from The Way We Eat: why our food choices matter on Whole Foods Market

from The Way We Eat: Why our food choices matter by Peter Singer and Jim Mason p177-183


A Supermarket: Whole Foods Market

John Mackey opened a store selling natural foods in Austin in 1978, when he was 25. He founded Whole Foods Market two years later, and in just five years the company had 600 employees. At that point, Mackey took some of them on a series of weekend retreats where they worked together on a "Declaration of Interdependence" that made all the employees stakeholders in the company and established the company's guiding principles—sell quality food, please customers, satisfy employees, create wealth, respect the environment, and conduct a responsible business.

Whole Foods ranks at 479 on Fortune magazine's list of America's 500 biggest businesses and has around 38,000 employees, 180 stores in the U.S., Canada, and Britain, and an annual turnover approaching $5 billion. Mackey is currently the company's Chief Executive Officer and Chairman of the Board. On one of his frequent visits to New York— where he had just opened Manhattan's largest supermarket—we met him at Gobo, a vegan restaurant in the West Village. He's a friendly, fit-looking man of around 50, who doesn't dress like the CEO of a major corporation. Over dinner, we start with the things we have in com­mon—philosophy, which Mackey studied at the University of Texas and still likes to talk about, and vegetarianism. Mackey told us he had been a vegetarian ever since he moved into a vegetarian co-op in Austin in his early 20s. He wasn't vegetarian at the time, and one of his motivations for moving in was to meet women he thought would be interesting. He did—and in doing so he drifted away from eating meat, but largely because he thought this was a trendy and healthy thing to do, rather than out of a strong ethical conviction. He continued being vegetarian for many years, primarily for health reasons and partly because of com­passion for animals, but without a great deal of commitment.

Then in April 2003, Whole Food Market's annual meeting was pick­eted by Viva! USA, an animal rights organization that was calling for a boycott of Whole Foods. When Lauren Ornelas, Vival's director, got the microphone during question time, she blasted Whole Foods for the ducks it was buying from Grimaud Farm, in California. Although the farm had a reputation for producing high-quality ducks, fed on a diet free of ani­mal by-products, antibiotics, and hormones, Viva! had discovered that the birds were reared in filthy, crowded sheds, had the tips of their bills cut off, and were denied access to water in which to immerse them­selves—which ducks need to stay healthy. Mackey didn't react well.

"I actually said to Lauren, 'We have the best animal standards in the country—go bother somebody else.'" After the meeting, however, Orne­las came up to Mackey and they had a cordial exchange that led to an email correspondence. The line Lauren took, as Mackey later recalled, was, "Well, gee, Mr. Mackey, you're well-intentioned, but I don't think you're very well informed about the actual conditions of the animals." Mackey asked people at Whole Food Market who had visited Grimaud and was told that conditions there were "good," in comparison to their competitors, and since he was too busy to follow up every issue person­ally, that satisfied him, at least temporarily. After several weeks he sent Ornelas a final email that said, basically, "I'm done. We're not going to agree about this."

But Mackey was far from done. Over the summer of 2003, as he later told an interviewer, "I read a dozen books about how animals are raised in this country, going all the way back to Peter Singer's Animal Liberation in 1975. The more I read, the more I was interested in it. I said, 'Damn, these people are right. This is terrible.'" At that point, Mackey realized that he "couldn't continue to eat animal products—I just wanted to be a vegan." During his years as a vegetarian, Mackey said, "When it came to dairy products and eggs and that kind of thing, I just looked the other way . . . It's tempting to think: 'I'm doing enough . . .'" Now, after becoming a vegan, Mackey feels that "it's been a really good decision for me personally," and his values and his actions are aligned "one hundred percent."

Whole Foods, of course, is not vegan. Some might question how well that aligns with the CEO's values, but Mackey has a ready answer. "Whole Foods exists to meet the needs and desires of its customers, and not to pursue the personal philosophies of the founder/CEO, whatever those personal philosophies might be." If Whole Foods ignores the desires of its customers, he argues, it will go out of business. To support that claim, he cites research showing that only 10 percent of Whole Foods' customers are vegetarian and just 3 percent are vegan. Instead of committing business suicide by making the entire chain vegan, Mackey decided to educate Whole Foods' suppliers to produce their animal prod­ucts in a more compassionate way, and to persuade its customers to make more compassionate choices.

After becoming a vegan, Mackey decided to visit Grimaud Farm himself. He found that the ducks had no access to outdoors, their bills were trimmed to prevent them from pecking each other, and, most stun­ning of all, they were not allowed to swim. He sent Ornelas an email telling her she was right—not just about ducks, but about chickens, pigs, and cows. He told her that Whole Foods would immediately begin using its influence and buying power to ensure that the meat it sells comes from animals who have been treated with a measure of dignity before being slaughtered. And he invited her to take part in the process. "I was at the office when that email came in," Ornelas says, "And I just about fell on the floor."

Ornelas wasn't the only one invited to help. Mackey contacted the Humane Society of the United States, People for the Ethical Treatment of Animals, the Animal Welfare Institute, and Animal Rights Interna­tional, asking them to join him and other senior members of the Whole Foods team in meeting with his animal product suppliers and some lead­ing animal scientists. From that meeting a working group began develop­ing standards that will provide better lives for a wide range of animals. New standards for ducks, cattle, pigs, and sheep were posted on Whole Foods' Web site in November 2005, with others to follow. The next step is to certify that suppliers meet the new standards and designate their products with an "Animal Compassion" logo. That process should be complete by 2008. Then Whole Foods will inform its customers about the difference between the "Animal Compassion" standards and conven­tional ones. In that way, millions of Whole Foods customers will learn about the factory farms from which most animal products come—and about the alternatives to them. Already, Whole Foods does not stock fois gras, and since June 2004, it has not sold eggs from hens kept in cages. In 2005, it also eliminated such eggs from its kitchens and bakeries and from those it commissions to make baked or prepared foods.

Mackey takes part in the meetings that are drawing up the Animal Compassion standards, along with a dozen or more Whole Foods staff, including both of the corporation's co-presidents. The first species for which standards were drawn up was ducks, partly because that was the issue that Ornelas brought to Whole Foods, and partly because it seemed a good idea to start with a relatively small industry. Grimaud Farm had its people at the first meeting. After some discussion, they agreed that it would be possible to allow the ducks to go outside and even to provide a shallow pond for them to swim in—something that is unheard of in commercial duck production in America. To meet Whole Foods' standards, the ducks will also have to be able to search for food, so there must be some form of pasture or ground cover, not just bare dirt. There must be space for them to express natural behav­iors including standing, spreading and flapping their wings, turning around, and preening themselves, all without touching another bird. Unlike many birds who end up as "poultry," the "animal compassion­ate" ducks cannot have their bills trimmed, their toes cut, or be mutilated in any other way. Breeding ducks must be able to establish nests that are comfortable and safe.

Mackey thinks it essential to create a viable alternative to factory farms. "Right now," he says, "Americans have to pretend factory farms don't exist. They turn their eyes away, because there's no alternative, there's no choice." In twenty years, he predicts, factory farming will be illegal in the United States. To make that day come faster, Whole Foods has set up an Animal Compassion Foundation, an independent, non­profit organization the mission of which is "to provide education and research services to assist and inspire ranchers and meat producers around the world to achieve a higher standard of animal welfare excel­lence while still maintaining economic viability." The foundation will provide a global exchange network for information on humane farming techniques.

In addition to the positive impact it is having on animal welfare, Whole Food Markets' huge sales of organic bananas led Dole to convert significant amounts of its Central American farmland to organic produc­tion, while the demand for organic eggs and dairy products helped the Organic Valley cooperative take on new organic farmers. At Whole Foods, all fruits and vegetables are clearly labeled "organic" or "conven­tional"—or occasionally, "transitional" to indicate a farmer who is using organic methods but has not yet achieved certification. Stores have some autonomy about what they buy and are encouraged to buy local food when it is available. Signs often give detailed information about where a product comes from and how it was produced—including, perhaps, details about how a chicken was raised and an invitation to visit the farm. Whole Food Markets also has a goal of making all its "own brand" products free of genetically modified organisms. To promote consumer choice, it labels its own products as free of GMOs when that can be verified and encourages other manufacturers to do the same. The chain was an early supporter of the Marine Stewardship Council's "Fish For­ever" label, showing that fish came from a fishery that was operated in a sustainable manner. In 1999, Whole Foods discontinued the sale of Chil­ean sea bass (also known as Patagonian Toothfish) because the stocks were being overfished.

As that example shows, there are some choices that Whole Foods doesn't leave to its customers. The company takes its name seriously, and interprets it to mean foods that are not adulterated with synthetics. Nothing sold at Whole Foods has artificial sweeteners, colors, or preser­vatives. If you want to buy a can of Coke, you are free to shop elsewhere. You can't buy your way onto Whole Foods shelves either, even if your product doesn't contain any forbidden ingredients. Unlike most big gro­cery chains, which take billions of dollars annually in "slotting fees" and "vendor allowances" from big food corporations wanting to get their products prominently placed, Whole Foods does not accept such pay­ments.

Behind everything Mackey does at Whole Foods lies a larger phi­losophy about capitalism. In Mackey's view, a responsible business ben­efits not only its shareholders, but all its stakeholders, a term that includes customers, employees, suppliers, the local community, and the environment. (Animals, he told us, are stakeholders too, within the envi­ronmental category.) The community benefits not just from access to good food and more jobs, but because Whole Foods donates a minimum of 5 percent of its profits to non-profit organizations and gives employees time off with full pay—up to twenty hours a year—to do voluntary com­munity service. The environment benefits through Whole Foods promo­tion of organic foods and also from in-house practices like putting solar panels on the roofs of its stores to power its lighting and reduce green­house gas emissions.

There is some debate about how well Whole Foods looks after its employees, because Mackey's libertarian outlook makes him philosophi­cally opposed to unions. Instead of negotiating wages and benefits with unions, he gives his employees—or "team members" as they are called— opportunities to acquire shares in the company. All team members are eligible for stock options after three years' employment. In sharp contrast to the usual corporate model, 94 percent of the company's stock options go to non-executives. Mackey has a policy of "no secrets management" that enables any employee to see what any other employee is getting paid. No employee may be paid more than 14 times what the average employee gets, which is about $29,000, a good wage for the grocery industry. That policy limits Mackey's own salary to a little over $400,000 a year. Com­pare that with Wal-Mart CEO Lee Scott, whose 2003 salary and bonus, including stock grants, came to $17.4 million, or 966 times the salary of a full-time "associate," as Wal-Mart's store assistants are called.3 At Whole Foods, teams of employees—for example, the seafood team, the prepared foods team, the customer service team—vote on whether to accept a new employee, after a trial period. They have an incentive to accept only good workers, because when teams perform well, everyone on the team gets a bonus. Mackey calls it "an organization based on love instead of fear," which sounds too good to be real, but whatever the system is based on, it seems to work: for eight consecutive years, Whole Foods has been listed by Fortune magazine among the best 100 companies to work for. In 2005, it ranked number 30.

The main objection to Whole Foods is the same point that Wayne Bradley made about Niman Ranch pork—it's too expensive. Almost every article about Whole Foods mentions its nickname: "Whole Pay­check." The New York Times headlined its story on Mackey "The $6 heirloom tomato." Mackey's response to criticism of his pricing is that Americans spend far less of their income on food than people in other countries do and "that's why most of it tastes so bad." He might also have mentioned that we spend a smaller proportion of our income on food now than we used to do—on average, only 6 percent of our total income goes towards buying groceries, down from 17 percent fifty years ago. In fact, we probably work for fewer hours to feed ourselves than people have anywhere, in all the millennia of human existence. In Mack­ey's view, if Americans want to eat better quality food, most of them have the means to pay for it.

In the organic movement, some say that by getting big, Mackey has "sold out" to the corporate world. He responds by asking why it is sup­posed to be bad to put an ethically responsible way of doing business into the mainstream. Whole Foods has shown that squeezing every last cent out of the production and distribution process isn't the only way to make good profits. Running an ethical business can do it too.