Q&A WITH THE FOUNDER OF WHOLE FOODS.
Whole Foods CEO on the changing world of groceries
It’s already been a tumultuous year for Whole Foods. News of store closures across the country, coupled with rumors that Albertsons is hovering in a bid to buy the 440-store natural-food chain, have created widespread predictions for a shaky future for the company. But during a visit to San Francisco last week, Whole Foods co-founder and CEO John Mackey seemed as calm as a yoga instructor as he addressed the company’s struggles.
Based in Austin, Texas, Mackey was in town to promote his new book, “The Whole Foods Diet” (Grand Central, $28). Sounding at times like a diet guru, the tall and wiry Mackey, 63, spelled out the plant-based eating plan in the book — and much more on his thoughts surrounding organic foods, the future of grocery stores and those rumors of Whole Foods’ demise. (Interview edited for length and clarity.)
Q: What’s a typical eating day for you?
A: I travel with a rice cooker. It simplifies breakfast. I just soak steel cut-oats overnight, and the next morning I click the clicker and the oats get cooked perfectly. I throw a few berries on there and some unsweetened almond milk. I have a very healthy breakfast and it costs pennies.
At lunch, probably two out of three days I’ll have salad — the best salad bar in the country is down in our Austin store. But I mix it up so it’s different every day with beans, whole grains, different kinds of greens. The dressing will have nuts and seeds. I won’t use oil.
At dinner, I almost always have a plate of steamed vegetables with some kind of nut sauce I make in a Vitamix. I might add beans, or a sweet potato, maybe brown rice or quinoa.
On weekends I do more elaborate stuff. Personally I’m into Indian food — you can make incredibly delicious Indian food with no oil. I read cookbooks, particularly vegan cookbooks, like “Vegan Richa’s Indian Kitchen.”
Q: So what is your beef with oil, even olive oil?
A: Everybody gets why you don’t want to do sugar. Sugar comes from plants and it’s a pure carbohydrate. All the fiber’s gone. What is oil? It’s just the pure fat of the plant. There’s no fiber, no nutrients. It’s also the most caloriedense food you can eat.
We’re not anti-fat in this book. We believe you should eat nuts and seeds and avocados. We’re all for the natural fats that are packaged with all the fiber and micronutrients that you find in a whole food, just not separated out.
If I eat at the True Food Kitchen — a chain that Andrew Weil’s behind — their food’s good and they’re going after the health food market, but it’s swimming in oil. I always have to call ahead and explain that I don’t want oil in a particular dish.
Q: Organic food is everywhere now. How has the industry changed since you started in 1980?
A: When we got started there was no local agriculture in Austin. It had all been wiped out. The industrialization of agriculture resulted in refrigerated trucking, and places like California became the vegetable producer for the whole United States. In the early days, I was making trips out to California looking for organic farmers and growers and having everything trucked back to Texas.
Q: Why is a lot of organic farming moving to Mexico?
A: A high consumption of organic occurs primarily in Europe and North America, but the amount of organic that is grown in those countries is inadequate for the demand. And this is a good thing for these developing economies. You’re seeing a lot of it now not just in Mexico but in Central and South America. You’re seeing organic farming begin to catch on in places in Africa, particularly for Europe.
Q: What is going on with Whole Foods’ declining store sales for the past six quarters, which many attribute to big-box retailers like Walmart getting into organic?
A: I actually give Walmart a lot of credit but for a different reason than you’re thinking. Walmart had such a powerful impact when they decided to get into the grocery business. The smaller independents
couldn’t compete with them in price so they started failing, and the bigger chains began to cut all their costs, customer service and prices so they could compete and survive.
That created an opportunity for Whole Foods. We had a differentiated product mix. We created stores that were beautiful and people enjoyed coming in and shopping there. In the late ’90s we started seeing incredible same-store sales growth. We started getting mainstream customers who weren’t necessarily interested in organic or natural, but just shopped at our stores because people were nice to them.
Then the mainstream grocers started copying us and we lost more of the mainstream customers to them. Our core customers — who really buy our mission and are trying to live a natural, organic lifestyle — still are our bread and butter. We still have them but we’re not getting as many of those mainstream customers.
Q: What will that mean for the company?
A: We’re going to have to continue to evolve. First of all we started our new format,
the 365 store (Ed. note: the first Bay Area location will be in
Oakland.) This allows us to compete on price while maintaining our quality standards. The stores are smaller, about the size of most of our San Francisco stores. They’re a lot less capital invested. They are designed for almost all selfservice — no meat or seafood counters — so our labor costs are radically lower. It allows us to price far more aggressively.
Q: Now customers can get food delivered from almost any retailer. How will grocery e-commerce play out? A: It’s cool isn’t it? Here’s what I think is going to happen: You’re going to be able to get any food that you want in any stage. The ecosystem of food is going to get more and more complex. Whatever you want, businesses are going to come up with something to satisfy it. It’s going to be amazing. It’s going to be a consumer food utopia.
Q: What about news that you’re closing nine stores, and the rumors of a potential Albertsons takeover?
A: What you read in the papers and online is that Whole Foods is dying and about to go out of business. People make a big deal that we’re closing a few stores, forgetting that we’re opening 25. Here’s the thing that nobody ever says: Our sales per square foot are 50 to 100 percent higher than anybody else out there that we know of. You have a lot of disruption in retail food combined with the deflation of food prices. So everybody’s feeling it.