Alice Waters launches a frozen food line, which her office described as “a crossover product making sustainability accessible to a wider audience," Civil Eats reports.
Rock on Alice! Oh, wait, that was yesterday's news...
After, what, nearly two years now, the FTC and Whole Foods settled their legal battle over Whole Foods acquisition of Wild Oats.
As I wrote many times previously, I thought the heavy handed federal action was misguided because its premise -- that Whole Foods would control the natural and organic marketplace -- was flawed. They didn’t then and certainly don’t now.
So here’s what happened to the original 109 Wild Oats stores bought by Whole Foods in February 2007 for $565 million.
- 14 stores were closed and 6 were relocated.
- 35 stores were sold to Apollo Management in June 2007.
That left 54 stores, 12 of which are now for sale (plus one additional Whole Foods Market store) under the deal. If the stores don’t sell in one year, then Whole Foods gets to keep them. If they do sell, then Whole Foods ends up with 42 of the original 109 stores it bought.
In addition, the closed stores -- which total 19 if you include those shuttered by Wild Oats before the deal -- will be sold, along with Wild Oats trademarks. Presumably those shuttered stores were already on the auction block.
The FTC said:
The consent order will restore competition in 17 geographic markets that were impacted by the acquisition. In addition to requiring the transfer or divestiture of all rights to 32 stores, Whole Foods also is required to divest related Wild Oats intellectual property, including unrestricted rights to the “Wild Oats” brand, which retains significant name recognition and loyalty among consumers. These assets will allow one or more Commission-approved buyers to re-establish competition with Whole Foods in the majority of the markets in which the agency alleged the acquisition would reduce competition and harm consumers through higher prices and reduced quality and services.
But the way I see it, this battle costing untold millions came down to 12 operating Wild Oats stores -- or 11% of the total Whole Foods acquired. Those stores created a monopoly? Go figure.
- Samuel Fromartz
NPR's marketplace had a quick segment on organics in light of Whole Foods earnings report due out on Wednesday.
I'm quoted noting that organic consumers who believe strongly in organics will stick with it, but they will seek out value. They key for Whole Foods is how well they execute in value categories and shift their image. (They are succeeding beyond expectations in organic milk, their private label supplier tells me). My overall point was perhaps missed: organic consumers in this climate are shopping value, wherever it is, which is why Whole Foods is emphasizing the segment with products and even tips from its shoppers.
- Samuel Fromartz
By Samuel Fromartz
When the commodity boom and rising food prices took hold last year, optimists argued that this might cause people to switch to organic and sustainable foods, because the premium was no longer so high compared with mass market fare.
I was skeptical of the argument then, and even more so now. There are ample signs that consumers are cutting back in the face of a slumping economy and if anything, downsizing to discount retailers that skew towards cheaper food. Sales of Spam are growing. The more committed organic food shoppers will always be there, but much larger number of dabblers are scaling back, unable to see the real value above the cost.
At Whole Foods, which has built a business on sustainable, organic and high quality perishable foods, sales growth is at a historic low, leading the company to cut back on new store openings and eliminate its quarterly dividend. Executives are emphasizing its value products, many sold under the 365 store brand, and trying to shake its Whole Paycheck image.
I can see why they are concerned. I was shopping in the Whole Foods store in Denver last Sunday in the middle of the day, before heading up to the mountains with the family. Last year, when I was in the same store in Cherry Creek on the exact same weekend, I recall it was bustling. This year, there were fewer shoppers, the aisles sparse.
Continue reading "Will the Economic Bust Stifle Organic Food?" »
The first couple of minutes of this video is hilarious -- kids discussing food and explaining issues like fair trade. It was produced by the Syracuse Real Food Coop in New York state.
As the saying goes, it ain't over til it's over.
The U.S. Court of Appeals for the District of Columbia Tuesday reversed a lower court decision that allowed the world's largest organic and natural foods grocery chain, Whole Foods Market, to buy its rival Wild Oats Markets.
In a 2-1 split, the appeals court ruled that that a lower court made an error when it gave Whole Foods approval last summer to go ahead with the merger, despite the request by the Federal Trade Commission (FTC) for an injunction to block the deal.
The decision sends the lawsuit back to the U.S. District Court for the District of Columbia, where Judge Paul Friedman had presided over the case before being appealed. Although the lower court was instructed to give further consideration to the case, the ruling does not undo the merger.
To date, Whole Foods has sold almost 40 Wild Oats stores, closed a dozen and converted many more to Whole Foods stores.
In a recent interview with ChewsWise, Whole Foods CEO John Mackey said: "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."
The question now is whether the court will try to unscramble the digested eggs.
The Wall Street Journal opines: "The ruling ... may give the FTC a shot at forcing Whole Foods to sell some operations to meet competitive concerns raised by the merger."
“We await the U.S. District Court’s response so this issue can be resolved,” Whole Foods said in a statement. “Meanwhile, it is business as usual.”
- Samuel Fromartz, with contributions from Sustainable Food News
If you’re thinking of grilling this weekend, you might take a look at this recent report, Finding Animal Friendly Food, from the World Society for the Protection of Animals. It surveyed 23 supermarket companies and rated them on humane meat -- the latest in surveys of this type.
Whole Foods Market rated the highest, with twice as many humane meat offerings as the number 2 ranked supermarket in the list, Wegmans, a northeastern chain. Stores within larger chains, such as H.E. Butt’s Central Market and HEB Plus! stores, and Kroger’s City Market stores, also scored high. Wal-Mart ranked near the bottom.
What the survey did not include, however, were smaller stores and co-ops, which may have good choices as well.
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).
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.
Whole Foods CEO John Mackey, vindicated in an SEC investigation of his anonymous postings on a Yahoo message group, is back blogging again at the company's web site. His first post explains his view of the incident with a second from a commencement speech he gave. 
Margaret M. Wittenberg: New Good Food: Essential Ingredients for Cooking and Eating Well
Steven Kaplan: Good Bread Is Back: A Contemporary History of French Bread
Michael Ruhlman: The Elements of Cooking: Translating the Chef's Craft for Every Kitchen
David Mas Masumoto: Four Seasons in Five Senses: Things Worth Savoring
Carl Safina: Song for the Blue Ocean: Encounters Along the World's Coasts and Beneath the Seas
Joan Dye Gussow: This Organic Life: Confessions of a Suburban Homesteader
Charles Clover: The End of the Line: How Overfishing Is Changing the World and What We Eat
Daniel Charles: Lords of the Harvest: Biotech, Big Money, and the Future of Food
Michael Pollan: Omnivore's Dilemma: A Natural History of Four Meals
