February 17, 2011
By Staff Reporter
Like many of the world’s greatest minds, John Mackey’s was on women when his life changed.
He had signed up to live in a vegetarian house in college, thinking he would “meet some really cool women there,” as he put it to an interview with Fast Company magazine last year.
Much to his delight, he met plenty of cool women, as well as the vegetarian lifestyle and the roots for what has become the model for market-successful organic groceries.
Aside from a scare here and there, Mackey’s model remains unscathed. With a commanding presence in the grocery market that puts him up against — and taking a bite out of — his large-scale competitors like Safeway and Food Lion. Even Wal-Mart, the biggest grocer in the country, is taking notice. To put it into perspective, a typical supermarket sells about $400 per square foot (the common measure for supermarkets and department stores) while Whole Foods averages upwards of $800.
Whole Foods has made a killing in the market, both organic and conventional. Thanks to an approachable atmosphere, large, bright clean stores, and an employee roster that values their input, it has been able to open in both large and small markets and succeed.
Begun 25 years ago in Austin, Texas, the company has now grown to over 165 American stores, along with a handful in the UK and Canada. Whole Foods sales are jumping at about 15 percent a year, and the optimistic CEO has a plan to see revenue balloon from $3.9 billion in 2004 to $10 billion in 2010.
This year saw the opening of their Austin flagship store that measured 80,000 square feet and, perhaps even more impressive, last year saw the opening of a New York anchor store in the basement of Manhattan’s Shops at Time Warner Center, a 59,000 square foot monolith that dwarfs any nearby grocers. Crowds gathered for hours in the chilly February air to get a glimpse of what some people called Manhattan’s first real supermarket.
Organically grown
Mackey fondly recalls the labor of love that was his first store, opened in 1978 in Austin. It wasn’t until two years later that he and two partners opened the first Whole Foods Natural Market, the country’s first natural supermarket.
Inside, food becomes something more than ingredients for dinner. Arranged just so to seduce and stir the senses, anyone can become an honorary foodie just perusing the aisles.
Organic grocers are a growing market, but no one has been able to maneuver through the market as well as John Mackey has. Not surprisingly, Mackey is a health-nut, hiking buff and animal lover. He wields his company’s newfound power with surprising strength. Gentle pressure applied to one of Whole Foods largest duck producers left them hurriedly building swimming areas for them to do what ducks do best, aside from feed people.
The seduction, it turns out, for organically grown foods is in the gleaming brand, the feeling that you are buying and eating something better than generic bands and the message it sends. It is a problem organic grocers have had for years, convincing people that it is worth the money to eat this well.
Perhaps due to that, the chain is constantly talked down as a ruse, a regular store with few organic items disguising higher prices.
It is said to be the domain of yuppies, health nuts and the wealthy, but Manhattan’s Time Warner store offers a cross-section of everything. Nearby office drones will duck in for the prepared lunches, perhaps an amorous couple will bring home a few handmade chocolate-enrobed strawberries or a nanny will be doing the week’s shopping for the employers living in the luxury hi-rise upstairs.
Basically, there is a draw for everyone.
Many people who shunned the chain as the Wal-Mart of organic stores are finding themselves won over – and at the rate of growth, it is hard not to be. Whole Foods is in 26 states, and is managing to open large stores smack dab in the center of large cities, something usually not feasible for larger grocers, especially not Wal-Mart.
It is a draw, and that seduction comes at a high price. But Mackey has made it work.
An open book
Mackey has been described as intensely competitive and is unapologetic for his slightly off-kilter managerial style. He often quotes from obscure management bibles of the 1970s, and considers the intergalactic government featured in Star Trek as one of the best models out there.
One particularly self-assured move is the pay book that is in every store, and available to any employee – from the manager to the guy who scales the fish – who wants to see what they make in comparison to years past and to other employees. Mackey considers it part of his “no-secrets” management style and relies on moves like that to keep his employees happy.
Happy employees don’t form unions, he reasons, and though often chided as a union-buster, Mackey has never seen one form in any of his stores.
He once famously said: “The union is like having herpes. It doesn’t kill you, but it’s unpleasant and inconvenient and it stops a lot of people from being your lover.”
His style seems to be working. In 1998, Whole Foods was named by Fortune Magazine as one of the best companies to work for, and has been on that list ever since. Employees tell of being ambushed by Mackey, not knowing who he was, in break rooms where he grills them about what they like and don’t like.
You can’t blame a guy for trying. As some of those female vegetarians co-eds must have found out, John Mackey can be quite convincing.