Whole Foods: Balancing Social Mission and Growth

Case 1

Whole Foods: Balancing Social Mission and Growth

Qianyun Yu

Whole Foods was growing so fast since the company went public in 1992. However, the company needed to maintain the big growth and fulfill its social mission, big challenges was in the face of Whole Foods. The first issue the company should address was how the public perceived the authenticity of the social mission in this changing marketplace. And the second was how to continue the upward growth trend by the supply of suitable acquisition candidates.

Nowadays, Whole Foods is becoming the nation’s largest natural foods retail chain and fastest growing company in the fiercely competitive grocery market. However, the company was seen become too big and viewed its scale as inconsistent with its social mission. The store’s all-natural mission as part of a social agenda was inconsistent with Mackey’s opposition to unions. Also, the company faced the criticisms from Pollan, a critic. He said the large-scale operations of the company did not match the organic standard outlined by the U.S. government.

Also, the acquisition faced a number of challenges, the acquisition came at the time when the company was struggling financially, and the financial performance at that time was deteriorated. What’s more terrible, the FTC attempted to stop the acquisition because the market did not want to be monopolized by Whole Foods. Whole Foods fight with the FCT more than two years about the Wild Oats acquisition. After acquiring the Wild Oats, there were still challenges in building and training the Whole Foods system into the Wild Oaks.  

Above are the two issues the company faced in its growth with maintaining its social mission. Now I will explain how the company deal with these challenges and tensions. For the first issue, when the public criticisms, Mackey, the CEO of Whole Foods, defended the company in an open letter to explain the company trusted its reginal distribution centers as an irreplaceable means of meeting consumer demand. And Mackey announced several initiatives and positive activities or promotions to gain the trust from the customers. And Mackey used a new paradigm called “conscious capitalism”, this system based on the pursuit of a deeper purpose beyond making profits, and on an acknowledgment of the interdependencies among all the environment. Mackey’s leadership approach is that focus more on the harmony environment of the organizations and the relationship between customers and his company. His organization strategy is all the stakeholder groups working together and remaining mindful of one another and greater value will be created for all.

My assessment for “conscious capitalism” as liberating the heroic spirit of business. This system is unique and special, it helps the leader rebuild corporate reputations, and companies can give back to the community while still making a profit. The model can show that businesses are the true value creators that can push all of humanity upward for continuous improvement for the society. Mackey cares more about the society harmony than making profits, and he wants to achieve the peaceful relationship among customers, employees, investors, suppliers and communities. He announced to hold farmers’ markets in the parking lots of Whole Foods stores, loan to local farmers, which are very humanistic.