Why are overpriced groceries from Whole Foods so popular? If we control for the quality of food sold, would Whole Foods charge the same as the local grocery chain, or would it still be a little more expensive? I am willing to bet it would be a little more. Why, then, do young people pay it?
Two months ago, Whole Foods appeared on a PolicyMic list of “3 Grocery Stores You Can Feel Good Shopping At,” and previous PolicyMic pundits have written about Whole Foods’ “higher purpose.” People (young and old) consistently purchase expensive food from Whole Foods because of this magical, feel-good X-factor that our pundits are talking about.
In a book released this spring, Conscious Capitalism, Whole Foods' CEO and co-founder John Mackey extols the concept of “conscious capitalism,” a reimagined capitalism that places more value on ethical consciousness and humane concerns.
Mackey also states that Whole Foods has one principal goal: customer value. “Satisfying and delighting our customers” is one of seven of Whole Foods' core values, according to their website. Their other values include:
-Selling the highest quality natural and organic products available
-Supporting team member excellence and happiness
-Creating wealth through profits and growth
-Caring about our communities and our environment
-Creating ongoing win-win partnerships with suppliers, and
-Promoting the health of our stakeholders through healthy eating education.
The “conscious capitalism” that Mackey describes appears to be this X-factor that allows Whole Foods to charge prices higher than the prices their competitors charge for comparable goods. We all know that Whole Foods is highly profitable. It seems that the intangible value added from being a “conscious” business and from prioritizing customers is exactly what keeps young people coming back for more overpriced rice crackers and organic kale.
However, is shopping at Whole Foods conscious in the ethical sense? I recently read a critique of Whole Foods, titled “Would you buy food from morons? (If not, don’t go to Whole Foods).” The author didn’t believe Mackey’s ideas of a “higher purpose” and conscious capitalism, and accused Mackey and co-founder Walter Robb of hindering global progress because of their opposition to genetically engineered crops (GMOs). He then shows how genetic-engineering technologies have helped “reduce the need to spray chemical pesticides, reduce soil erosion and the release of CO2 into the atmosphere, conserve water and farmland, alleviate famine and vitamin-deficiency diseases for millions, and even lead to the development of edible vaccines incorporated into fruits and vegetables.”
I happen to agree with the author on a few accounts. I too believe that GMOs have yielded many more benefits in the world than dangers. Norman Borlaug, “the father of the Green Revolution,” helped feed billions of people beginning in the 1960s by introducing genetically-modified strains of wheat to Mexico, India, Pakistan, and later to Africa.
Demonizing GMOs and caring about famine or global health should be mutually exclusive, yet many people claim to do both. In large part, the anti-GMO crusades focus on the unnatural quality of the organism, the health repercussions, and some link to obesity (which are valid criticisms), but do not acknowledge that GMOs truly were instrumental in feeding more of the world’s poor.
However, I believe the author goes too far in his criticisms by calling Mackey and Robb “morons” and by accusing them of pandering to their constituents and socially-conscious customers. Unlike politicians, Mackey and Robb are business owners, and they stay in business precisely because they satisfy their customers’ desires. Mackey and Robb claim, “Only by satisfying our customers first do we have the opportunity to satisfy the needs of our other stakeholders.” Thus, as long as the majority of Whole Foods shoppers oppose GMOs, it is likely that Whole Food Market will keep “organic” and “GMO-free” as integral parts of their key values.
Whole Foods specifies that they weight their customers’ preferences higher than the preferences of their other stakeholders, and it seems clear that they will choose the business practices where their shoppers gain the highest “customer value” possible. This is easy to support and justify when it deals with issues of food quality, competitive pricing, and supporting team members.
However, it is difficult when it deals with some of the conflicting issues that GMOs raise: for example, whether Whole Foods should purchase all-organic produce from a farmer in South America or purchase genetically modified produce from a local farmer who doesn’t use pesticides but cannot afford to buy organic seeds for his crops. “Buying local” is another important principle that Whole Foods adheres to, but it appears that the non-GMO principle trumps it. Why? Because most Whole Foods shoppers value GMO-free produce more than they value “buying local.”
Whole Foods shoppers, what do you think is the most “conscious” way Whole Foods should operate?