Professional Documents
Culture Documents
GROUP H10
Contents
Executive Summary................................................................................................................3
Global Organic Food Industry.................................................................................................4
U.S Organic Food Industry......................................................................................................4
Five Forces Analysis - Organic and natural foods - Industry Analysis....................................4
Whole Foods Market Inc........................................................................................................4
Strategic Game Board Analysis – Whole Foods Market, Inc..................................................5
Scenario Analysis – Winds of change in the Organic foods industry.....................................6
Whole Foods Market – SWOT Analysis..................................................................................8
Whole Foods Market – Competitive Strategy Analysis..........................................................8
Strategy #1: Design solutions with the customer in mind..............................................................8
Strategy #2: Bigger is better, even in focussed differentiation.....................................................10
Strategy #3: Perishables – An imperishable source of success.....................................................11
Strategy #4: Inorganic growth in Organic foods market..............................................................13
Strategy #5: Change is the only constant.....................................................................................15
Strategy #6: Tangibles and Intangibles........................................................................................16
Recommendations................................................................................................................18
Exhibits.................................................................................................................................19
Exhibit 1: Global Organic Foods – Market Value and Forecast....................................................19
Exhibit 2: Global organic food market segmentation...................................................................20
Exhibit 3: Key Players in the Global organic foods industry..........................................................21
Exhibit 4: US Organic Foods – Market Value and Forecast..........................................................22
Exhibit 5: U.S organic food market segmentation........................................................................23
Exhibit 6: Key Players in the U.S organic foods industry...............................................................24
Exhibit 7: Whole Foods - Product Lines / Product Mix - Trademarks and Subsidiaries.................27
Exhibit 8: Porter’s - Five forces analysis of US Organic foods Industry.........................................28
Exhibit 9: Whole Foods Market - History of Acquisitions..............................................................31
Exhibit 10: Whole Foods Market - Product Mix............................................................................35
References............................................................................................................................36
Executive Summary
Whole Foods Market, Inc. is a very interesting and rich study in terms of strategy
because there are so many different facets of strategy one could observe in the footnotes of
its history. In each segment of analysis starting from analyzing the industry structure in
changes made to counter the growing competition and decreasing consumer confidence on
have tried to link this analysis with our course concepts. In trying to do so, we have gained
new perspectives which have enabled us to appreciate the power of the tools and
techniques taught during this course and learned how to collate and use information from
multiple sources.
Global Organic Food Industry1
The market value of the global organic food market has seen a substantial increase in the
past few years; however this growth has been at a gradually decelerating rate. The turnover
for the worldwide organic food market was $60 billion in 2009, and this grew at a 14.6%
CAGR (Compound Annual Growth Rate) over the years 2005 – 2009.
Refer Exhibit 1 for the market value and forecast for Global organic foods industry
Refer Exhibit 3 for key players(excluding Whole foods) in the global market
While the market value of the US organic food market has seen a substantial increase in the
past few years; the growth rate has been gradually decelerating. The revenue for the
organic food market in the US was $25.7 billion in 2009, and this grew at a 16.8% CAGR
Refer Exhibit 4 for the market value and forecast for the U.S organic foods industry
Refer Exhibit 6 for key players(excluding Whole foods) in the U.S market
The players in the organic food market are taken to be the producers of organic food for the
purpose of the Five Forces Analysis, in the next page. Detailed analysis in Exhibit 8
“Whole Foods is a leading retailer of natural and organic products. It owns and operates a
subsidiaries.”2 Headquartered in Austin, Texas, it operates in the US, Canada and UK,
1
Data Monitor: Global Organic Food (Industry profile): Publication date – Dec 2009
2
Data Monitor: Whole Foods Market Inc. (Company profile): Aug 2009– Page 4,5
employing close to 52,900 people. 275 retail stores are operated, of which there are “264
stores in 38 US states and the District of Columbia, six stores in Canada, and five stores in
the UK.”3
Supporting its store operations are its Austin headquarters and 11 regional offices, regional
processing facilities and a confectionary, amongst others. Product mix, product categories,
3
Data Monitor: Whole Foods Market Inc. (Company profile): Aug 2009
Scenario Analysis – Winds of change in the Organic foods industry4
When Whole foods market opened its first store in 1981, the world was quite a different
place. The consumers had no idea where their food came from, where it was produced,
what was used to produce it, and the farming/harvesting/growing methods use to produce
the foods. There were few government and FDA regulations which required publishing this
Some factors which affected the growth of the organic and natural foods industry were
4
MarketBuster – Whole Foods Market, Inc. – Lindsay Hutt
The median income for the US household grew during this period. So people who
wished could spend more on getting foods which were perceived healthier.
The organic and natural food market was quite fragmented during this period. There were
no big players, no organized retail, no nationwide chains, and no reputed brands in this
space at this time. There had always been small players who sold different types of organic
and natural products like farm produce, grocery, meat and poultry, bakery, seafood,
vitamins, fashion and body care products, coffee and tea, and nutritional supplements. But
none of these players carried more than a couple of categories of these products. The shops
The big players in the foods industry who supplied groceries / meat / fresh produce to the
consumer did not realize the potential of this market right away. Even if they realized, they
Relatively smaller size of this segment. Although this market was growing at a rapid
pace, the capabilities required to cater to this class of customers were very different
from the average Joe these supermarkets were aimed at and therefore, the smaller
size of this segment may have proved a detrimental effect in the major players’
and natural foods market (suppliers who could produce organic and natural foods)
would have been an entry barrier and would have required quite a significant
investment.
segment waiting to be tapped. However, the challenge of catering to this market segment
was manifold and the strategy involved behind some of the major decisions/operational
Once John Mackey decided to enter the organic foods business, conventional wisdom would
have indicated that he go after a particular type of the produce (fresh produce or groceries
or organic meat etc.,), as this was the way in which the existing players catering to this
customer operated. However, John Mackey decided to defy conventional wisdom and think
5
MarketBuster – Whole Foods Market, Inc. – Lindsay Hutt
Beth says “As an organic produce consumer, I am committed to using organically and
naturally produced vegetables/ fruits / meats / other items. However, I need to put in a lot
of effort to procure all the items I need. To make my coleslaw salad, I need to travel 10 miles
to the southeast of the town to buy the organic lettuce that Jack’s sells. I also need to go to
Free Range Chicken to buy free-range chicken and organic eggs to make roasted chicken and
poached eggs, which my son really likes. Free Range Chicken is my favourite store and it is
located 15 miles to the north-east of the town. Since I have to travel in so many different
directions and to different stores to get all these items, sometimes I have to compromise on
my promise of buying only the best organic and natural foods for my family”
John Mackey’s vision and ability to think from the customer’s point of view led him to
develop the concept of ‘Organic and Natural Foods Supermarket’. He opened his first store,
an 11000 sq. ft supermarket in Austin, Texas.6 This ability to think from the customer’s
needs and wants(latent and explicit) point of view is at the forefront of most successful
6
Hoovers Company Records, Whole Foods Inc.
business ideas and often times, as it does here, it leads to a radically new product/service.
This concept has been persisted with ever since Whole foods began its operations. The
numbers are the ‘proof of the pudding’, so to speak. Given above are the profitability ratios
of Whole foods, its competitors and the industry as a whole for the past 5 years. 7
7
Whole Foods Market, Inc. Profile - Hoovers
The concept of organic and natural foods supermarket is understood by answering this
question: “Instead of limiting the type of natural and organic products that it carries, why
not bring the entire gamut of organic and natural items (produce / meats / dairy /
vegetables / fruits / fashion and body care/vitamins etc.,) under the same roof, in the form
Capture all the organic/natural item needs of the organically inclined customer, who
would otherwise be less inclined to buy all the organic and natural items he/she
Provide a platform to convert audience who wanted to buy only a specific type of
product (organic or normal) to buy organic and natural produce which would in turn
Conventional strategy teaches that in cases where firms cater to niche segments of
customers, usually they charge premium prices, create demand through limited supply, and
create prestigious affinities to promote the product. Measures that promote sense of
exclusivity are pursued to create a sense of pride and belonging. Developing brand loyalties
are heavily invested on. By nature, exclusivity does not lend itself well to supermarkets, big
stores etc. Also note that supermarkets by their format of providing most things together in
However, John Mackey cleverly provided the exclusivity / brand image to a supermarket
format by identifying the Whole Foods stores with ‘Organic and natural foods’. Since this
consumer was and is still a minority, that image transfers itself to the supermarket
associated with only ‘Organic and Natural foods’. This provided John Mackey with the
following opportunities
There was virtually no competition because he had developed a supermarket for
organic and natural foods, whereas the existing providers serviced only certain
Where competition is lesser, profits are generally more, provided demand for the
Whole Foods could charge premium prices as there were customers who were
“Our sales have grown rapidly through new store openings, acquisitions and comparable
store sales growth, from approximately $92 million in fiscal year 1991, excluding the effect
fiscal year 2009, a compounded annual growth rate of approximately 28%. We are a
much more difficult type of product to handle and sell. Capabilities which are rare/unique
and difficult to imitate should be leveraged by a firm to maximize profits and to create a
sustainable competitive advantage. 2/3rd of the revenues of Whole foods market is through
8
FORM 10-K, Whole Foods Market, Inc. Fiscal year 2009 Page 4
The following statements in the annual report re-affirm the importance of perishables as a
“We offer a broad and differentiated product selection with a strong emphasis on perishable
foods designed to appeal to all shoppers..... We believe our heavy emphasis on perishable
products differentiates us from other supermarkets and helps us attract a broader customer
base…… We believe it is our strength of execution in perishables that has attracted many of
Perishable products are by nature difficult to handle as there is a strict time sensitivity of
Difficult to
Capabilities Valuable (?) Rare / Unique (?) Sustainable(?)
Imitate (?)
Handling Perishables 100 100 100 100
Since we have a product category where Whole foods’ execution offers all of the above
Firms can grow through organic means (opening new stores/store expansions) or inorganic
means (through mergers and acquisitions). Whole Foods has been growing primarily
through inorganic means. During the last few years, they have also strived to grow through
expansion of their stores. 23% of their existing store space was acquired with
The organic and natural foods market is still highly fragmented. There were many
potential targets to pick from. We suspect this led to increase in bargaining power
for Whole foods, thereby enabling them to pursue some good value deals. So, when
Whole foods wanted to move into a new territory or wanted to expand to a new
product, they can actively scour the market for potential acquisitions in that space.
This reduces the lead-in time for expansion in a particular market / service.
However, there are many factors for an acquisition or merger to be successful. Some
o Attractiveness Test: Is the organic and natural foods market attractive? Will it
remain attractive?
o Test of Fit (Synergy): Will the acquisition/merger provide Whole foods with
As mentioned in their annual report, we can expect them to further continue with their
“Whole Foods Market’s growth strategy is to expand primarily through new store
openings….We have also grown through acquisitions, with approximately 23% of our
11
FORM 10-K, Whole Foods Market, Inc. Fiscal year 2009 Page 11
12
Mergent Online: Whole Foods Market, Inc.
existing square footage coming from acquisitions. Because the food retailing industry is
highly fragmented and comprised of many smaller local and regional chains, we may
continue to pursue acquisitions of smaller chains that provide access to desirable areas,
The impact of acquisitions on the total gross footage and the number of stores in operation
over the past 5 years can be drawn as below 14. A major part of the growth between 2007
and 2008 can be attributed to one big acquisition of Wild Oats Inc.
The number of stores has grown from 163 to 275 in the space of 5 years (68%
growth). The total gross footage has grown from 5.82 million sq-ft to 10.56 million
sq-ft (81% growth). The gross profit has grown from $1.65 billion to $2.75 billion
(66% growth)
As we see from the above data, the improvement in gross profitability seems to be a
13
FORM 10-K, Whole Foods Market, Inc. Fiscal year 2009 Page 11
14
FORM 10-K, Whole Foods Market, Inc. Fiscal year 2009 Page 11-12
Strategy #5: Change is the only constant
Although Whole foods market has had some setbacks during the recession, it has bounced
back strongly compared to its competitors and the market. One main reason is that they
have made quite a few changes to their strategy, recognizing the needs of the hour. Some
strategic changes, their intended reasons and their consequences are discussed below 15
During the past 5 years, Whole Foods has focussed towards right sized stores 16
instead of building bigger stores. Instead their store sizes are being reducing by the
year. This is basically aimed at cutting operating costs. Stores are usually located in
premium real estate sites and hence cost of unutilized or inefficient sizing is high.
Whole Foods Market Inc. Stores 2009 2008 2007 2006 2005
Stores in development 53 66 87 88 65
Average size (gross square feet) 45,000 49,000 51,000 56,000 55,000
Total gross footage in development 2,410,000 3,294,000 4,485,000 5,003,000 3,626,000
YoY change in footage development -27% -27% -10% 38% 40%
Source: Form 10-K, Whole foods market, Inc.
17
During the recession in years 2008 and 2009, US consumers suffered a confidence
crisis and they searched for the best bargains that they could get. This drove them
to stores like Wal-Mart which advertises low prices on all items. To improve sales
volumes and profitability during this period, Whole foods market had to build the
customers of the value proposition that Whole foods delivers at low prices.
This was also a response to Wal-Mart gaining traction in the natural and
15
Whole Foods Market, Inc. Profile – Hoovers
16
Whole Food, Inc.- Annual Report 2009
17
Whole Foods Market, Inc. Profile – Hoovers
o It introduced the concept of ‘Value Guru’ who would lead store searches for
best bargains. This move was aimed at promoting the low cost perception
“An extension of our leadership position in the natural and organic foods
industry is our strong family of private label brands..... These products are
designed to cover the full spectrum of category needs: from the highest
carry the same promise as the parent brand and therefore, lead to
Strategic Initiatives /
Attribute Expected Benefits
Tactics
First grocer in the US to
Consumers are happy to pay the higher
be certified 'Organic'.
Quality - prices for the highest quality certified
Voluntary third Party
Certifications products. Therefore, ability to charge
inspections on Quality of
and Assurance premium prices and therefore improve
products. "Most Humane
profitability.
Grocery Store"
Business Promote Locally Grown - By promoting local producers, they are
Strategy - $2.7 m in loans to 45 local gaining the vote of the local people,
18
FORM 10-K, Whole Foods Market, Inc. Fiscal year 2009 Page 10
reducing opposition to stores, getting an
Supplier Buy-In producers assured supply of produce and distributing
risk.
Initially stores were By starting the stores in counterculture
started in college towns hotbeds, mostly college towns, Whole
Operational
primarily. Now, stores are foods was able to start stores where it
Strategy - Site
situated in high density expected most of its customers lived and
Selection
shopping areas and are in thereby increase potential sales and
a mall or freestanding ensure minimum profits.
Their business strategy statement
emphasizes their outlook towards the
Business "Whole Foods, Whole world. This is a form of 'Cause- Marketing',
Strategy - People, Whole Planet" & where they have united the consumers
Vision, Mission, recently, "Whole who identify with their cause of highest
Consumer & Paycheck" - Donating 5% quality, community service. This helps
Employee of after-tax profits to not- them build a strong brand and this in turn
satisfaction for-profit organizations helps them survive and prosper through
good and bad times and also improve
profitability.
Employee empowerment and morale
boosting resulting in reduced turnover
Team approach to store from 23% in 2008 to 12% in 2009, very low
Business &
operations - self managed for food retailing industry. Reduced
Operational
teams within store. 'Training Costs', improved customer
Strategy -
Product mix & pricing service, improved customer satisfaction
Employee
decisions at store level resulting in improved sales and profits.
Empowerment
made by teams. FORTUNE magazine’s “100 Best Companies
to Work for in America.” - 12 consecutive
years
Marketing spend - 0.4% -
among the lowest in
supermarkets. Spend
Local community customized marketing
Business divided into separate
instead of 'One size fits all' marketing.
Strategy - budgets for each store
Expected to bring 'word of mouth' and
Marketing which decides how and
more efficient use of marketing spend.
which not-for-profit
organizations it wants to
support
Natural Products The Green movement has been gaining a
Association’s “2009 strong foothold in the US during the past
Socially Responsible decade. To capture this set of customers
Retailer Award” - 2009 and to affirm their commitment towards
Green Choice Green Choice the society, nature and environment, these
Award from Natural initiatives were driven. The intangible
Health magazine - output is gaining a new set of customers
Environmental Protection and a stronger brand image leading to all
Agency (“EPA”) Green the benefits of a strong brand
Power awards
from 2005 through 2008 -
Leadership in Energy and
Environmental Design
(“LEED”) certification
Recommendations
Whole foods market should continue to invest on improving the efficiency of their
execution on the perishables segment of the organic and natural foods market. This
operations space. Not a lot of firms can execute this strategy except for maybe
Europe as a potential market. European markets account for 47.9% of the global
organic foods market.19 However, the firm might face quite a few entry barriers in
they might be based on geography, execution know-how for an Europe based plan,
government regulations etc.,. The firm’s can diversify its geographical risk if it can
It will be interesting to track the progress of Whole Foods Market from this point in time.
19
Data Monitor: Global Organic Food (Industry profile): Publication date – Dec 2009
Exhibits
By the end of 2014, the market value is estimated to be $96.5 billion representing a 60.7%
increase since 2009 at a predicted CAGR of 9.9% over the years 2009 – 2014.
20
Data Monitor: Global Organic Food (Industry profile): Publication date – Dec 2009
Exhibit 2: Global organic food market segmentation 21
Market Segmentation by Category: In 2009, the contribution of the fruit and vegetables
segment to the global organic food market’s revenues was 31.5%, while that of the
Market Segmentation by Geography: In 2009, 48.7% of the market value of the global
organic food market was generated by the Americas, while Europe contributed 47.9%.
21
Data Monitor: Global Organic Food (Industry profile): Publication date – Dec 2009
Exhibit 3: Key Players in the Global organic foods industry
Note: Whole Foods Market Inc. will be explained in later sections, and hence has not been
Wal-Mart Stores Inc: As the leading retail company worldwide, Wal-Mart has retail
stores in numerous formats globally. Discount stores, supercenters, Sam’s clubs etc, are
some of the retail store formats in the US. Everyday Low prices are offered at its retail
stores. For the Financial year ended January 2009, a turnover of $401,204 million was
generated.
Carrefour S.A: Carrefour has the dual distinction of being the world’s second largest
retailer after Wal-Mart, and the leading retailer of groceries and consumer goods in
Europe. The grocery store formats operated include hypermarkets, hard discount,
supermarkets and convenience stores, with Carrefour leading the hypermarket retailer
space globally. For the Financial year ended December 2008, a turnover of $129,096
Tesco PLC: Headquartered in the UK, Tesco is a food and grocery retailer with stores in
14 countries globally. The various store formats operated by it include Express, Metro,
Superstore, Extra and Homeplus. For the Financial year ended February 2009, a turnover
22
Data Monitor: Global Organic Food (Industry profile): Publication date – Dec 2009
Exhibit 4: US Organic Foods – Market Value and Forecast23
The largest contributor to the market’s overall value in 2009 was the Fruit and Vegetables
segment with revenues of $9.5 billion (corresponding to 37% of the market’s value). By the
end of 2014, the market value is estimated to be $42 billion representing a 63.3% increase
since 2009 at a predicted CAGR of 10.3% over the years 2009 – 2014. The market forecast
23
Data Monitor: Global Organic Food (Industry profile): Publication date – Dec 2009
Exhibit 5: U.S organic food market segmentation24
Market Segmentation by Category: In 2009, the contribution of the fruit and vegetables
segment to the US organic food market’s revenues was 37%, while that of the ‘Prepared
Market Segmentation by Geography: In 2009, 42.9% of the market value of the global
organic food market was generated by the United States, while Europe contributed 47.9%.
24
Data Monitor: Global Organic Food (Industry profile): Publication date – Dec 2009
Exhibit 6: Key Players in the U.S organic foods industry25
Note: Whole Foods Market Inc. will be explained in main text, and hence has not been
Wal-Mart Stores Inc: Wal-Mart is the world’s largest retail company operating in various
retail store formats globally. Discount stores, supercenters, Sam’s clubs etc, are some of
the retail store formats operated by Wal-Mart in the US. Wal-Mart offers a wide variety
of products at Everyday Low prices (EDLP) at its retail stores. In the US, Wal-Mart
operates in all the 50 states. It has 891 discount stores (average size of 108,000 square
states and 153 neighbourhood markets (average size of 62,000 square feet) in 16 US
states. 121 distribution facilities are operated in the US to support Wal-Mart’s US retail
operations. Of these, 106 are owned by Wal-Mart and the remaining by third parties.
For the Financial year ended January 2009, a turnover of $401,204 million was
generated. In FY 2009, Operating profit was $ 22,798 million and Net profit was $ 13,400
25
Data Monitor: Global Organic Food (Industry profile): Publication date – Dec 2009
The Kroger Co: As a leading grocery retail chain the US, supermarkets and multi-
department stores are operated by Kroger under numerous banners such as Kroger, QFC
, King Soopers, Ralphs, Fred Meyer, Smith's, Food 4 Less, Fry's, Dillons, and City Market.
of $76,000 million was generated. During FY2009, Operating profit was $ 2451 million
and Net profit was $ 1249 million. Refer key financials of the company given below
The Hain Celestial Group, Inc26: Hain specializes in the “manufacture, marketing and
distribution of natural and organic foods and personal care products in over 50 countries
around the world.”5 With headquarters in Melville, New York, Hain mainly operates in
US, Europe and Canada, by selling its products to specialty and natural food distributors,
natural food stores, and other supermarkets, retail classes of trade such as drug stores,
mass-market retailers, food service channels etc. The company categorizes the segment
it operates into grocery, teas, snacks, proteins, personal care products, and others, i.e.
on the basis of product divisions. In the Financial year ended June 2009, a turnover of
$1135.3 million was generated. In Fiscal 2009, a net loss of $24.7 million was reported,
26
Data Monitor: Global Organic Food (Industry profile): Publication date – Dec 2009
in comparison to a net income of $41.2 million in 2008. Refer Key Financials of the
Sourcing majority of its food from natural food vendors, the product categories offered by
Whole Foods include grocery, seafood, bakery, meat and poultry, prepared foods and
catering, specialty (beer, wine and cheese), nutritional supplements, coffee and tea,
vitamins, body care and educational products such as books, pet products, floral, and
household products.
With its private label products amounting to greater than 2300 SKUs (Stock Keeping Units), 365
Everyday Value, 365 Organic and the Whole Brands family are the brands used to market its private
label products. Store-made and regionally made fresh products are sold under the Whole Foods
Market label, while specialty and organic coffee, tea drinking chocolates are sold through its
The various trademarks owned by the Company and its subsidiaries are listed below:
“Whole Foods Market; 365 Everyday Value; 365 Organic Everyday Value; AFA; Allegro Coffee
Company; Wild Oats; Wild Oats Marketplace; Capers Community Market; Bread & Circus;
Fresh & Wild; Fresh Fields; Global Local; Green Mission; Harry's Farmers Market; Merchant
of Vino; Mrs. Gooch's; Vine Buys; Wellspring; Whole Baby; Whole Foods, Whole People,
27
Data Monitor: Whole Foods Market, Inc. (Company profile) - Aug 2009
28
Data Monitor: Whole Foods Market, Inc. (Company profile) - Aug 2009 – Pg. 4,5
Exhibit 8: Porter’s - Five forces analysis of US Organic foods Industry29
Buyer Power: As food retail is rather fragmented in the US, the bargaining power of
eliminated by the player) are the main buyers. As the inclination towards healthy eating
However, products are increasingly directly sold to the end consumers, as they are from
large retail chains such as Wal-Mart. In the event of direct supply to end consumers, as
organic foods are perceived to be healthier and ‘naturally’ produced, consumer demand
Supplier Power: Organic farmers are the main suppliers in the market. These farmers
supply for the main segments of this market such as fruit & vegetables, prepared foods,
beverages, meat, fish, poultry, dairy etc. as they cultivate organic products, rear animals
etc. As Organic farming avoids the utilization of chemicals, the effort required by the
farmer is greater, but this also results in an increased influence on the market.
Some suppliers directly sell organic food to the public through farmers markets. On
account of this forward integration, they are able to directly reach the end consumers,
suppliers is relatively small, the organic farmers do not have much influence on the
market.
Factors which are of great importance to the retailer include the product quality and
entered into between the retailers and suppliers. Supplier choice is also limited for a
29
Data Monitor: Whole Foods Market, Inc. (Company Profile) - Aug 2009
countries, key players are dedicated to various standards when dealing with a supplier,
However, large retailers such as Wal-Mart etc. put pressure on the smaller suppliers, as
they command more power and are therefore at an advantage over the small suppliers.
New Entrants: New entrants to the market include an existing company expanding into
organic produce, or a new company set up. Due to limited shelf space in retail stores and
entry is lower. However, strong growth in the markets attracts potential entrants. By
the main segments of the organic food market, i.e., fruit & vegetables, prepared food,
dairy & beverages etc. While the benefits of these substitutes are not very significant in
terms of health when compared to organic products, they are more reasonably priced,
and available in greater quantities. Hence, they pose a strong threat to the market
Competitors: Strong growth in the market reduces the intensity of competition between
the players in the market. Even though the main market segments are quite varied,
players cannot effectively distinguish themselves from others. Despite the limited
product differentiation, however, rivalry is slightly reduced as players offer a wide range
30
Data Monitor: Whole Foods Market, Inc. (Company Profile): – Aug 2009
balanced by strong market growth easing rivalry at one end to a lack of differentiation
In Nov. 1991, Co. acquired Wellspring Grocery, Inc. for $769,000 in cash, a $100,000 note
On Oct. 12, 1992, Co. acquired all of the outstanding stock of Bread &Circus, in exchange for
approx. $20,000,000 in cash plus $6,200,000 in newly issued Co. common stock.
In Jan. 1993, Co. acquired 83.3% of Sourdough: A European Bakery, Inc. at a total cost of
$1,142,000, which included $643,000 cash and 35,738 shares of Co. common stock.
On Sept. 10, 1993, Co. acquired Mrs. Gooch's Natural Food Markets, Inc. for 2,970,596
In Feb. 1995, Co. acquired two natural foods supermarkets in Northern California doing
business as Bread of Life and a natural foods supermarket in Florida operating as Unicorn
Village Ltd.
In Dec. 1995, Co. acquired a natural foods store in Evanston, Ill., doing business as Oak
On Aug. 30, 1996, Co. acquired Fresh Fields Market, Inc., which operated 22 natural foods
supermarkets in exchange for approx. 4,800,000 shares of common stock, plus the
Subsequent to Apr. 13, 1997, Co. acquired two stores in South Florida doing business as
Bread of Life in exchange for approx. 200,000 shares of newly issued Company stock.
In Aug. 1997, Co. acquired the outstanding shares of The Granary Market in exchange for
In Dec. 1997, Co. acquired Allegro Coffee Company in a stock merger. Co. issued approx.
In Dec. 1997, Co. acquired Merchant of Vino, which operates four gourmet/natural food
supermarkets and two specialty wine and gourmet food shops in the greater Detroit
In Apr. 1999, Co. acquired the outstanding stock of Nature's Heartland, Inc., which operated
four natural foods supermarkets in the greater Boston metropolitan area, in exchange for
In Sept. 1999, Co. acquired 800,000 shares of common stock from Real Goods Trading
Corporation for $3,600,000, or $4.50 per share. The newly issued shares give Co. a 16.4%
Effective Jan. 14, 2000, Co. contributed its Amrion, Inc. and WholeFoods.com, Inc.
In Feb. 2000, Co. acquired substantially all of the assets of Natural Abilities, Inc., which
operated three natural foods supermarkets in the Sonoma County, California area, in
exchange for approx. $25,700,000 in cash plus the assumption of certain liabilities.
Effective June 30, 2000, Co. and Gaiam Inc. merged their Internet properties into a newly
formed company named Gaiam.com Inc. Following the merger, Gaiam will own 50.1% of
In May 2001, Co. completed the sale of all of its interest in the NatureSmart business of
cash.
On Oct. 31, 2001, Co. acquired certain assets of Harry's Farmer's Markets, Inc., in exchange
On Oct. 27, 2003, Co. acquired certain assets of Select Fish LLC (Select Fish) in exchange for
In Jan. 2004, Co. acquired Fresh &wild. On Jan. 31, 2004, Co. acquired all of the outstanding
stock of Fresh &Wild Holdings Limited (Fresh &Wild) for a total of approximately
$20,000,000 in cash and approximately $16,000,000 in Co. common stock, totalling 238,735
shares.
On Aug. 28, 2007, Co., through its wholly−owned subsidiary, purchased 25,175,997 common
stock of Wild Oats Markets, Inc. by means of a tender offer for all of the outstanding shares
of Wild Oats at a price of $18.50 per share, or approximately $565,000,000 plus the
locations and a related Riverside, CA distribution centre, to a subsidiary of Smart &Final, Inc.
Organic Food in the United States – Industry Profile – Datamonitor – Dec 2009
Hoover’s Company Records – In-depth Records – Whole Foods Market, Inc. – Jun 2010
www.wholefoodsmarket.com