Executive Summary

“Whole Foods Market going Germany”

Course: Global Marketing Management

Prof.: Frank Pons

1st October 2010

Andrea Sutorius

Daniela Elsner

Karolina Yao

Ruta Jonuseviciute

Mario Sanchez
General Information on Whole Foods Market

Whole Foods Market, initially founded in 1980 in the US, is an American supermarket focusing on the
distribution of organic and healthy food. Until today the food chain expanded via acquisitions of other healthy
food chains and store buildings and grew to 270 stores in the US, Canada and the UK.

Whole Foods is not only appreciated for its wide range of products and services (such as culinary education
classes), but also for its mission and core values, which respect the product quality as well as the people and
the implications of its business for the whole world. Their mission is to offer the highest quality as well as the
least processed, most flavorful and natural foods possible. Therefore, it does not use artificial additives,
sweeteners, colorings and preservatives. Furthermore, Whole Foods Market engages itself environmentally
and socially (e.g. organic farming and sustainable agriculture, donations to local non-profit groups).

SWOT-Analysis

Figure 1: General SWOT-Analysis

German Target Group

Half of the German population (income-stronger and better educated group) occasionally buys organic food
(fulfillment of demand < 5 %). They are interested in healthy consumption solutions. Relevant groups
represent the Lifestyle-Ecos (8%) and the Eco-Convinced (3%). The market for organic food in Germany is
constantly growing (between 2001 and 2007 it doubled its size). Main reasons for buying organic food are:
better taste, no pesticide pollution, environmental protection and protection of animals and regionalism. In
addition, Germans spend 23% more money on organic food than Americans.

2
Competition in the German Market

Figure 2: Main Competitors In The German Market

Reformhaus

Founded in 1900, Reformhaus is a traditional German which concentrates on healthy food, rather than on
organic food and wants to promote a healthy lifestyle. It sells groceries (mostly vegetarian and limited
selection), cosmetics, personal care, over-the-counter pharmaceuticals. For these reasons, it is not a direct
competitor to Whole Foods Market.

Alnatura
Alnatura (54 stores, all over the country) is an organic food chain that distributes its products via own stores
and retail chains (like dm und tegut).

denn’s
denn’s BIOMARKT (53 stores, all over the country) is an organic food store with a focus on organic food
rather than healthy food. Furthermore, it gives high importance to fair trade and organic seals. As an
additional service, denn’s runs its own restaurant (Bio-Bistro) within its stores and therefore comes closer to
the healthy lifestyle solution Whole Foods Market offers.

Basic
Basic (24 stores, all over the country) as well offers its’ customers the traditional range of organic products,
but just like denn’s also includes the service of the basic-bistro. Additionally to Whole Foods Markets
services, it also gives the customer access to an online shop.

Weight Watchers
Weight Watchers is a network concentrating on training people how to consume wisely and how to achieve
results while doing diets. It distributes own products via an online store and retail chains (only a small
product range). However, it focuses on a healthy lifestyle rather than on organic aspects.
3
Execution
Main aspects of our market entering strategy
We want to introduce a new shopping experience to the German Market and slowly penetrate it in order to
be competitive to local organic food stores. Doing so, we want to stay with the traditional company image
and focus on organic and healthy lifestyle solutions.

Product, Price and Production Aspects

Mainly we want to keep Whole Foods Market Brands and only adapt the product range to the local
consumption behavior. For example, different kinds of Soda (with taste) or syrups will not be sold as they do
not fit the German consumption patterns. The price should increase around 10%, as we believe our target
groups are at least willing to pay this markup. Considering production, we want to produce locally in order to
be able to fulfill demand, especially when our market grows. Therefore, we first want to subcontract local
production sites. Later we estimate to profit from our targeted acquisition of Alnatura Produktions- und
Handels GmbH.

Advertisement
First, we do not want to present our products in the advertisement, but promote awareness of the topic to
attract attention within the new market. In a second step, we will focus on healthy food aspects. Multimedia
channels are supposed to be: local radio, local web advertisement, newsletter with coupons and recipes,
billboard advertising in cities, advertisement on busses, In-store touch screens, our own paper bags and
(later) short TV spots. Doing so, we want to follow our mission and try to be as environmental-friendly as
possible.

Distribution plan
Our first flagship store will open next year in Munich,
as the Bavaria offers the biggest market for organic
food. Stores in Munich, Cologne and Berlin will follow
next. Meanwhile, we also plan to acquire Alnatura.
Alnatura is not our biggest competitor, however it sells
its’ own well-known brand and therefore easily can be
integrated into the Whole Foods Market Brand offer.
Furthermore, Alnatura owns its own stores but is also
present in retail chains and can propose another retail Figure 3: Distribution Plan
possibility to Whole Foods Market. Additionally, stores
are spread all over the country (focus on the South as well) and have a similar interior design to Whole
Foods Market, which means stores could easily be adapted.

Finances
Costs related to new store openings will be 3.7 million € in 2013, 2.8 million € in 2014 and 3.5 million € in
2015. Expected sales are demonstrated in Figure 4 and revenues in Figure 5. Figure 6 demonstrates that
Whole Foods Market in Germany will be profitable by the end of 2016.

4
Figure 4: Expected Sales 2013 - 2015

Figure 5: Expected Revenues 2013 - 1018

Figure 4: Loss-Profit Graph