The world headquarters for Whole Foods Market spreads out across a vast, capacious megaplex in Austin, Texas, not far from the Colorado River. On the surface it looks like business is booming.
But late last week, the Washington Post reported that Whole Foods is experiencing its worst performance in a decade. Sixteen months ago, the giant natural and organic foods retailer boasted it would expand from 470 U.S. locations to more than 1,200. Now, the Post reports, Whole Foods is closing nine stores in the wake of six consecutive quarters of falling same-store sales.
What’s hurting Whole Foods? Ironically, it’s the popularity of organics. Organics are everywhere, from small markets and general stores to monolithic conventional retailers like Walmart. Whole Foods’ claim to fame, once a niche, is now ubiquitous.
“Organic products are now available in nearly 20,000 natural food stores and nearly 3 out of 4 conventional grocery stores,” the USDA’s Economic Research Service reported on its website.
In the early days of the organic movement, organic products were the lifestyle choice for a small share of consumers. Today, organics are consumed by a majority of Americans.
One of the first events I ever attended when I started at the Co-op 17 years ago was a panel discussion on organics, then just a burgeoning movement on the brink of bigger things. At the time, you could only find organics en masse at food co-ops. But speakers predicted that day that organics would one day lead the food industry. They were right.
Each year, Dr. Phil Howard and folks at the Cornucopia Institute release updated versions of the popular chart, “Who Owns Organics.” (For a high-res version, click below.) Howard is an Associate Professor in the Department of Community Sustainability at Michigan State University and a member of International Panel of Experts on Sustainable Food Systems. The Cornucopia Institute is a Washington state-based watchdog group focused on organic and local agriculture.
As the chart shows, the organic movement is big business. A small group of huge corporations controls much of the organic industry, flooding markets across the country with organic products. Recent updates to the chart include:
- WhiteWave’s acquisition of So Delicious/Turtle Mountain for $195 million and Wallaby Yogurt for $125 million
- General Mills’ acquisition of Annie’s Homegrown for $820 million
- Pinnacle Foods’ acquisition of Boulder Brands for $975 million
- Post’s acquisition of various cereal and egg brands for $1.15 billion
- JAB Holding’s acquisition of several coffee brands, including Green Mountain, Peet’s, Caribou, and more
- Hormel’s acquisition of Applegate Farms for $775 million
I’ve written a lot over the years about small organic producers being acquired by massive companies. Often, representatives for a small producer insist the deal won’t change their company. Instead, they say, the move puts more organic products in front of consumers, a good thing. They also claim they can be a force for reform at their new parent company. “I hear that one a lot,” Amanda Charland, the Co-op’s conscientious Director of Outreach and Member Services, once told me. “My question is, where are all these reformed mega companies?”
As mega companies swallow up small organic producers, and large grocery chains compete for a piece of the organic pie, some retailers are losing their competitive edge. But at many food co-ops, the situation is different. Cooperatives and organics are still a thriving partnership.
Co-ops believed in organics long before others jumped on the bandwagon, and co-ops are still true to what the organic movement stands for. As a result, today, even as organics are available everywhere, many consumers still look to the local food co-op first.
Our stores did $11.8 million in sales of organic items in 2016, up from $10.8 in 2015. We flag organic items as those that qualify for the USDA Organic seal, meaning the product contains at least 95 percent organic ingredients.
“All-natural and organic foods are nothing new to us,” said Ed Fox, Co-op General Manager. “Co-ops have been leaders from the beginning. We were organic before organic was cool.”
Dot Benham, Co-op Perishables Merchandiser, agrees. Dot says the growing popularity of organics has been good for co-ops. She believes the cooperative movement’s embrace of the organic movement decades ago created a robust, sustainable partnership for both movements.
“Co-ops are good for organics,” Dot said, “and organics are good for co-ops.”
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