{"id":7440,"date":"2015-12-09T23:54:20","date_gmt":"2015-12-10T04:54:20","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/whole-foods-market-healthy-foods-with-a-healthy-profit\/"},"modified":"2015-12-09T23:56:04","modified_gmt":"2015-12-10T04:56:04","slug":"whole-foods-market-healthy-products-with-a-healthy-profit","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/whole-foods-market-healthy-products-with-a-healthy-profit\/","title":{"rendered":"Whole Foods Market: Healthy Products with a Healthy Profit"},"content":{"rendered":"

Whole Foods Market, Inc.<\/strong><\/p>\n

\"organic-zone\"<\/p>\n

The Whole Foods Market, Inc. (\u201cWhole Foods\u201d) motto of \u201cWhole Foods, Whole People, Whole Planet\u201d rings true in every aspect of the company.\u00a0 As a premium food retailer, Whole Foods does an excellent job of aligning its business model with its operating model.\u00a0 The 2014 Bain & Company report, \u201cWinning operating models that convert strategy to results\u201d, states that companies with strong operating models aligned with business strategy consistently outperform their competition (1.2% higher revenue growth and 2.6% higher EBIT growth over five years).\u00a0 By empowering the customer, building selective supplier relationships, creating impact in the community, and investing in their employee base, Whole Foods has become a market leader in the U.S. based grocery store market.<\/p>\n

 <\/p>\n

Business Model\"-1x-1\"<\/strong><\/p>\n

Founded in 1980 by John Mackey and his then girlfriend Renee Lawson, Whole Foods was started as one small natural food store in Austin, Texas. \u00a0As of September 15th<\/sup>, the company has expanded to over 430 stores and employs over 90,000 people across the United States, Canada and the United Kingdom. \u00a0Whole Foods core value is to \u201csupport the health, well-being, and healing of both people \u2014 customers, Team Members, and business organizations in general \u2014 and the planet\u201d.\u00a0 The company primarily executes this strategy by selling high quality organic, natural, and\/or local-based grocery store products (food, health care items, cleaning supplies, etc.) to the increasingly health conscious consumer, and with annual revenues of $14.2bn, the company has a strong future ahead.<\/p>\n

 <\/p>\n

Operating\u00a0Model<\/strong><\/p>\n

Whole Foods is able to succeed with this business model due to its focused and well executed operating model which focuses on improving everyone they interact with: customers, suppliers, employees, and their local community members.<\/p>\n

Educating the Consumer<\/em> \u2013 Whole Foods strives to sell top quality products to its customers, but the business model does not work unless you create systems to show the differences in quality and sustainability.\u00a0 The company has implemented rating systems on everything from meats and produce to beauty products, and it does not carry food items with certain types of ingredients, like MSG (monosodium glutamate). With meat, the company uses the 5-Step\u00ae Animal Welfare Rating Program designed by the Global Animal Partnership (see picture), and it also has similar methods to measure fish on quality and sustainability.\u00a0 Whole Foods creates its own systems for items like fresh produce and flowers (see pictures and video).\u00a0 By educating the customer, the company is not only helping the customer make the right decision in the store, but it is also making the business model more effective.<\/p>\n

\"TheSteps\"<\/a>\"'ResponsiblyGrown_Poster_Infographic.jpg'\"<\/a>\"'ResponsiblyGrown_Poster_Overview.jpg'\"<\/a><\/p>\n

 <\/p>\n

https:\/\/youtu.be\/8eDKFWHVFdk<\/a><\/p>\n

Purchasing from Suppliers<\/em> \u2013 Whole Foods sources its food from local, regional and national wholesale suppliers, but it focuses regionally and locally where it can. \u00a0Some stores even have a \u201cforager\u201d whose sole job is to source environmentally friendly foods from neighboring farms.\u00a0 One of the most successful programs in purchasing is the Whole Trade\u00a0Guarantee.\u00a0 This program focuses on responsibly sourcing products in a way that is environmentally friendly without lowering the quality. \u00a01% of the profits go to support the Whole Plant Foundation which focuses on community development (see video below).\u00a0 Improving the quality of the farms directly increases the quality of the products that Whole Foods can sell.\u00a0 Everyone wins.<\/p>\n

https:\/\/youtu.be\/Xxz_WxzmuvE<\/a><\/p>\n

Improving their Communities<\/em> \u2013 Whole Foods Market donates up to 5% of its store profit to charity through a number of charities like the Whole Cities Foundation.\u00a0 This foundation focuses on bringing healthy eating habits and options to people in urban food deserts. Improving the lives of the people in its communities is crucial to it operating model, and it can also lay the groundwork\u00a0for future customers. \u00a0For more information, click here:\u00a0https:\/\/www.wholecitiesfoundation.org.<\/p>\n

Investing in its Employees<\/em> \u2013 For over 15 years, Whole Foods has been ranked as one of the top companies to work for by Forbes, and it\u2019s not hard to figure out why.\u00a0 The company does the following:<\/p>\n