Chews Wise

Recession Hits: "Not Even Fruit Loops to Give Out"

By Samuel Fromartz

Given the recent financial crisis, deepening recession, and looming food crisis for the poor, I thought it a good time to contact Mark Winne, author of the excellent and readable book Closing the Food Gap, published earlier this year.

Winne worked on getting food for low-income communities in Hartford,  Conn., at a time when the middle class -- and supermarkets -- were exiting the city in droves. He sought to do this with food from local farms and fledgling community gardens (where the community was at times ambivalent about the endeavor, as he recounts in his book). Now this was long before local food was all the rage. In fact, we're talking about the late 1970s and 1980s .

Even back then, he saw the potential conflict in trying to protect the livelihood of farmers and also provide access to healthy and affordable food -- a conflict that lives with us, with even more intensity today.

With the news rising about food scarcity for the poor, I emailed him a few questions to muse on our current situation.

Fromartz: Economists are predicting the deepest recession since 1980-81, possibly the worst recession of the post-World War II era.  Was this the tsunami you always feared when working on food access issues in the inner city?

Winne: Yes, this could be the Big One that we've always feared. We indeed have all the makings of a perfect storm -- rising energy and food prices, caving financial markets, and high unemployment. There will be many victims, but unfortunately not the ones who got us into this mess, namely the tasseled loafer crowd.

What I dread the most is the impact that a massive economic downtown will have on the poor and the near poor. Taken together, those two categories constitute almost a third of all Americans. Just when we were starting to put together the political will and economic resources to turn things around in low-wealth communities, states are slashing their budgets, the federal government is using all their/our money to bail out the banks, and the lines at food banks are growing longer. Right now the Food Stamp Program has more people enrolled than at any time in its 40 year history, and food banks don't even have Fruit Loops to give out.

Mackey Interview, Part 2

In the second installment of the interview with John Mackey, CEO of Whole Foods, the focus is on humane meat, sustainable seafood and local food. The first part of the interview can be found here.

Fromartz: There has been a bit of buzz about your humane meat program, which institutes a five-star rating system based on the humane practices of the livestock producers. When will it roll out?

Mackey: We'll roll it out this summer. It got delayed because we were doing it under the Whole Foods-funded Animal Compassion Foundation but we're now shifting it to a third party, the Global Animal Partnership. We think from a credibility standpoint, third party certification is better. Organic is third party, Fair Trade is third party and we think that will have more credibility with our customer base. But this summer, you will start to see the one-through-five rating. (One being the most basic rating and five, the highest, with background here and here).

Interview: Whole Foods CEO John Mackey

By Samuel Fromartz

John Mackey, the outspoken CEO of Whole Foods Markets, has been at the center of the natural and organic food business for three decades. But he had stopped talking to the media and shut down his blog because of an investigation by the Securities and Exchange Commission into his anonymous posts on a Yahoo message board. 

Once the SEC ended its investigation without taking action last month, Mackey began talking again. "I feel like I've been liberated," he told me. In a wide ranging interview, he talked about the Wild Oats deal, rising food prices, the company's soon-to-be-launched humane meat ratings system, and the prospects for sustainable seafood.

The interview, conducted by phone in late May, has been edited and condensed. It will run in two installments.

Fromartz: Well you're finished with the SEC, but the FTC is still trying to block your deal to acquire Wild Oats.

Mackey: The FTC is still appealing the court decision made last August (which was in Whole Foods' favor), which is unfortunate because the merger's done. We paid all the shareholders, we sold off the Henry stores, we integrated Wild Oats into our system, we’ve shut down several stores, changed the name of many of the stores – so the eggs are scrambled and mostly eaten.

Fromartz: Ignoring the FTC for the minute, was it a good deal in retrospect?

Mackey: It's a difficult question. Because if I could go back in time, we wouldn't have done the Wild Oats acquisition. We spent tens of millions of dollars in legal fees, we've been investigated, it's been highly disruptive. I didn't realize it would cause so much grief.

But if you're saying has it been a good deal aside from that, well, it's very early in the process. And we have to invest money before we get returns on it. We always say it takes about two years to integrate a company we acquire and with Oats we're about 8 months into the process. I'd say we're pretty happy so far but can't say with an absolute certainty until the 24 months have passed. But moral is very high and we've seen a lot of good sales increases.

Honest Tea Founder Talks on Coke Deal

By Samuel Fromartz

Though I took a critical look at Honest Tea's deal with Coke last week, company co-founder and CEO, Seth Goldman, agreed to chew it over with me in an interview.

I've admired Honest Tea for awhile and profiled the company here. It sources from organic and fair trade tea estates, has  looked hard at packaging and shipping, and has been open and transparent in its practices - as this interview attests. These are all key practices in sustainability.

Their "less-sweet" drinks offer a tasty alternative to sugar-laden calorie-busting sodas - yes, just the kind Coke sells. The formula drove Honest Tea sales up 70 percent to $23 million last year.

But I worried Coke's deal to buy a 40 percent stake would throw Seth and his team off track, or worse. There's more than a few examples of companies that stagnated or died a slow death after a giant took them over.

Seth countered that Coke will actually give him a major push in the market -- starting with two new products he's launching this year. Here's the edited interview:

(Photo: Seth Goldman via Honest Tea)