We are searching data for your request:
Upon completion, a link will appear to access the found materials.
Costco has become the largest organic grocer in America, surpassing Whole Foods with $4 billion in organic grocery sales
Think your neighborhood Whole Foods sells more locally sourced, organic produce than any other chain? Think again.
As the organic grocery business continues to boom, one supermarket chain has quickly moved up the produce ladder to become the largest organic grocer in America. We’ll give you a hint: It’s not Whole Foods. Costco actually leads the way with $4 billion in annual organic grocery sales, climbing an impressive 33 percent in sales from last year’s $3 billion in sales, according to The Seattle Times. Whole Foods came in second with $3.6 billion in organic grocery sales this year; the popular chain is the previously undisputed industry leader.
Percentage-wise, that still means that the bulk of Costco’s sales are not organic. The large grocery chain, which has more than 400 locations nationwide, makes about $114 billion in revenue annually. For every $100 spent at Costco, in other words, $3.50 goes toward organic grocery sales. It also indicates that Costco’s organic grocery sales constitute a large percentage of the organic food business. The Organic Trade Organization estimates that annual sales next year will reach $36 billion nationwide. One-ninth of organic grocery sales will come from Costco.
According to industry experts, this suggests that organic food, which was once a niche market in farmers markets and specialty stores, has become mainstream.
My Letter to Whole Foods
On May 26, John Mackey, the co-founder and CEO of Whole Foods, wrote me a letter (also published on the Whole Foods Web site), taking issue with some of the points I have made about his grocery chain–in my book “The Omnivore’s Dilemma,” in my column for TimesSelect and in some of my public remarks. What follows is my response to Mr. Mackey.
On June 26, he replied to this letter read his reponse here.
Thank you for your letter, and for the time you spent with me in Austin last month. I was delighted to have a chance to meet and to learn more about Whole Foods. Thank you, too, for the $25 gift certificate, which more than makes up for the $6 I spent on the disappointing Argentine organic asparagus. Though I know you are troubled by some of the critical things I have written and said publicly about Whole Foods, it was clear from our conversation that we agree about a great many things, including our concerns about the future direction of organic agriculture. Since you are in a position to do much to shape that future, that cheers me no end.
I want to take this opportunity to address some of the points you made in your letter, and to pose a few of the questions that it begs. I hope you will take my remarks in the spirit in which they are offered “” as constructive criticism of an important institution that can do much to advance what you call the “reformation” of the American food system, something we both want.
Let me start by explaining why I did not seek to interview anyone from Whole Foods for my book, which you imply in your letter represents a journalistic lapse. (You should know I have interviewed people from the company several times in the past, particularly in connection with an April 2001 story I did for The New York Times Magazine “Naturally,” for which I interviewed Margaret Wittenberg. Over the years I have also interviewed several store employees of Whole Foods and a great many of its suppliers.) For the purposes of “The Omnivore’s Dilemma,” I approached Whole Foods less as a journalist than a consumer, since my goal was to capture how the store represents itself and the food it sells to a typical shopper: the signs and displays, the brochures, the labels, the photographs on the walls. Admittedly, this is not a systematic way to describe a supermarket chain–it depends on the sample of stores I visited and what they happened to be selling on any given day. It could be you have stores that sell substantially more local food than the stores I observed. But the fact remains that what I observed I observed, and that is what I wrote in the book. Nothing in your letter leads me to believe my account of what you sell in my local Whole Foods or the farms it comes from is inaccurate.
I do appreciate your offer of journalistic access and “transparency,” though you may be interested to know that other journalists have not found you and other Whole Foods executives to be so accessible in the past. When researching his important new book “Organic, Inc.,” Sam Fromartz was turned down in his effort to arrange an interview with you. He was told (in an email from Amy Hopfensperger): “”¦ we do not grant interviews for book requests at this time for several reasons. With the explosive growth in the organic and natural food industry and Whole Foods Market’s position as the leader in this industry, we are not interested in leaking any competitive information that may benefit our competitors.” I would hope this does not accurately reflect your feelings about talking to journalists, and to judge from my recent contacts with you, it does not. Transparency at every level is critical to reforming the food system.
I confess I am of two minds in deciding how to respond to the substance of your letter: whether I should attempt to cast doubt on your claims that Whole Foods wholeheartedly supports local, artisanal, and grass-based agriculture, or whether to simply applaud and encourage your inclinations in that direction. I take heart in the fact that you feel compelled to defend a commitment to these forms of agriculture, not only because I share it, but because you are in as strong a position as any individual in America today to help rebuild local food chains and build a market for pasture-based livestock farming. I don’t need to tell you how important these two things are — or that the survival of local agriculture is critical to preserving farmland near America’s metropolitan areas to reducing our consumption of fossil fuel (17 percent of U.S. fossil fuel consumption goes to feeding ourselves) and to making the food system better able to withstand threats, whether from pathogens or terrorists (or both). The decentralization of the food system is not just a matter of sentiment or political correctness but of national security. Further, as we discussed, grass farming represents one of the most encouraging trends in American agriculture today, holding out great promise for improving the health of the animals, of the American land, and of the American consumer.
Yet, to be perfectly candid, I have trouble squaring some of your claims of support for local agriculture with what I see when I shop at Whole Foods. I see more signage about the importance of local produce than I see actual items of local produce. You write that 45 percent of your suppliers are local, i.e. located within 200 miles of the store — an impressive statistic, but perhaps a misleading one. Given the concentration of organic produce in a tiny handful of corporate hands (with Cal-Organic/Grimmway and Earthbound dominating the market nationally), it’s not surprising that you would have a relatively high number of local suppliers among your vendors — since just two of those vendors could supply the great bulk of your produce sales. The more telling statistic would be this: As a percentage of sales (rather than of vendors), how much of the produce sold at Whole Foods is produced locally? My guess is that number is considerably lower than 45 percent, even if you count Cal-Organics and Earthbound as “local farmers” in California, a claim that strikes me (and would probably strike them) as a stretch. Leaving aside food miles, these are not the sorts of corporations most people have in mind when they talk about local agriculture.
After visiting a great many large organic farms to research my book, many of them your suppliers, it seems to me undeniable that organic agriculture has industrialized over the past few years, and that Whole Foods has played a part in that process–for good and for ill. (Sam Fromartz’s “Organic Inc.” demonstrates as much, as I think does “The Omnivore’s Dilemma,” especially in Chapter Nine.) Big supermarket chains will naturally find it easier and therefore more profitable to buy from big farms selling lots of one thing. This is the way of the world, or at least of capitalism. And as I tried to make clear in my account of the organic industry, much is gained when organic gets big I offer the story of Earthbound Farms as a positive case in point. The water and soil in California are in far better shape because of large-scale organic farms like Earthbound, as you point out in your letter. (The statistics you cite in your letter speak eloquently to this point.) But surely we can recognize all these important gains without turning a blind eye to the costs: the sacrifice of small farmers and of some of the founding principles of organic farming (its commitment to polyculture, for example to “whole” rather than highly processed foods to social and economic sustainability, etc.)
We both know other executives in the organic industry who accept these trade-offs as inevitable and necessary. They call themselves realists, and believe that those of us who regret the passing of local organic agriculture and the founding values of the organic movement should just get over it — that the organic Twinkie or organic Coca Cola is good news for the environment, case closed. You obviously don’t feel this way. Your letter and our conversation make clear that you care deeply about the values behind the organic movement, that much more is at stake here than pesticide residues. That’s why I would rather not get into an argument about “how local are you.” What I would much rather do is applaud you for carrying however much local food you carry, and to urge you to make it possible for your stores to carry much more.
As we discussed, the company’s shift a few years ago from “backdoor sales” to a regional distribution system has made it more difficult, if not impossible, for small local farmers to sell directly to individual Whole Foods stores. For some farmers, this may be a boon as you suggest, but for the many Bay Area farmers I have spoken to, it has shut them out — they don’t grow enough to supply a distribution center, or the centers are too far from their farms. You write that all of your stores are in fact free to buy locally, which I was surprised and delighted to hear. I hope you’ll take steps to encourage them in that direction. I have interviewed dozen of organic farmers for whom selling to Whole Foods over the years has been critical to their success for what it’s worth, they feel much less welcome since you moved to the regional distribution model. Which leads me to my next question: is there anyone, at the regional level, charged with the specific mission of locally sourcing as much food as possible? And do Whole Foods buyers have the authority to pay a premium for local produce, in the same way they now routinely pay a premium for organic? Such a commitment by Whole Foods to local sourcing — not everything, but whatever and whenever possible — could go a long way toward rebuilding local food systems across America.
The issues in pastured meat and milk are similar in some ways, different in others. I was pleased to hear you speak of the importance of grass in both beef and milk production, and applaud your efforts to push the organic dairy industry to make grazing mandatory and reject the organic feedlot model. The story in beef is more complicated. I recognize the economic advantages of sourcing grass-fed beef from overseas it is a commodity in New Zealand while still an artisanal product here. Yet Whole Foods’ commitment to developing an American grass-fed meat industry would have such a profound impact, both on the environment and the welfare of the animals, that I would urge you to take a broader view of the matter. I am not, contrary to what you might think, an absolutist on local food. I recognize that there are times and cases when supporting local agriculture in other countries is the best way to go Slow Food calls it “virtuous globalization” when the power of a global market can be used to defend an endangered local food or food culture. But that’s not what’s happening in the case of grass-fed beef.
To build a viable grass-fed beef industry in America would do so much for the land “”not just remove the insult of chemicals and ruinous commodity crop production, but also actually restore the land to health. It would also do wonders for the health and happiness of millions of America cattle that now live in misery on feedlots, and encourage farmers to convert cropland back to grassland. I also believe that, by organizing a national supply chain based around regional differences in the season that grass-fed meat should ideally be harvested, Whole Foods could develop a 12-month national supply of fresh, high-quality domestic grass-fed meat. True, the meat would not always be local, but the local effect, as the source of it shifted from one region to another over the course of the year, would be profound. Whole Foods has the power and know-how to do things in this area no one else can do.
As you point out several times in your letter, Whole Foods’ freedom of action is constrained by the desires of its consumers, who want asparagus in January, fresh berries all year long, convenience foods, etc. I appreciate that you “don’t try to channel our customers into adopting any particular dietary regime.” And yet your stores — with their extensive information, signage, and well-informed counter help — are clearly in the business of educating people. You are selling information and stories as well as food, which is to say, you have set yourself the mission of leading, not just following, the consumer. Any retailer can treat the consumer as a dumb beast that wants what we wants when we wants it — appealing to the narrowest conception of our self-interest. Such an approach to the consumer has done much to create the debased industrial food chain we now have — the “pile it high and sell it cheap” philosophy that ramifies up and down the food chain, degrading the land, emiserating the animals, and making us fat and sick. But as Whole Foods recognized before many others did, there is another consumer being born out there, one who takes a broader view of his interests, understands that spending more on higher-quality food is worth it on so many levels, and who treats his food purchases as a kind of vote for a better world. You have helped to create that new consumer, educating him about organics and persuading him to spend more for better food–something we will have to do if the food system is ever to be put on a truly sustainable footing.
In the same way we now need (as you pointed out in our meeting) to raise the bar again on American agriculture, we need to raise it on the American eater too, teaching him about the satisfactions (and nutritional benefits) of eating in season, from his locality, and from a food chain based on grass rather than corn. I think we agree that this is where the “reformation” now is headed you are in a position to lead rather than to follow it there. To do so is also, I daresay, in your company’s self-interest: as competitors like Wal-Mart and Safeway move into selling industrial organic food, Whole Foods can distinguish itself by moving to the next stage, doing things they can’t possibly do. “Local” surely is one of those things: and your buyers already know exactly how to do it. All Wal-Mart knows is how to source industrial organic food from China.
After spending time with you and reading your letter, I’ve wondered if perhaps I did, as you imply in your letter, present a unfair caricature of Whole Foods in “The Omnivore’s Dilemma,” suggesting a store where organic, local and artisanal food is just window dressing to help sell a much more ordinary industrial product. Indeed, nothing would please me more than to conclude I owe you and the company an apology. I’m not quite there yet. But I sincerely hope you will prove my portrait of Whole Foods wrong, that the company has not thrown its lot in with the industrialization, globalization and dilution of organic agriculture, but rather stands for something better. For my own part, I stand ready to write that apology, and look forward to doing it.
I also look forward to continuing this dialog, and to following Whole Foods progress. Here’s to the “reformation”!
The ubiquitous retailer might have a so-so reputation, thanks to its massive corporation status and camo-clad clientele who inspire viral blog posts, but the Arkansas-based retailer's low prices—and quality store brand—do a lot to redeem it.
Need more reasons to try Walmart? The Savings Catcher app will give you back "Walmart bucks" if prices are lower at other stores. Simply submit your receipt and it will automatically scan other stores' advertised prices and give you back any difference. Plus, many Walmart stores are now rolling out extra services, like online grocery shopping.
The 5 Healthiest Grocery Stores in America are Surprising
Whole Foods may epitomize healthy eating, but you don't have to shop at the spendy retailer to eat well, according to a new survey. Regional grocery store chains earned the highest marks for offering good quality, well-priced, and locally sourced food options, according to a survey by Consumer Reports.
More than 75,000 Consumer Reports members provided feedback on 96 grocery stores across the United States. Stores were evaluated on factors including price, service, quality, and variety, according to the outlet. These stores ranked highest for healthy food choices and quality produce:
- Central Market (Texas)
- Wegmans (Mid-Atlantic Region)
- Heinen&rsquos (Ohio and the Chicago)
- New Seasons Market (Oregon, Washington, and Northern California)
- Fresh Thyme Farmers Market (Midwest, Kentucky, Nebraska, and Pennsylvania)
- Natural Grocers (Colorado-based)
According to Eating Well, Wegmans stands out because it offers nutritional information on all-store prepared foods, which is not typical of most grocery stores. The chain also uses 16 different labels to showcase health benefits of products and whether an item fits dietary restrictions.
Many people surveyed, about 43 percent, purchased organic foods in the past month, despite the high cost. Consumer Reports found that organic foods prices is expensive at nearly all supermarkets. However, Aldi, Costco, and Trader Joe&rsquos received high rankings for affordable options.
Burt Flickinger III, managing director at consulting company Strategic Resource Group, explained that there are many factors keeping organic prices high, including transportation costs.
"Even if you have a great organic crop in Southern California, the price to get a truckload to Philadelphia is now $5,500, from $2,500 a few years ago," Flickinger told Consumer Reports.
Sure, this is just one survey, but it goes to show that you don't need to shop at niche natural markets or expensive organic shops to eat healthy. Need more ideas for eating well without spending a fortune? Check out our tips for making the most of your grocery budget.
Is Whole Foods Wholesome?
It’s hard to find fault with Whole Foods, the haute-crunchy supermarket chain that has made a fortune by transforming grocery shopping into a bright and shiny, progressive experience. Indeed, the road to wild profits and cultural cachet has been surprisingly smooth for the supermarket chain. It gets mostly sympathetic coverage in the local and national media and red-carpet treatment from the communities it enters. But does Whole Foods have an Achilles’ heel? And more important, does the organic movement itself, whose coattails Whole Foods has ridden to such success, have dark secrets of its own?
Granted, there’s plenty that’s praiseworthy about Whole Foods. John Mackey, the company’s chairman, likes to say, “There’s no inherent reason why business cannot be ethical, socially responsible, and profitable.” And under the umbrella creed of “sustainability,” Whole Foods pays its workers a solid living wage—its lowest earners average $13.15 an hour—with excellent benefits and health care. No executive makes more than 14 times the employee average. (Mackey’s salary last year was $342,000.) In January, Whole Foods announced that it had committed to buy a year’s supply of power from a wind-power utility in Wyoming.
But even if Whole Foods has a happy staff and nice windmills, is it really as virtuous as it appears to be? Take the produce section, usually located in the geographic center of the shopping floor and the spiritual heart of a Whole Foods outlet. (Every media profile of the company invariably contains a paragraph of fawning produce porn, near-sonnets about “gleaming melons” and “glistening kumquats.”) In the produce section of Whole Foods’ flagship New York City store at the Time Warner Center, shoppers browse under a big banner that lists “Reasons To Buy Organic.” On the banner, the first heading is “Save Energy.” The accompanying text explains how organic farmers, who use natural fertilizers like manure and compost, avoid the energy waste involved in the manufacture of synthetic fertilizers. It’s a technical point that probably barely registers with most shoppers but contributes to a vague sense of virtue.
Fair enough. But here’s another technical point that Whole Foods fails to mention and that highlights what has gone wrong with the organic-food movement in the last couple of decades. Let’s say you live in New York City and want to buy a pound of tomatoes in season. Say you can choose between conventionally grown New Jersey tomatoes or organic ones grown in Chile. Of course, the New Jersey tomatoes will be cheaper. They will also almost certainly be fresher, having traveled a fraction of the distance. But which is the more eco-conscious choice? In terms of energy savings, there’s no contest: Just think of the fossil fuels expended getting those organic tomatoes from Chile. Which brings us to the question: Setting aside freshness, price, and energy conservation, should a New Yorker just instinctively choose organic, even if the produce comes from Chile? A tough decision, but you can make a self-interested case for the social and economic benefit of going Jersey, especially if you prefer passing fields of tomatoes to fields of condominiums when you tour the Garden State.
Another heading on the Whole Foods banner says “Help the Small Farmer.” “Buying organic,” it states, “supports the small, family farmers that make up a large percentage of organic food producers.” This is semantic sleight of hand. As one small family farmer in Connecticut told me recently, “Almost all the organic food in this country comes out of California. And five or six big California farms dominate the whole industry.” There’s a widespread misperception in this country—one that organic growers, no matter how giant, happily encourage—that “organic” means “small family farmer.” That hasn’t been the case for years, certainly not since 1990, when the Department of Agriculture drew up its official guidelines for organic food. Whole Foods knows this well, and so the line about the “small family farmers that make up a large percentage of organic food producers” is sneaky. There are a lot of small, family-run organic farmers, but their share of the organic crop in this country, and of the produce sold at Whole Foods, is minuscule.
A nearby banner at the Time Warner Center Whole Foods proclaims “Our Commitment to the Local Farmer,” but this also doesn’t hold up to scrutiny. More likely, the burgeoning local-food movement is making Whole Foods uneasy. After all, a multinational chain can’t promote a “buy local” philosophy without being self-defeating. When I visited the Time Warner Whole Foods last fall—high season for native fruits and vegetables on the East Coast—only a token amount of local produce was on display. What Whole Foods does do for local farmers is hang glossy pinups throughout the store, what they call “grower profiles,” which depict tousled, friendly looking organic farmers standing in front of their crops. This winter, when I dropped by the store, the only local produce for sale was a shelf of upstate apples, but the grower profiles were still up. There was a picture of a sandy-haired organic leek farmer named Dave, from Whately, Mass., above a shelf of conventionally grown yellow onions from Oregon. Another profile showed a guy named Ray Rex munching on an ear of sweet corn he grew on his generations-old, picturesque organic acres. The photograph was pinned above a display of conventionally grown white onions from Mexico.
These profiles may be heartwarming, but they also artfully mislead customers about what they’re paying premium prices for. If Whole Foods marketing didn’t revolve so much around explicit (as well as subtly suggestive) appeals to food ethics, it’d be easier to forgive some exaggerations and distortions.
Of course, above and beyond social and environmental ethics, and even taste, people buy organic food because they believe that it’s better for them. All things being equal, food grown without pesticides is healthier for you. But American populism chafes against the notion of good health for those who can afford it. Charges of elitism—media wags, in otherwise flattering profiles, have called Whole Foods “Whole Paycheck” and “wholesome, healthy for the wholesome, wealthy”—are the only criticism of Whole Foods that seems to have stuck. Which brings us to the newest kid in the organic-food sandbox: Wal-Mart, the world’s biggest grocery retailer, has just begun a major program to expand into organic foods. If buying food grown without chemical pesticides and synthetic fertilizers has been elevated to a status-conscious lifestyle choice, it could also be transformed into a bare-bones commodity purchase.
When the Department of Agriculture established the guidelines for organic food in 1990, it blew a huge opportunity. The USDA—under heavy agribusiness lobbying—adopted an abstract set of restrictions for organic agriculture and left “local” out of the formula. What passes for organic farming today has strayed far from what the shaggy utopians who got the movement going back in the ‘60s and ‘70s had in mind. But if these pioneers dreamed of revolutionizing the nation’s food supply, they surely didn’t intend for organic to become a luxury item, a high-end lifestyle choice.
It’s likely that neither Wal-Mart nor Whole Foods will do much to encourage local agriculture or small farming, but in an odd twist, Wal-Mart, with its simple “More for Less” credo, might do far more to democratize the nation’s food supply than Whole Foods. The organic-food movement is in danger of exacerbating the growing gap between rich and poor in this country by contributing to a two-tiered national food supply, with healthy food for the rich. Could Wal-Mart’s populist strategy prove to be more “sustainable” than Whole Foods? Stranger things have happened.
Supermarket Showdown: Aldi vs. Whole Foods
Whole Foods and Aldi have traditionally rested on opposite ends of the supermarket spectrum. The former known for being upscale and expensive the latter, no frills and cheap. But times are changing.
Since being bought by Amazon last year, Whole Foods has been trimming prices on many staples at its 472 U.S. stores and offering exclusive discounts to Amazon Prime members. Meanwhile, Aldi has been sprucing up many of its 1,800 existing stores in 35 states -- with an emphasis on brighter, wider aisles and fresher, healthier offerings -- even as it rolls out 700 new stores by 2022.
In the past, Aldi would handily beat Whole Foods on price. But with all the changes happening at both chains, we decided to put today’s prices to the test. We shopped a new Aldi store in Northern Virginia as well as a nearby Whole Foods to compare regular (non-sale) prices on 50 grocery staples, focusing mostly on organics and mostly on store brands: Aldi’s SimplyNature and Whole Foods’ 365 Everyday Value. Here’s what we found in our apples-to-apples comparisons (and yes, we even compared apples).
I’ve reported on Aldi since the 1990s. Back in the day, produce wasn’t the grocer’s strong suit. Stores typically sold unrefrigerated fruits and vegetables (more on veggies later) straight from the cardboard boxes they shipped in. Americans weren’t accustomed to the bare-bones marketing that the frugal German retailer pioneered after World War II, but the low prices made up for the sometimes-suspect quality. Fast-forward to today, and Aldi’s new and newly remodeled locations feature refrigerated produce cases on the sales floor.
Of course, Whole Foods has long been known for its bountiful produce displays – especially organics. Here’s how the two stacked up in our recent price comparisons:
- Peaches (per pound): Aldi, $1.79 Whole Foods, $1.99
- Organic strawberries (per pound): Aldi, $3.99 Whole Foods, $4.49
- Organic red grapes (per pound): Aldi, $4.98 Whole Foods, $3.69
- Green grapes (per pound): Aldi, $1.69 Whole Foods, $2.69
- Fuji apples (per pound): Aldi, $1.23 Whole Foods, $1.79
- Pineapple (whole): Aldi, $2.19 Whole Foods, $3.49
- Organic bananas (per pound): Aldi, 58 cents Whole Foods, 69 cents
Like fresh fruits, Whole Foods’ fresh vegetables have the reputation for being higher quality (and higher priced) than Aldi’s vegetables. But Burt P. Flickinger III, a supermarket industry expert who is managing director of Strategic Resource Group, says today’s reality is less clear-cut.
According to Flickinger, the quality of popular, fast-selling produce is actually quite good at Aldi because Aldi’s lower prices mean the inventory turns over faster that at Whole Foods, where produce prices tend to be higher across the board. In other words, popular produce doesn’t spend as long on Aldi’s shelves as it does at Whole Foods. However, Flickinger adds that Whole Foods tends to win the quality battle on slower-selling produce:
- Organic chopped kale (12 ounces): Aldi, $2.99 Whole Foods, $3.99
- Organic tomatoes (per pound): Aldi, $2.89 Whole Foods, $3.99
- Organic broccoli (per pound): Aldi $2.99 Whole Foods, $2.49
- Organic peeled baby carrots (per pound): Aldi 99 cents Whole Foods, $1.69
- Peeled baby carrots (per pound): Aldi 89 cents Whole Foods, $1.29
- Avocado: Aldi, 99 cents Whole Foods, $1.79
- Organic avocados (4-pack): Aldi, $4.99 Whole Foods, $4.99
- Russet potatoes (per pound): Aldi, 44 cents Whole Foods, 79 cents
We stayed organic in our comparison of three canned goods, and we focused on Aldi’s SimplyNature store brand and Whole Foods’ 365 Everyday Value store brand:
- Organic pinto/kidney beans: Aldi, 89 cents (15.5 ounces) Whole Foods, 99 cents (15 ounces)
- Organic diced tomatoes (28 ounces): Aldi, $1.59 Whole Foods, $1.99
- Organic chicken broth (32 ounces): Aldi, $1.79 Whole Foods, $2.29
Dry Pastas and Jarred Pasta Sauces
We weren’t looking for fresh, high-end, store-made, chef-created pastas and sauces here. Just the regular boxed dry pasta and gravy from a jar. The only requisite was organic:
- Organic jarred pasta sauces (multiple varieties): Aldi, $2.19 (24-25 ounces) Whole Foods, $2.79 (25 ounces)
- Organic dry pastas (multiple varieties, 16 ounces): Aldi, $1.09 Whole Foods, $1.49
Fresh Fish and Meats
Fresh fish and meats, typically tagged with “natural,” “pasture-raised,” “cage-free” or some other it’s-all-OK-with-the-animals modifier, have been a trademark of Whole Foods for decades. Aldi is going after a piece of that action on the discount end. It recently announced that it will increase its selection of fresh foods, including ready-to-cook and organic fresh meats, by 40% by early 2019:
- Atlantic salmon fillets (per pound): Aldi $7.79 Whole Foods, $9.9
- Ground beef (93% lean, per pound): Aldi $4.49, Whole Foods, $6.99
- Top sirloin steak (per pound): Aldi, $5.79 Whole Foods, $11.99
- Organic whole chicken (per pound): Aldi, $2.49 Whole Foods, $4.05
Eggs and Dairy
Aldi has always had killer prices on eggs and dairy products. Last year we saw conventional milk selling for $1.49 a gallon and eggs going for just 39 cents a dozen. Aldi’s milk and egg prices were higher at our recent check but still lower than Whole Foods’ prices:
- Grade A large brown eggs (dozen): Aldi, $2.29 Whole Foods $3.99
- Unsweetened vanilla almond milk (half-gallon): Aldi, $1.89 Whole Foods, $2.99
- Organic milk (whole or 2%, gallon): Aldi, $5.89 Whole Foods, $6.49
- Non-organic milk (gallon): Aldi, $2.14 Whole Foods, $3.19
One of the most surprising finds on this comparison-shopping venture was the price of spices. If you’ve ever had to restock a spice pantry or pick up an obscure spice for a recipe, you know how stinging the cost can be to a shopping budget. It’s less so at Aldi – and we’re talking organics, too.
“I've talked to five-star restaurant chefs stocking up at Aldi stores,” says Flickinger. “The chefs say for jams, many spices and cooking ingredients, Aldi has exceptionally good quality, while being a low-price leader with B.J.'s Wholesale Club and Lidl.”
- Organic powdered garlic: Aldi, $1.99 (2.75 ounces) Whole Foods, $3.99 (2.33 ounces)
- Organic basil: Aldi, $1.99 (0.62 ounces) Whole Foods $3.99 (0.46 ounces)
- Organic thyme: Aldi, $1.99 (0.75 ounces) Whole Foods, $3.99 (0.67 ounces)
- Cayenne pepper: Aldi, $1.99 (1.62 ounces) Whole Foods, $2.99 (1.76 ounces)
Rice and Grains
Starchy foods including rice and grains offer inexpensive ways to stretch meal budgets. Both Aldi and Whole Foods stock organic versions from which to choose:
- Organic quinoa (one pound): Aldi, $3.49 Whole Foods, $5.99
- Organic brown rice: Aldi, $2.59 (28 ounces) Whole Foods, $3.99 (32 ounces)
- Organic instant oatmeal (multiple varieties, 8-packages): Aldi, $2.29 Whole Foods, $3.69
This is one area where we were able to compare national brands toe-to-toe at Aldi and Whole Foods. If you’re in the market for any national brands, remember that Whole Foods will accept manufacturer coupons (Aldi won’t):
- LaCroix sparkling water (12-pack, assorted flavors): Aldi, $4.29 Whole Foods, $4.99
- Organic orange juice (59 ounces): Aldi, $3.79 Whole Foods $4.99
- Organic kombucha (16 ounces): Aldi, $2.89 Whole Foods, $3.29
- Organic coconut water: Aldi: $1.39 (16.9 ounces) Whole Foods, $1.99 (17.6 fluid ounces)
- Devil’s Backbone Vienna Lager beer (6-pack): Aldi, $9.49 Whole Foods, $10.99
If you like the carbs, you can spend less – sometimes a lot less, depending on your bread preference – at Aldi:
- Organic whole grain bread:Aldi, $4.29 (Simply Nature Seedtastic organic 21-grains bread, 27 ounces) Whole Foods, $4.49 (365 Everyday Value Early Bird multi-seed organic bread, 28 ounces)
- White bread:Aldi, $1.19 (L’oven Fresh whole grain white bread, 20 ounces) Whole Foods, $4.79 (Vermont Bread soft white, 24 ounces)
We didn’t find any organic versions of pizza or chicken nuggets in our research trips to Aldi and Whole Foods — we looked — but here’s the best we could come up with for comparison sake:
- Pizza: Aldi, $2.69 (Mama Cozzi’s supreme or pepperoni rising-crust pizza, 27.5-31.5 ounces) Whole Foods, $4.99 (365 Everyday Value supreme or pepperoni thin-crust pizza, 14.5 ounces)
- Chicken nuggets: Aldi, $3.79 (Kirkwood chicken breast nuggets, 29 ounces) Whole Foods, $6.99 (Bell & Evans breaded chicken nuggets, 12 ounces)
- Beer-battered cod fillets: Aldi, $4.99 (Sea Queen, 13.1 ounces) Whole Foods, $6.99 (365 Everyday Value, 12 ounces)
Despite Whole Foods’ rep for natural and healthy fare, we did check out a few salty snacks. Both chains carry their own knockoffs of some national brands such as Wheat Thins and Ritz. The major difference, other than price, was that Aldi’s knockoffs aren’t labeled as organic while Whole Foods’ knockoffs are. It’s your choice whether it’s worth paying significantly more for the organic versions:
- Wheat crackers (Wheat Thins knockoffs): Aldi, 99 cents (8.5 ounces) Whole Foods, $2.99 (8 ounces)
- Golden round crackers (Ritz knockoffs): Aldi, $1.39 (13.7 ounces) Whole Foods, $2.99 (8 ounces)
- Saltine crackers (one pound): Aldi, 75 cents Whole Foods, $2.99
- Pretzel sticks (one pound): Aldi, 79 cents (Clancy’s) Whole Foods, $2.49 (365 Everyday Value)
We didn’t have flowers on our original shopping list, but after spotting roses for sale in both stores we decided to add them. A supermarket floral arrangement is affordable and serves well as a last-minute gift. While Aldi’s roses weren’t long-stemmed like the ones at Whole Foods, they’d do in a pinch, though we’re willing to admit long-stem roses say “romance” a bit more loudly than a rose bouquet. The flowers at both stores appeared to the eyes (and nose) to be fresh:
And the Winner Is.
- The total bill for the 50 items on our shopping list added up to $136.98 at Aldi it was $205.66 at Whole Foods – a difference of nearly $69. In some cases the difference was pennies per item, but in others it was dollars. It adds up. Flickinger, the retail consultant, says his research shows that a family of five can save perhaps between $3,500 and $5,500 a year by shopping for groceries at Aldi over Whole Foods.
What you will actually end up paying at checkout depends on a host of factors including how carefully you shop and, in the case of Whole Foods, whether you’re an Amazon Prime member. Remember, the prices we quote are everyday, non-sale prices, but both chains run weekly sales on select items. Keep up on sales by signing up for email alerts or downloading the retailers’ mobile apps. Our prices also don’t reflect the additional savings at Whole Foods offered to Prime members, who receive exclusive discounts on select items as well as an additional 10% off sale items. Just be sure to factor in the $119-a-year cost to join Amazon Prime. Aldi doesn’t have a customer loyalty program.
5. Market Basket
While lesser New England chains dithered, the head-and-shoulders-above regional favorite announced that their associates had always been able to wear masks and gloves, if they so preferred up went the plexiglass shields and in came the crowds. Like everyone else in the hard-hit region, the family-owned company couldn’t escape the virus entirely, even if it tried damn hard, but some relationships are built to last. Long after the dust settles, after people stop banging on about grocery stores being essential businesses, Market Basket will remain just that, wholly essential, both to its local customer base and the streams of summer people, who, for example, not that we𠆝 know anything about this, pay too much for their Cape Cod rentals and then roll up on the Bourne store after sitting in so much bridge traffic, filling up what room is left in the car with groceries that are at times so affordable, shoppers from less lucky places might wonder if the prices aren’t a mistake.
Shopping at Trader Joe’s feels a little like being a kid in a candy store when you just got your allowance. (Tiny ice cream cones! Tubs of cookies! Mini peanut butter cups! So cheap I can buy them all!) Add in the endless parade of trendy new products like lemon elderflower soda and matcha yogurt, and it’s easy to see why TJ’s has a cult following. But it’s the friendly staff and bargain-priced basics (even for organics) that keep shoppers coming back. TJ’s rivals Costco for the best prices on the stuff you need, mainly because 80 percent of its inventory is private label and directly sourced from the producer. And like Costco, it’s well-known for being a great employer. The average “crew member” earns $13.20 an hour, and semi-annual raises are a given. Those working at least 30 hours get benefits, including a 401k and a tuition reimbursement. No wonder why the staff is always so friendly.
- Trader Joe’s boneless skinless chicken breasts: $4.49/pound $8.98 for 2 pounds
- Trader Joe’s wild Alaskan sockeye salmon fillets (frozen): $10.99/pound
- Trader Joe's 2% reduced-fat milk: $2.79/gallon
- Trader Joe’s cage-free large eggs: $2.99/dozen
- Organic Power Greens: $1.99/5-ounce bag $3.98 for 10-ounce bag
- Broccoli florets: $1.99/12-ounce bag
- Green seedless grapes: $3.99/1.5 pounds
- Trader Joe’s whole wheat sandwich bread: $2.99/24-ounce loaf
- Trader Joe’s brown jasmine rice: $2.99/3 pounds $1.99/2 pounds
- Trader Joe’s organic diced canned tomatoes: $1.49/14.5-ounce can
- Trader Joe’s extra-virgin olive oil: $6.99/33.8-ounce bottle
- Trader Joe’s super-premium vanilla ice cream: $6.99/half gallon $1.75/pint
Stock up on these next time you go to Costco.
America’s Most Popular Supermarket May Surprise You
Consumer experience and satisfaction have been in decline over the past few years (well, duh) but it appears to have stabilized a bit, including within the supermarket category. This is all according to a new report from The American Customer Satisfaction Index , a national economic indicator of customer evaluations of quality for U.S. products and services.
to market! Best Reusable Grocery Bags to Buy in 2020 The index used data from interviews with roughly 85,000 customers to compile a score between 1-100, rating grocers on everything from cleanliness to store layout and the quality of meat and produce. While the larger grocery category average score held steady at 78—following a two-year dip in score from 2016-2018—certain individual supermarket chains fared better than others in the report.
H-E-B , a privately owned supermarket chain with locations in Texas and Northern Mexico, took the top slot, tied with Trader Joe’s , whose founder passed away last weekend, and Northeast-based Wegman’s , all scoring an 84 on the index. These were followed by another three-way tie between ALDI , Costco, and Publix , who each racked up a respectable 83.
Down at the bottom of the index is national chain Albertsons and discount grocer Sav-A-Lot, which each scored a 75, with big-box superstore Walmart bringing up the rear, clocking in at 73. Whole Foods, now owned and operated by Amazon, landed in the middle of the pack, scoring a 79 for the second straight year, while BJ’s Wholesale makes the biggest jump, adding four points to its 2018 score.
Find the full Customer Satisfaction Index for U.S. supermarkets below.
- H-E-B – 84
- Trader Joe’s – 84
- Wegman’s – 84
- Aldi – 83
- Costco – 83
- Publix – 83
- BJ’s Wholesale Club – 82
- Sam’s Club – 80
- ShopRite – 80
- Kroger – 79
- Target – 79
- Whole Foods (Amazon) – 79
- Hy-Vee – 78
- Meijer – 78
- Ahold Delhaize – 77
- Giant Eagle – 76
- Southeastern Grocers – 76
- Supervalu – 76
- Albertsons Companies – 75
- Sav-A-Lot – 75
- Walmart – 73
Do you agree with these rankings? Let us know in the comments below.
Header image courtesy of Caiaimage/Paul Bradbury / Getty Images.
Whole Foods Market, Marketing Strategies and Programs Analysis
Whole Foods Market is an American supermarket chain with its headquarters in Austin, Texas. It was e s tablished in 1980 with the merger of SaferWay and Clarksville Natural Grocery stores. Today Whole Foods Market has over 400 stores in USA, Canada and United Kingdom with over 91000 employees. The company is traded on Nasdaq with a market capitalization of over $10 billion and is a Fortune 500 company. It is the nation’s largest retailer of organic foods, 5th largest public food retailer, and the 10th largest retailer overall based on 2014 sales rankings (Whole Foods Market, 2015). The company’s mission is to “promote vitality and well-being of all individuals by supplying the highest quality, most wholesome foods available” (Whole Foods Market, 2013). Some of the company’s core values are: selling the highest quality natural and organic products, support team member excellence, create wealth through profits and growth, serve and support local and global communities.
Whole Foods Market has only one operating segment: natural and organic foods supermarket (Whole Foods Market, 2013). This segment is a $100 billion market with YOY increase of 9% (NFM, 2015). The shoppers in this segment usually are health conscious, have environmental concerns, care how their food is produced and also care how the store associates and employees are treated. Trader-Joes, Sprouts Market are some of the competitors of Whole Foods in this segment. Recently more supermarket chains are carrying organic and natural foods at lower price margins to attract the clientele of Whole Foods.
The target customers for Whole Foods Market are individuals and families whose income is well above the national average, lead a healthy lifestyle and conscious of environment. Most of the customers have college degrees and live in upscale sub-urban or metropolitan areas. Another target group of Whole Foods are wealthy customers. These customers usually do not need any discount deals or coupons and will be averse to shopping at Walmart. They will be usually buying high end and expensive selections at Whole Foods (Brandongaille, 2014). The customers at Fremont store were mostly young families, new college grads working for many of the high-tech companies in Bay Area and retirees. Most of shoppers were not just shopping for groceries but sampling the foods and having brunch.
Whole Foods is currently targeting a new group of customers: Millenials. This target group consists of mainly new college graduates with more liberal or progressive values, more conscious about saving money, willing to travel and pay-off college debts rather than spending on expensive products. Whole Foods Market is opening a new line of stores specifically targeting this group of individuals (Bolton, 2015).
Whole Foods Market positions itself as the best source for healthiest, natural and organic foods among its competitors and is the first grocery store to be “Certified Organic” in America. It has voluntarily certified all its stores and operations and till date is the only food retailer that has all store departments in all locations certified (Whole Foods Market, 2015). Whole Foods differentiates itself from its competitors by relying on its stringent high quality standards. It is also certified by California Certified Organic Farmers (“CCOF”), an independent, USDA-accredited, third- party certifier. CCOF’s Organic Certification Program verifies Whole Foods handles organic goods according to stringent USDA guidelines (Whole Foods Market, 2015). One of the key positioning strategy of Whole Foods is its supply chain. It procures its products from local and global producers and ensures that its products are manufactured without violating any labor laws, human rights or animal rights.
Whole Foods carries huge varieties of high quality organic and natural products. Some of the products are usually very exotic and not available in other supermarkets. An average store carries 34000 SKUs and much larger stores usually carry about 50000 SKUs (Whole Foods Market, 2015). Due to the focus on carrying high quality healthy foods, we do not usually find products in Whole Foods that are common in other supermarkets. For example, Whole Foods does not carry sugary sodas that are known to cause childhood obesity but instead carries a wide variety of health drinks. 54% of food sold at Walmart is not sold by Whole Foods since they do not meet its quality and health standards (Sarich, 2014). It also has its own label, 365 Everyday Value and is carried in all stores along with other exclusive local and independent brands. It carries a huge selection of cheese, wines and imported beers. Whole Foods does not carry products with hydrogenated fats, animals raised with antibiotics, caged hen eggs, products containing artificial flavors, colors and sweeteners (Whole Foods Market, 2015).
Whole Foods sells its products both in stores and online but majority of the purchases are made in store. They recently signed an exclusive partnership with Instacart and are now delivering groceries to their customers (del Rey, 2016). Whole Foods typically targets premium real estate and takes into consideration lot of criteria before zeroing on a place. An average store is about 35000–40000 square feet, with abundant parking space. A typical store has about 200,000 people living within 20-minute drive, have large number of college-educated residents, easy access to roadways and clear visibility of its signage (Whole Foods Market, Real Estate, n.d.). The two stores I have visited, in Fremont and Palo Alto meet these real estate requirements. Both are affluent suburbs with highly educated population.
Whole Foods Market is known for its premium pricing and has a moniker of Whole Paycheck (Jargon, 2013). Due to its high quality and strict adherence to standards, many of the products are expensive at Whole Foods compared to other supermarket chains. Although many of the regular customers of Whole Foods are not price sensitive, to attract customers from Trader Joes or Sprouts, Whole Foods is now offering more sales on it products than before. Its 365 Everyday Value label is comparatively cheaper than other named brands it carries in stores. They are also offering regular sales on various items including perishables, named brands and also on it own labels (Mohammed, 2015). At the entrance of the Whole Foods store at Fremont, they placed coupon books, which had coupons for that particular week. Various aisles were clearly marked in big yellow boards about the discounts. Banners were placed promoting its mobile app to download more coupons and budget friendly recipes.
Whole Foods Market has been generally averse to run ads in either print or visual media. They rely on their brand awareness to get customers to their stores and ensure that the shopping experience will entice the customers to come back. WFM’s marketing expenses has been less than 0.5% of sales for over past 10 years (Bells, 2015). The company did not even have a loyalty program until 2015 and still has developed a loyal customer following everywhere (Horovitz, 2014). The company relies a lot on word of mouth and social media. They have active marketing team on Pinterest, Twitter, Facebook and Instagram with a combined reach of 11 million followers. The emphasis for marketing investments has been on community non-profit partnerships that help grow its business and local communities as well (Whole Foods Market, 2015). This was observed in stores too where focus of banners and on the signage was how Whole Foods is serving the local communities and about its partnerships with non-profits. Each store has its own promotion strategy. Bigger store in more upscale neighborhoods have digital signage and also weekend cooking classes with prominent chefs.
In 2015, the company has revised its marketing strategy after continuous losses and losing the customers to other chains like Costco and Target. For the first time in its history it started a national ad campaign with a budget of over $20 million to get new customers and also to retain its existing customer base (Dobrow, 2014). The focus of the ads is how values matter to Whole Foods and ethically it sources all its food for the greater good of the planet.
Whole Foods is perceived as a very expensive store and not many people are aware of various discounts and sales that happen at store. Regular customers of Trader Joes or Sprouts are not aware that some of the groceries are cheaper at Whole Foods (Mohammed, 2015). It needs to do a better marketing of its 365 Everyday Value brand and also about it weekly sales. Since Whole Foods is trying to target millenials, it can use social media to promote deals rather than traditional media.
Whole Foods needs to rollout its loyalty cards across all the stores. Currently it is being piloted only in few stores. Having loyalty cards and also showing how much the customers saved on their food basket will increase customer loyalty and also ensure that customers return for their weekly groceries. Whole Foods can also send monthly marketing emails, send mobile notifications to these customers of the current deals in stores. Without loyalty cards, sales and discounts do not usually bring back the customers. Whole Foods could also use its mobile app to increase the loyalty in its customers. Having a gamified app, with mobile ordering and mobile payments will increase the revenues as shown by Starbucks (Kell, 2015).
Whole Foods has to ensure that the newly opened stores for millenials entice new customers but not take away the customers from its existing stores. To prevent this, Whole Foods has to clearly communicate and market to the target groups what both these stores have to offer and how they are different from each other while having the same high quality organic products.
Whole Foods needs to aggressively market about it stringent quality standards. Other major supermarket chains are able to provide organic produce at lower price points since they do not follow the same standards as Whole Foods. The USDA rules about what gets classified as organic are hazy and many of the chains are carrying organic produce that may not be strictly organic. Whole Foods need to market that its products are healthier and worth buying. This also helps in maintaining its exclusive and premium brand and retain its wealthy customers.