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Whole Foods Market: A Brand Analysis
 

Whole Foods Market: A Brand Analysis

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In December I was asked to pull together a brand and design presentation on a brand of my choice. I went with one of my favorites: Whole Foods Market....

In December I was asked to pull together a brand and design presentation on a brand of my choice. I went with one of my favorites: Whole Foods Market.

The presentation includes brand and market background information, an analysis of the brand, its market audience and reach, as well as potential solutions for its growth and expansion. Enjoy!

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  • I’ll be taking you on a little journey today, which started with me receiving your task when sitting on the train to Brussels at the end of last week. …But I though, why not do the first brand that pops into my head, a brand that’s been part of my life for many years now. One that is reliable, supportive of my lifestyle always, a brand I’ve been loyal to and that I can always trust. Kind of like this very practical, supportive paper back. No, it’s not the most glitzy and beautiful thing in the world, but it does exactly what it says on the tin, and it’s always there for me when I need it.As they say, seeing is believing and so I brought us something straight from the source to enjoy during the presentation as well.
  • Note: Unilever makes around $60 billion, Carlsberg $11.8 billion and, similarly to Whole Foods, Cadbury makes around $9.97 billion. (Taken from IMAP Global Food and Beverage Industry Report 2008: http://www.imap.com/imap/media/resources/IMAP_Food__Beverage_Report_WEB_AD6498A02CAF4.pdf1) United States Security and Exchange Commission:http://www.sec.gov/Archives/edgar/data/865436/000110465910059917/a10-19737_110k.htm
  • Stores in US 38 states.London: Soho, Stoke Newington, Camden, Clapham, Kensington
  • Something interesting to keep in mind is the fact that they traditionally expanded through acquisitions, which they did here in London with the 7 Fresh and Wild stores. Here you see the different companies they decided to take over and expand through, something that’ll be part of its future growth. Graph: Wikinvest, ‘Historical Performance on Whole Foods Market’: http://www.wikinvest.com/stock/Whole_Foods_Market_(WFM)Additional info: The Company conducts its business through various wholly owned subsidiaries.
  • Any company worth its salthonours its CSR goals. Whole Foods has quite a lot of them, they’ve been honored for quite a lot of these and their success says a lot about the company.It also received the EPA Green Power Award in 2004 and 2005, and Partner of the Year award in 2006 and 2007:http://www.epa.gov/greenpower/partners/partners/wholefoodsmarket.htmAnimal Compassion Foundation: http://blog.wholefoodsmarket.com/2006/11/animal-compassion-foundation-pickled-vegetables-and-persimmons/Whole Planet Foundation: http://wholeplanetfoundation.org/ Additional info:Grist, Independent Green News: http://www.grist.org/article/so-fresh-so-clean“The company plans on purchasing 458 gigawatt hours of wind energy credits. This will keep about 700 million pounds (300,000 metric tons) of carbon dioxide emissions out of the atmosphere. This is equivalent to taking 60,000 cars off the road or planting 90,000 acres (360 km2) of trees.
  • So now let’s have a look at the complete Whole Foods Experience.For myself, it’s a brand I interact with on a regular basis, and it suits my lifestyle choices, even when I adapt and change them as I did this year (cutting meat and dairy from my diet.)Furthermore, I relate to the brand, its characteristics and enjoy what it stands for or seems to stand for. I have established a relationship with the brand over the years and am happy to identify with it.But let’s have a look at how it does it ….
  • As any customer would, I need to justify spending my hard-earned money with good reason and logic. Therefore, the first things that help me evaluate my shopping experience are based on logic and practicality, more than anything else. (Or so I like to think.)Product choice:- 17 choices of coffee beans Grind your own coffee beans and make your own fresh peanut butter 100 different olive oils 40 types of sausage 50 types of fresh juices The Kensington store has its own “cheese-aging”, if one ever needed oneAll this seems logical. But how does WFM bring this across? Let’s have a look …
  • The say the sizzle sells the steak, and while the content is extremely important, we ought to look at the whole shopping experience.WFM celebrates food like it is a theatrical production. Emotionalising a shopping experience by appealing to the five senses. Stores are spotless, merchandising displays are beautiful to the eyes. Shoppers are encouraged to taste and to touch everything in the store. Fresh smells of coffee, bread, cheeses, fruits.They do this in 7 ways …
  • WFM celebrates food like it is a theatrical production. Emotionalising a shopping experience by appealing to the five senses. Stores are spotless, merchandising displays are beautiful to the eyes. Shoppers are encouraged to taste and to touch everything in the store. Fresh smells of coffee, bread, cheeses, fruits.
  • How does that make me feel about the Whole Food Brand?And what is the result?In the end, what I end up with is that gut feeling that tells me to go to Whole Foods and spend my money.
  • As a next step I looked at the Brand Proposition and what the Whole Foods Market brand aims to bring across. I did so by firstly looking at its core mission and values, and then went into their brand promises (what they tell people they will deliver) and their tactics (what they actually do).
  • The Whole Foods mission is simple. Within this they developed the Declaration of Interdependence … which means that they focus on a variety of values, many of them CSR values, that are interlinked and intertwined. I tried to pull out the main ones to give us a bit of an overview.Whole Foods Market Declaration of Interdependence: http://www.wholefoodsmarket.com/company/declaration.phpCommitted to buying from local producers whose fruits and vegetables meet high quality standards, particularly those who farm organically and are themselves dedicated to environmentally friendly and sustainable agriculture. Ensuring crop/bio-diversity. Quality standards focused on ingredients, freshness, taste, nutritive value, safety and/or appearance. Reinvesting profits and donating funds, promoting small local farms that are a valuable components of a communities’ character, helping maintain agricultural heritage, preserve land use diversity, and moderate developmentCommunity care and engagement, education programmes,staff development, healthcare“Our ability to instill a clear sense of interdependence among our various stakeholders (the people who are interested and benefit from the success of our company) is contingent upon our efforts to communicate more often, more openly, and more compassionately. Better communication equals better understanding and more trust.”
  • Committed to buying from local producers whose fruits and vegetables meet high quality standards, particularly those who farm organically and are themselves dedicated to environmentally friendly and sustainable agriculture. Also health angle because local food is healthier and more sustainable/less travel involved. And “Crop diversity and quality: Many farmers producing for a local market choose to diversify, growing a variety of crops instead of just one. This is a boon for biodiversity and your palate, since local crops are harvested at their peak of freshness and flavor.”Local Producer Loan Program:  to make it easier for producers to grow their businesses and bring more local products to market:http://www.wholefoodsmarket.com/values/local-producer-loan-program.php and http://blog.wholefoodsmarket.com/2010/05/uniquely-local/
  • Whole Foods Market food standards: http://www.wholefoodsmarket.com/products/quality-standards.php
  • 1) One percent of of proceeds from Whole Trade certified products will go to Whole Planet Foundation to support micro-loan programs. More info at http://www.wholefoodsmarket.com/products/whole-trade.php
  • 1) Investing in environmental and sustainability programs, e.g. supporting sustainable agriculture, reducing waste and consumption of non-renewable resources. 2) Also:The company plans on purchasing 458 gigawatt hours of wind energy credits. This will keep about 700 million pounds (300,000 metric tons) of carbon dioxide emissions out of the atmosphere. This is equivalent to taking 60,000 cars off the road or planting 90,000 acres (360 km2) of trees. (http://www.grist.org/article/so-fresh-so-clean)3) Also: In May 1999 Whole Foods Market signed on as one of the first American companies to support and participate in the Marine Stewardship Council. (http://www.wholefoodsmarket.com/values/stewardship-council.php)4) No. 5 of Fortune’s 100 Best Companies to Work for 2007: http://money.cnn.com/magazines/fortune/bestcompanies/2007/full_list/
  • So who are their customers you might wonder?Let me paint you a picture…
  • The first thing I did was look at the customers who shop at Whole Foods and engage with it on the shop floor, and secondly I did a quick online map of those who interact with/mention the brand and its products, because these are clearly people who have purchased products, Of course, these are individuals who already know about Whole Foods and use the shops. They are local customers.
  • For pure geographical reasons customers are different in the UK than they are in the US, however generally the type of customer who shops at Whole Foods is the following:I also looked at some statistics describing whole foods customers. Consumption awareness: 2/3 of consumers with children aged 10 to 14 put production values and ethical properties down as key motivators for buying new product. In addition, values being taught in schools leads to children putting pressures on parents and shopping habits2) 1/3 of consumers find it important to know all the ingredients in an item before purchasing3) A recent European survey on motives for purchasing organic foods found that ‘it is healthier for them’ (48%) and ‘better for the environment’ (16%) were the two most important reasons for select- ing such foods (Walley et al. 2009). Food consumption trends and drivers, John Kearney: http://www.bis.gov.uk/assets/bispartners/foresight/docs/food-and-farming/drivers/dr3-food-consumption-trends.pdf4) National Association for the Specialty Food Trade, Inc. “Today’s Specialty Food Consumer 2009,” showed that organic foods appeal most to those ages 35 to 44. http://www.ota.com/organic/mt/consumer.html4) According to the 2009 U.S. Families' Organic Attitudes and Belief Study, nearly three-quarters (73 percent) of U.S. families buy organic products at least occasionally, chiefly for health reasons. National Association for the Specialty Food Trade, Inc. “Today’s Specialty Food Consumer 2009,” showed that organic foods appeal most to those ages 35 to 44. http://www.ota.com/organic/mt/consumer.html
  • 1) Hartman-Group: http://www.hartman-group.com/publications/reports/beyond-organic-and-natural2) Choices Magazine: http://www.choicesmagazine.org/2007-2/grabbag/2007-2-05.htm3) Food consumption trends and drivers, John Kearney: http://www.bis.gov.uk/assets/bispartners/foresight/docs/food-and-farming/drivers/dr3-food-consumption-trends.pdfLocal customersFurther research to be done into segment growth, behaviour, price and service requirements.
  • I also wanted to have a very quick look at the markets, because market developments can be incredibly pertinent when positioning our brand or adapting it.
  • 1) Nick Moon, Managing Director of GfK NOP Social Research, comments: "Given the current crisis over the Eurozone, and the pessimism in the media about the likelihood of the British economy sliding back into recession next year, the one point increase in the index this month is a minor variation and doesn’t indicate a significant change. While it does reverse the decline of last month, what matters is the long term trend, and at the moment that still looks very gloomy. GfK – Growth for Knowledge: http://www.gfknop.com/pressinfo/releases/singlearticles/009072/index.en.html2) The Guardian: http://www.guardian.co.uk/environment/2011/apr/04/organic-food-sales-fall
  • Organic industry will have a hard couple of years, but consumers do not want to compromise their health and will continue to buy organic. Gavin Rothwell, Senior Business Analyst at IGD – Whole Foods Market Puts UK into Organic Overdrive – Natural Choices: http://www.soilassociation.org/marketreportNational Association for the Specialty Food Trade, Inc. ,’Today’s Specialty Food Consumer 2009’: http://www.ota.com/organic/mt/consumer.html
  • Having looked at the market, it was also essential to look at who we share the market with … I took a close look at the UK specifically, where Whole Foods hopes to expand in the future.
  • Large retailers and other businesses already dominate organic and fair-trade sales.1The Guardian: http://www.guardian.co.uk/business/2007/jun/07/retail.supermarkets
  • Large retailers already dominate organic and fair-trade sales“Premium supermarkets, such as Marks & Spencer and Waitrose, have been stocking pots of pre-chopped tropical fruit and organic wines for some time. But while British customers already spend more than £1bn a year on organic products, the British idea of organic food tends to be small fruit and muddy veg bought in small stores, not gleaming piles of pomegranates (99 pence each) from supersized malls.” The Guardian: http://www.guardian.co.uk/business/2007/jun/07/retail.supermarketsNational Association for the Specialty Food Trade, Inc. “Today’s Specialty Food Consumer 2009,” showed that organic foods appeal most to those ages 35 to 44. http://www.ota.com/organic/mt/consumer.html
  • So back to my practical reasoning …. I also had a look at some of Whole Foods pricing compared to other retailers, as price can often dominate consumer choice.US nickname “Whole Paycheque“
  • So what is this brand’s future potential?
  • To find out I pulled together a quick SWOT analysis to help identify some key issues and opportunities. Note:Economic downturn: food is expensive and shoppers don’t see the cost-effectiveness of paying premium for basic foodsConsumer association backlash about specific products, e.g. personal care products for which “organic’ guidelines do not applyCriticism from animal right supporters for selling live lobbsters and meat countersOngoing debate about benefits of organic foods
  • Introducing some practical developments and possible brand actionEnergize brand image:Limit inconsistencies, e.g. imagery, look and feel of different company areasStrengthen corporate imageDevelop brand awareness with key audience and potential customers
  • Develop consumer education and marketing to clear up misconceptions while driving product salesEducation campaign, e.g. coalition with famous chefs or other celebrity endorsers and third party’s/ competitors such as farmers markets etc.External events, e.g. further develop in-store events such as cooking classes, family days, lady’s evenings, and moreTHE COUNTRYSIDE FOUNDATION FOR EDUCATION IS SOON TO BECOME COUNTRYSIDE LEARNINGThe mission of the Countryside Foundation for Education is a simple one. It is to educate, inform and inspire children, parents and teachers, so that they can enjoy and appreciate the countryside while having a greater understanding of the wide range of issues surrounding it. Read more.....
  • Seasonal sales and frequent customer rewards scheme, Sales promotion to reach wider audience and increase direct salesPush well-being and beauty angle, e.g. push well-being and beauty lines, collaborate with spas and health/fitness centresEvents:Increase direct shopper marketing/audience engagement, e.g. sales effortsLoyalty card, where WFM donates to environmental charity every time you purchase a green product, etc. to give back to consumers who shop regularly and develop new customersResult:Able to clear misconceptions and educate on: food pricing, importance of healthy, organic and free-trade foodsGive back to consumers who shop regularly and develop new customers
  • - Good brand extensions grow the value of a brand by reinforcing its focus
  • Where do you think it can go in the future? What could it do better and what interesting moves could it make going forward?What does this mean for the Whole Foods Brand?Keeping to same brand vision but increasing tangible customer value; develop brand promise, delivery model by using experience mapping Need for further segmentation beyond organic vs. non-organic = health organic market and social organic market

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