The new approach blunts a criticism long held about Whole Foods, namely that the chain’s offerings are too expensive and speak mostly to the upper crust of consumers. The “Values Matter” campaign is a risk, but one the chain that bills itself as “America’s Healthiest Grocery Store” needed to take, according to marketing experts. The ad shows hearty fisherman plying their trade and cowboys galloping through untrammeled spaces with a message that says, “We care about where our food comes from.”
Whole Foods is by far the largest chain in the natural and healthy channel. But even with its huge lead, the company has steadily acquired competitors, a number of whom have had success offering similar values but at lower prices, said Marc Brush, principal of the consulting firm Bend LLC who until recently was editor of Nutrition Business Journal.
“There is competition among the converted already in retail. There are Sprouts and Natural Grocers and others. All those other places can speak better to value in terms of the cost of goods. I think what the ad is trying to do is to get at the 95% of the market that is not converted yet to organic, healhty and natural,” Brush told FoodNavigator-USA.
“I think it is a pretty intuitive strategy for Whole Foods,” said Jeff Hilton, co founder of the consultancy Brandhive. “They picked ground they could be authoritative on.”
The benefit of being big
The ad stresses a strength of Whole Foods. It is a market maker in terms of sourcing policy; when the company makes a decision on where and how to source goods, the overall market shifts in that direction. Witness the situation with krill; a number of years ago the chain decided not to feature krill oil supplements on its shelves because of a perceived sustainability issue with the harvest of the raw material in the South Atlantic.
Krill oil suppliers, in particular Aker BioMarine, vigorously disputed the claim, but the chain didn’t budge and krill oil supplements were mostly locked out of the natural channel as a whole in the US for several years as a result. If Whole Foods decides that now is the time to take transparency to the forefront, it will have a major ripple effect throughout the market in the US.
“I do think with your average consumer there is an awakening with all of the issues surrounding GMOs. I definitely think that we are in a phase where transparency is the price of entry. I think it will lift the bar for a lot of our clients,” Hilton said.
“I can’t think of a more significant trend in consumer procucts today than transparency. We see it across all product categories. The story is pretty straightforward in food. With supplements it’s tougher, because it is a more opaque supply chain,” Brush said.
“You can call it clean label, or you can call it owning your supply chain. The message is you know what it is you are providing and you can convey that to consumers in such a way that they know what they are getting,” he said.
The downside of being a gorilla
Brush lauded Whole Foods for the effort, but thought it might be hard to pull off. The same clout that enables the company to set standards that forces suppliers to quickly comply can cloud the issue in the mind of consumers, he said. Big corporations have suffered in public image in recent years, and Whole Foods qualifies as big, with $12.9 billion in net sales in 2013. Think of big banks and their relationship to the economy, big contracting firms pulling foreign policy strings behind the scenes and big oil driving energy policy.
“Good for them. It’s going to be really hard to succeed at doing it. Whole Foods is the barometer, but they are such a gorilla. A year or two ago when they said they wanted to have everything labeled for GMO in their stores it put pressure on the whole supply chain,” Brush said.
“The campaign reeks of big. It’s going to be tough to promote authenticity via marketing as such a big player in the space,” Brush said. “There is something about big vs small that is central to the transparency story. Being big and transparent it’s going to be hard to compete with small and transparent,” he said.
Brush said Whole Foods is taking steps to demystify their image and appear as a smaller, friendlier entity in some venues. For example, the company recently launched what Brush characterized as an “indie” online magazine called Dark Rye that “explores the realms of food, health, sustainability, design, tech and social enterprise” according to the company. It’s a back-channel attempt to connect to consumers on an individual level, he said.
Whole Foods is also moving into new markets that our far outside of the company’s core upper crust clientele, Brush said.
“They are doing all this accessibility work in communities where they had not been before in places like the south side of Chicago and New Orleans,” Brush said.