CUTTING EDGE COMPANIES: Fall 2001
SOCIAL TOPICS (Archive): CUTTING EDGE COMPANIES
CUTTING EDGE COMPANIES
Whole Foods Market
Published, Fall 2001
By Ken Scott
This column highlights companies in the business of providing solutions to social and environmental challenges. Featured companies are typically held in the SmallCap Innovations portfolios offered to Walden’s clients.
What began with one store in Austin, Texas, has grown into the world’s largest natural and organic foods supermarket chain. By summer of 2001, Whole Foods Market (ticker: WFMI) had 123 stores in 22 states plus the District of Columbia, with 24 more stores under development. The stores sell a wide range of organic and natural foods, beverages, personal care products and household goods, as well as nutritional supplements. The company’s motto is “Whole Foods, Whole People, Whole Planet.” Its mission includes supporting sustainable agricultural practices and educating customers about the nutritional and environmental aspects of its products.
Whole Foods is committed to sustaining local organic farmers in addition to larger firms. The company has also adopted a multipronged strategy regarding genetically engineered (GE) foods. Whole Foods and its rival Wild Oats Markets (ticker: OATS) have promised to eliminate GE foods from their privately labeled foods, setting the standard for U.S. supermarket peers. Whole Foods also favors a moratorium on GE agriculture until further safety testing is done, and supports mandatory labeling of GE foods – a move that Walden has encouraged other retailers to follow. Whole Foods has engaged its customers in a postcard campaign encouraging labeling. The company’s website www.wholefoodsmarket.com, has an Issues & Actions section that features other campaigns related to healthy and sustainable foods.
Whole Foods has also been named by Fortune as one of the “Top 100 Companies to Work for in America.” Acupuncture is among the health benefits for “team members,” as employees are called, and the company offers domestic partner benefits. Whole Foods has capped its CEO pay at ten times that of the average worker. And team members receive productivity bonuses and paid time to volunteer up to 40 hours per year on local community projects. Whole Foods also gives 5 percent of profits to community and nonprofit organizations.
One area of concern is the company’s and its CEO’s strong anti-union stance. New stores have been picketed; no employees are unionized; and Whole Foods did not support the grape boycott. Walden urged management to endorse the United Farm Workers’ Strawberry Workers’ Campaign.
Ken Scott is a research analyst and portfolio manager of Walden's SmallCap Innovations portfolios.
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