Keynote speaker for Thursday conference to focus on future of natural products
Walter Robb, co-chief executive officer of Whole Foods Market (Nasdaq: WFM), has been with the Austin, Texas-based natural-foods grocery chain for more than two decades, starting in Marin County and rising to top management 13 years ago.
He joined the company in 1991, operating the Mill Valley store until he became president of the chain’s Northern Pacific region two years later. During the next seven years in that role, he expanded the chain in the region from two stores to 17. He then became executive vice president of operations in 2000, chief operating officer in 2001 and co-president in 2004.
He now oversees six regions of a company that has grown through 20 acquisitions to have more than 340 stores in the U.S., Canada and the U.K. Whole Foods is the nation’s eighth-largest food and drug store chain. Sales were $12.9 billion last fiscal year, ended Sept. 29, up 13 percent from 52 weeks before. Part of company operations is reaching out to local food suppliers and providing loans to startup producers.
Mr. Robb sits on the Whole Planet Foundation board of directors, Organic Center for Education and Promotion advisory board and University of the Pacific board of regents.
Mr. Robb is set to be the keynote speaker at the North Coast Food & Agriculture Industry Conference, presented by the Business Journal and Bank of America/Merrill Lynch on Thursday in Santa Rosa.
How sustainable is grocery sales growth for organic and natural foods?
Mr. Robb: Recent Nielsen data shows that growth in organic has been 10 [percent] to 12 percent. Sales of traditional foods is 2 [percent] to 3 percent. There is pretty robust growth in natural and organic foods right now.
Beside product quality, what are most important elements for small producers to connect with your shoppers?
Mr. Robb: The quality standards we have published on our website [wholefoodsmarket.com/about-our-products/quality-standards] are No. 1 to us, and we don’t compromise on them. We stay as close to “whole foods” as possible.
Also, we stay close to the story or history of a product, about the producer. We have a loan program for producers and look for attributes around non-GMO and organic processes.
We ask, how does it taste? It has to taste good.
What are trends in consumer demand?
Mr. Robb: There was the announcement on trans-fats, where the FDA said it was going to finally eliminate them from the food supply. That action will show that cheap food is not the best food and not necessarily good food. We’ve seen the consequences of that in the health of Americans.
We’ve seen that the next big thing is fresh, healthful food — particularly, local food. I’ve never seen such interest in how food is produced and who is growing that.
It’s a whole renaissance. We’ve seen that with brewing craft beer and chocolate- and sausage-making,. Those went away after World War II, and now it’s back.
In Sonoma County there is a rich tradition of local producers. We’ve seen it in Ig Vella, whose father when he came from Italy started a craft cheese company making Sonoma Jack and other products modeled after what we have at home. Consumers are interested in stores that help with learning about food and the health of their families.
It’s also a time in the economy when people are interested in value. Not everyone is doing well, so having something healthful available to them and what they get for their money is important. That’s true for many of our customers but not all our customers.
Generally, they are interested in more transparency in how food is produced and what’s in it. They do not want any surprises. They want producers to have integrity in the products they are producing.
How is the company responding to that demand and leading new trends?
Mr. Robb: First, because of our role in the marketplace, when we set a rule or standard, it is helpful for a producer to play by role if they want to sell in our stores. Versus evolve into mass marketplace.
Second, we have our local loan program for the past eight years. We have lent $10 million and have authorization to lend another $25 million.
Third, we have our producer equity loan program to be able to loan more and become part-owner in a company, if the producer wants to go that way.
Fourth, we’ve become conscious in our contract process. For farmers, we pay a fair price and in the way the contract is set up be fair both ways, so we are not squeezing our suppliers. We have over 100,000 suppliers in the company. That’s a lot of suppliers.
Some producers can’t sell to all stores or even in all of California, because they don’t make that much. We have evolved our system so it is not a one-size-fits-all model. Local buyer-fairs for producers are part of that.
How is Whole Foods’ move to lower prices being received by suppliers and consumers?
Mr. Robb: It’s been a multi-year effort. We still stand for quality in the marketplace. At same time, we need to be really relevant on price. We’ve had three of the best years as a company, so that has to say something.
Coming out of the recession, we found customers were not finding us as relevant, so we had to go back and find if we were relevant in products and pricing.
What role can and do natural-foods producers and retailers have in reaching communities with lower incomes and fewer options for such foods?
Mr. Robb: We have a responsibility to participate to bring our products and skill sets to all communities. I don’t know what a civil society has if it does not include more options for more people. Many communities do not have these at all.
For us we’ve started to take step in that direction. We opened doors in of a store in Detroit on June 5, and in Feb. 4 in 2014 we will open a store in New Orleans.
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