How Whole Foods Is Embracing Its Local-Produce Rivals

Whole Foods (WFMI) has decided to allow people throughout the state of Florida to use their stores to pick up produce that residents buy directly from local farms.

At first glance, the move looks like a form of retail suicide, since so-called community supported agriculture programs, or CSAs, are an alternative and potentially threatening system of food distribution. But Whole Foods could be onto something here, since it can’t hope to fight CSAs — and now may have found a way to piggyback on their mushrooming popularity.

People who join CSAs pay local farms a set rate for a season’s worth of ultra-fresh produce, which is usually delivered weekly to various drop off points. Since farmers are selling directly to local customers, Whole Foods makes no money from this unusual arrangement.

Embrace the competition

Whole Foods’ embrace of CSAs, which it’s doing only in Florida at the moment, is a smart, innovative solution to emerging competition. It’s certainly a classier move than the fake “farmers’ markets” some Albertsons and Safeway (SFY) stores slapped together last year. One Seattle area Safeway store even decided to sell mangoes in its “farmer’s market,” apparently unaware that a farmer’s market means the food comes from local farms.

Whole Foods is clearly hoping that some of the locavores who opt to use its stores as a dropping point will stay and shop for other items, and there’s a good chance that some of them will. But even if they don’t, Whole Foods will still score brand building points for its free-of-charge support of local agriculture, thus blunting some of the criticism the chain has gotten for supporting the same industrial, high-mileage, strawberries-in-January model of agriculture that all the other big food stores operate under.

Michael Pollan, perhaps the most influential leader of the sustainable food movement, once famously chastised Whole Foods CEO John Mackey for going mainstream. In a 2006 letter to Mackey published in the New York Times, Pollan wrote:

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.

Whole Foods isn’t going to beat CSAs at their own game — as a 300-store, publicly traded chain, it still needs to source a lot of its produce from big suppliers — so it may as well join them. The number of CSAs in the U.S. have more than tripled in the last five years, to more than 4,000, with the average CSA containing 100 members. Farmer’s markets have also ballooned, up from 1,755 in 1994 to 5,274 in 2009, according to the USDA.

Jim W.


About internalmarket

This blog and its accompanying Twitter account have been established as social media learning tools for the Internal Communications and Employee Engagement class at Columbia College Chicago. Through this blog, we will share our observations about current events, change management and employee communications theory, and the application of social media in shaping employee engagement.
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