Whole Foods Market, Inc. history, profile and history video
Whole Foods Market, Inc. engages in the retailing business of natural and organic foods. The company owns and operates the chain of natural and organic foods supermarkets in the United States, Canada, and the United Kingdom. Its product categories include beverages, body care, snacks, frozen, pantry staples, supplements and gift baskets and also eco-scaling cleaning products. The company was founded by John Mackey, Renee Lawson Hardy, Craig Weller and Mark Skiles on September 20, 1980 and is headquartered in Austin, TX.“
“Whole Foods Market History
In 1978, John Mackey and Renee Lawson borrowed $45,000 from family and friends to open a small natural foods store called SaferWay inAustin, Texas (the name being a spoof of Safeway). When the couple were evicted from their apartment for storing food products in it, they decided to live at the store. Because it was zoned for commercial use, there was no shower stall, so they bathed using a water hose attached to their dishwasher.
Two years later, John Mackey partnered with Craig Weller and Mark Skiles to merge SaferWay with their Clarksville Natural Grocery, resulting in the opening of the original Whole Foods Market on September 20, 1980. At 12,500 square feet (1,160 m2) and with a staff of 19, the store was quite large in comparison to the standard health food store of the time.
The following Memorial Day, on May 25, 1981, the most damaging flood in 70 years devastated Austin. Whole Foods’ inventory was ruined, and most of the equipment was damaged. The loss was approximately $400,000; Whole Foods Market had no insurance. Customers, neighbors, and staff pitched in to repair and clean up the damage. Creditors, vendors, and investors assisted in helping the store recover, and the store reopened 28 days later.
Beginning in 1984, Whole Foods Market began its expansion out of Austin, first to Houston and Dallas and then into New Orleans with the purchase of The Whole Food Company in 1988. In 1989, the company expanded to the West Coast with a store in Palo Alto, California. While opening new stores, the company fueled rapid growth by acquiring other natural foods chains throughout the 1990s: Wellspring Grocery of North Carolina, Bread & Circus of Massachusetts and Rhode Island (banner retired in 2003), Mrs. Gooch’s Natural Foods Markets of Los Angeles, Bread of Life of Northern California, Fresh Fields Markets on the East Coast and in the Midwest, Florida Bread of Life stores, Detroit-area Merchant of Vino stores, and Nature’s Heartland of Boston. The company’s 100th store was opened inTorrance, California, in 1999.
The company started its third decade with additional acquisitions. The first was Natural Abilities in 2000, which did business as Food for Thought in Northern California. After the departure of then company president Chris Hitt and regional president Rich Cundiff, Southern California region, John Mackey promoted A.C. Gallo, president of the Northeast region and Walter Robb, president of the Northern California region to Co-COO and soon after added the titles of Co-President. This led to the promotion of three new regional presidents and a new era for the company. David Lannon became president of the Northeast region, Anthony Gilmore became president of the Southwest region, Ron Megehan became president of the Northern California region. In 2001, Whole Foods also moved into Manhattan. Later that year Ken Meyer became president of the newly formed South region and Whole Foods Market acquired the assets of Harry’s Farmers Market, which included three stores in Atlanta. In 2002, the company continued its expansion in North America and opened its first store in Toronto, Ontario. Further continuing its expansion, Select Fish of Seattle was acquired in 2003. In 2005, Whole Foods opened its 80,000-square-foot (7,400 m2) flagship store in downtown Austin. The company’s headquarters moved into offices above the store.
Whole Foods Market’s expansion has increased the need for products and processing plants. In response, the company added its 365 Everyday Value product line and purchased Allegro Coffee Company in 1997. A seafood processing plant was opened in Atlanta in 2003, the year in which Whole Foods became the United States’ first national “certified organic” grocer.
In 2008, Whole Foods opened its southeast distribution center in Braselton, Georgia, also making it its first green distribution center for the company.
In the summer of 2013, Whole Foods opened up two brand new facilities within just two months of each other in Minnesota. The first location was in Maple Grove, Minnesota and the second was in Minneapolis, Minnesota. As of now, there are currently six Whole Foods facilities within Minnesota, which makes Minnesota the leading state in the MidWest for Whole Foods stores.
As of August 2007, Whole Foods Market plans four stores in the state of Hawaii. On Oʻahu and in the City and County of Honolulu, two of these are in development in Honolulu CDP, at Kāhala Mall in Kāhala, and at Ward Village in Kakaʻako.
In 2004, Whole Foods Market entered the United Kingdom with the acquisition of seven Fresh & Wild stores. In June 2007, it opened its first full-size store, a total of 80,000 sq ft (7,400 m2) on three levels, on the site of the old Barkers department store in Kensington High Street, West London. Company executives claimed that as many as forty stores might eventually be opened throughout the United Kingdom. However, by September 2008, in the wake of Whole Foods Market’s financial troubles, Fresh & Wild had been reduced to four stores, all in London. The flagship Bristol branch was closed because it had “not met profitability goals”. In the year to September 28, 2008, the UK subsidiary made a £36M loss due to a large impairment charge of £27M and poor trading results due to the growing fears of global recession. However in 2011, global sales grew +8% each financial quarter as shoppers returned to the chain. A first Scottish store was opened on November 16, 2011 in Giffnock, a suburb of Glasgow. A new UK store in Cheltenham opened on November 7, 2012, creating 150 jobs. Whole Foods Market Inc. currently operates 9 different Whole Foods locations: in Camden, Cheltenham,Clapham Junction, Giffnock, Kensington, Piccadilly Circus, Richmond, Stoke Newington, and most recently Fulham.
Acquisition of Wild Oats Markets and antitrust complaint
On February 21, 2007, Whole Foods Market, Inc. and Wild Oats Markets Inc. announced the signing of a merger agreement under which Whole Foods Market, Inc. would acquire Wild Oats Markets Inc.’s outstanding common stock in a cash tender offer of $18.50 per share, or approximately $565 million based on fully diluted shares. Under the agreement, Whole Foods Market, Inc. would also assume Wild Oats Markets Inc.’s existing net debt totaling approximately $106 million as reported on September 30, 2006.
On June 27, 2007, the Federal Trade Commission (FTC) issued an administrative complaint challenging Whole Foods Market, Inc.’s acquisition of Wild Oats Markets Inc. According to the complaint, the FTC believed that the proposed transaction would violate federal antitrust laws by eliminating the substantial competition between two close competitors in the operation of premium natural and organic supermarkets nationwide. The FTC contended that if the transaction were to proceed Whole Foods Market would have the ability to raise prices and reduce quality and services. Both Whole Foods Market and Wild Oats stated their intention to vigorously oppose the FTC’s complaint and a court hearing on the issue was scheduled for July 31 and August 1, 2007. Whole Foods Market CEO John Mackey took the unusual step of initiating a blog on the subject to explain his opposition to the FTC’s stance. Papers filed by the FTC revealed that for several years Mackey posted highly opinionated comments under the pseudonym “Rahodeb” on the Whole Foods Yahoo! investment message board, raising serious legal and ethical questions.
On July 29, 2008, the Court of Appeals for the District of Columbia overturned the district court’s decision allowing the merger. The Court of Appeals ruled that “premium natural, and organic supermarkets” (“PNOS”), such as Whole Foods and Wild Oats, constitute a distinct submarket of all grocers. The court ruled that “mission driven” consumers (those with an emphasis on social and environmental responsibility) would be adversely affected by the merger because substantial evidence by the FTC showed that Whole Foods intended to raise prices after consummation of the merger. In 2009 Whole Foods agreed to sell the Wild Oats chain.
In October 2007, the company completed the sale of all 35 Henry’s Farmers Market and Sun Harvest Market stores to a subsidiary of Los Angeles grocer Smart & Final Inc. for $166 million.
On October 2008, as part of the ongoing FTC antitrust investigation, Whole Foods Market subpoenaed detailed financial records, market studies, future strategic plans, and other information from New Seasons Market, a regional competitor based in the Portland area. CEO Brian Rohter expressed concern about handing sensitive information over to a direct competitor, and the company has filed a motion with the FTC to block the subpoena.
The online postings of Whole Foods Market’s CEO, John Mackey, became the subject of an informal inquiry by the Securities and Exchange Commission, according to The Wall Street Journal. Mackey posted numerous messages on a Yahoo financial forum under the user name “rahodeb,” according to a court document filed by the U.S. Federal Trade Commission and postings on Yahoo! The postings came to light during an FTC investigation of Whole Foods Market’s planned takeover of Wild Oats Markets, Inc. Mackey’s messages painted a bright future for Whole Foods Market Inc., the largest U.S. natural and organic grocer, and downplayed the threat posed by competitors. While it isn’t clear that Mackey violated any laws in his postings, the issue has raised numerous legal questions. The newspaper also reported the SEC was likely to examine whether Mackey’s comments contradicted what the company previously said or were overly optimistic about the firm’s performance.
The SEC considered whether or not the CEO had selectively disclosed material corporate information, which could violate a securities law passed in 2000 (known as Regulation Fair Disclosure) designed to prevent executives from sharing information with favored clients or analysts. On July 17, 2007, Whole Foods Market stated that its board had formed an independent committee to investigate the postings. The SEC cleared Mackey of the charges on April 25, 2008.
California vs. Whole Foods
Reacting in part to a study released by the Organic Consumers Association (OCA) in March 2008, in addition based on their own testing, the Attorney General of California has filed a major lawsuit against personal care and household cleaning product companies whose products recently tested highest for the carcinogenic contaminant 1,4-Dioxane.The California state attorney general filed a lawsuit against cosmetic companies, including Whole Foods Market Inc., for allegedly selling natural body care and household cleaning products that tested high for a cancer-causing chemical, in violation of state law. California v. Avalon Natural Food Products, No. RG08389960 (Alameda Co., Calif., Super. Ct.). California’s state attorney general Jerry Brown filed a lawsuit against Whole Foods Market Inc. for failing to label its cosmetic products containing 1,4-Dioxane.The suit was filed in Alameda County Superior Court on May 29, 2008. Under Proposition 65, companies must label products that contain chemicals known to the state of California to cause cancer. Each violation carries civil penalties as high as $2,500 a day. The lawsuit states: “Plaintiff alleges that each defendant has known since at least May 29, 2004 that the body washes and gels and liquid dish soaps contain 1,4-Dioxane and that persons using these products are exposed to 1,4-Dioxane.” The suit names Austin-based Whole Foods Market Inc. as a defendant, which markets the 365 brand sold in the company’s stores. In a statement, Whole Foods spokesperson Libba Letton said the company investigated the claims and does not believe “these products represent a health risk or are in excess of California’s Proposition 65 Safe Harbor level for 1,4-dioxane.” “These companies need to stop treating the inclusion of cancer causing chemicals in their products as ‘business as usual’ and reformulate before consumer confidence in the natural products and organics industry is permanently damaged,” says consumer activist David Steinman who conducted the OCA study and originally exposed the presence of 1,4-Dioxane in baby bubble bath products in his book Safe Trip to Eden.”
*Information from Forbes.com and Wikipedia.org
**Video published on YouTube by “WholeFoodsMarket“