at select stores in Illinois, Indiana and Florida, designed to further cultivate loyalty to its 365 Everyday Value store brand products. Participants in the program receive a 10 percent discount on products in the line.

Whole Foods also strategically expanded into premium pet supplies with its Whole Paws line during 2013. The premium pet supplies category continues to grow. Pet-product spending is projected to hit over $55.5 billion in 2013 per the American Pet Products Association, up nearly 10 percent over the past two years. Products in the Whole Paws line, which replace the former pet products offered within the 365 Everyday Value line, encompass multiple styles of premium pet food and treats, including grain-free and weight-management products. Whole Foods formulated the products without use of corn, soy or beet sugar to err on the side of caution when it comes to GMOs.

 

Ongoing Expansion

All the while, Whole Foods continues to expand. Recent projections suggest Whole Foods is poised to eventually grow to 1,200 U.S. locations. In addition to multiple store openings across its operating territories, Whole Foods recently purchased seven former Dominick’s locations in Chicago and its surrounding suburbs—stores that were vacated when Safeway made the decision to exit the market at the end of 2013—which will bring the number of Whole Foods stores in the Chicago area to 28 by 2015.

Some store openings are, at first blush, a bit of a departure for Whole Foods. Expansion into the Midtown neighborhood of Detroit (opened in June 2013) and Englewood in Chicago (projected for 2016) acutely diversify Whole Foods’ approach to retailing within the specialty grocery channel, likely catalyzing new cross-channel approaches—and competition. When challenged with the suggestion that the residents of Englewood—a neighborhood with a median household income below $20,000—would likely be unable to afford to shop at Whole Foods, a company representative pointed to its 365 Everyday Value line, noting that it is “very competitively priced with conventional supermarkets.”

Whole Foods also fosters organic growth within its supply chain, positioning itself to continually expand its regional and local grocery options through its successful Local Producer Loan Program. At the beginning of 2014, Whole Foods added $15 million to the fund to supplement its initial $10 million investment back in 2006. Whole Foods’ connection to these local and regional producers likely factors into ongoing decision-making related to corporate strategies for shelving and in-store foodservice, including private label and overall store branding—and helps point a signifying direction for the industry.


Emotional Branding

Whole Foods has long understood the value in connecting emotionally with its shopper base. In February 2014, the retailer announced the creation of the Whole Cities Foundation, a nonprofit organization dedicated to supporting efforts to increase access to nutritious, fresh food and health education in underserved communities, committing $1 million to jumpstart the initiative. Key goals of the organization include establishing grant programs and developing integrated community health outreach models with partner organizations in key markets throughout the country.

Whole Foods has long understood the value in connecting emotionally with its shopper base. 

The foundation’s first collaboration was with the ReFresh Project in New Orleans, which strives to eliminate food deserts, revitalize neighborhoods and build healthier communities. This collaboration involved transforming a former Schwegmann’s supermarket building in Mid-City New Orleans—one that had remained vacant since 2005’s Hurricane Katrina—to house a new Whole Foods Market, along with a café and a new home for Tulane University’s Goldring Center for Culinary Medicine. That Whole Foods location opened its doors in early February.


Diversified Content

Whole Foods has a notable media presence. Its magazine, The Whole Deal, is available online and in stores, and the retailer’s website offers up its significant online presence via blogs, original content, recipes and a gateway to its activity on social networks like Twitter and Facebook. The retailer also offers a subscription-based web video cooking magazine, Panna, that’s also optimized for viewing on mobile devices. The content here features well-known chefs like Rick Bayless, Nancy Silverton, Jonathan Waxman and Anita Lo demonstrating recipes.

Now Whole Foods has launched a broadcast component to its branding. Along with the Pivot television network, Whole Foods Market has launched a television series, “Dark Rye.”  The series originated as an online magazine started by Whole Foods in 2012, winning a prestigious James Beard Award in 2013 (it’s available online and via iPad app). Like the magazine, the TV series offshoot promises to “explore food, health, sustainability, design, technology and social enterprise.” The first season of the show will highlight topics ranging from artists seeking social justice to entrepreneurs rebuilding Detroit and culinary figures and how they’re working to maintain sustainable food traditions.

 Each of these myriad initiatives seamlessly factors into the overall branding of Whole Foods Market. They continually tell the Whole Foods story, a tale that includes an increasing number of shoppers who intentionally align themselves with natural and organic tenets. The principals of this story neatly play off each other and find life via the products the retailer’s shopper base places in their basket, a product mix that certainly includes some national brands, but will progressively see a stronger ratio of Whole Foods store brands—the quintessential embodiment of the Whole Foods philosophy—as the months and years progress.   


A Look Inside Whole Foods Market Private Label

Whole Foods Market offers over 2,600 natural and organic products under its private label brands ranging from everyday staples to convenient entertaining options, personal care and household products, pet products and beyond.

 

Selections from 365 Everyday Value:

• Protein & Fiber Crunch Cereal

• Ancient Grains Hot Cereal

• Organic Apple Cinnamon Mini Waffles

• Creamy Cashew Butter

• Organic Breakfast Blend City Roast Single-Serve Coffee

• Crinkle Cut Sweet Potato Fries

• Organic Spinach & Feta Individual Size Pizza

• Southwestern Meatless Burgers Spicy

• Organic Tomato Ketchup

• Blackened Cajun Spice

• Vegan Cane Sugar

• Organic Chia Seeds

• Organic Hojiblanca Extra Virgin Olive Oil

• All Natural Cherry Vanilla Creme Soda

• Organic Honeycrisp Apple Juice

• Mango & Pineapple Blended Fruit Bars

• Pumpkin Ice Cream

• Organic Dark Chocolate With Almonds

• Real Hardwood Charcoal

• Maximum Moisture Lotion

• Pomegranate & Red Currant Moisture Soap

• Complete Body Cleanse

• Wipes Travel Pack

• Simple Digestive Formula

• Kids Gummy Fruits Chewy Multivitamins


Selections from Whole Foods Market:

• Potato & Pea Samosas

• Uncured Bacon Wrapped Shrimp

• Spanakopita

• Gnocchi di Polenta with Peas & Kale

• Fettuccine Alfredo con Funghi

• Wood-Fired Pizza Buffalo Mozzarella with Cherry Tomatoes

• Organic Ziti

• Caramelized Panna Cotta

• Chocolate Chip Lava Cookies

• Caramel Apple Blossoms

• French Fleur de Sel Caramels

• Lime Italian Sparkling Mineral Water

• Citrus All Purpose Cleaner


Selections from Whole Catch:

• Alaskan Salmon Seafood Burgers

• Buffalo Shrimp

• Wild Mahi Mahi Fillets


Selections from Whole Paws:

• Salmon & Sweet Potato Grain-Free Maintenance Dog Formula

• Chicken & Brown Rice Healthy Weight Dog Formula

• Peanut Butter & Molasses Glucosamine Crème Dog Treats

• Chicken & Brown Rice Indoor Cat Formula

• Shredded Whitefish, Chicken & Tuna Dinner in Gravy Cat Food

 

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Recent Articles by Douglas J. Peckenpaugh

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