Whole Foods Value Statement Analysis

Whole Foods’ core values statement proclaims the company is “part of a growing consciousness that’s bigger than food—one that champions what’s good, and the greater good, too.” Since the company’s founding 36 years ago, it has built its business around providing products that are held to extremely high quality standards in terms of ingredients and ethical sourcing, rather than simply selling SKUs that will bring a high profit. While this seems clearly aligned with its core business and a key to shareholder wealth maximization, Whole Foods also embodies a sense of higher purpose, which they express on the company blog as “reflect[ing] and reinforc[ing] our belief that companies should operate with a higher purpose beyond profits, and create

value for all involved.” In addition, CEO John Mackey expresses Whole Foods’ purpose-driven pillars of conscious capitalism as 1) serving a higher purpose; 2) stakeholder integration; 3) conscious leadership; and 4) conscious culture and management. Whole Foods works towards its higher purpose and pillars of conscious capitalism through a number of charitable endeavors, environmental initiatives, and keen awareness of the importance of their human capital.

Whole Foods has initiated and sustained several global responsibility campaigns, and donations to charitable organizations have consistently exceeded their corporate annual target of 5% after-tax profits. Each store retains an individual budget earmarked for philanthropic contributions within its community, and a high emphasis is placed on fostering good will, active local charitable participation, and reducing impact on the environment.

In addition, Whole Foods manages three foundations.

All operating costs for the foundations are covered out of corporate profits, so 100% of public contributions to the causes can be dedicated directly to the support of programs and initiatives. The Whole Planet Foundation partners with microfinance institutions to award over $60 million in grants to support development of 116 products in 61 countries from which the company sources products. Microfinance institutions issue microcredit, which was developed by Professor Muhammad Yunus, co-recipient of the 2006 Nobel Peace Prize. It provides low-income individuals access to credit without requiring a contract or collateral. Grant recipients use microcredit to create or expand their home-based business, “enabling them to lift themselves out of poverty.” Whole Planet grants are funded by the sale of Whole Trade Guarantee Program products, as well as contributions from customers, suppliers, and team members. Since the foundation’s inception, over 800,000 borrower families have received loans, with 89% of those families headed by women. Whole Foods estimates that each female head of household loan recipient supports a family of more than five, which means more than 4.2 million individuals have been made more prosperous by the support and contributions of the

foundation.

The Whole Kids Foundation aims to improve child and family nutrition. Since its inception in 2011, the foundation has provided more than 2,100 schools with grants for school gardens, and 3,500 schools have received salad bars. In addition, the foundation offers education on healthy nutrition and cooking to staff and teachers. Donations from team members, customers, and supporting partners donated more than $3.5 million during a fall 2014 fundraising campaign.

Whole Foods’ newest non-profit initiative, the Whole Cities Foundation, is dedicated to improving the health of individuals and communities by bringing nutritious food and wellness education to underserved neighborhoods.

The foundation partners with local community and grassroots organizations to “create innovative solutions to food access and health in their communities.” These solutions include urban farms and cooking classes. Since its 2014 inception, the foundation has developed partnerships in three cities, with future partnerships planned and a commitment to raising $1 million in seed money to programmatic operations over the next three

years.

Whole Foods is dedicated to supporting sustainable environmental practices and being a leader in environmental stewardship. Notable environmental initiatives include purchasing more than 4.3 billion kilowatt hours of wind-based renewable energy, earning seven EPA Green Power Awards, using rooftop solar systems in select stores and distribution centers, building roof top farms, and installing electric vehicle charging stations at more than 45 stores. Whole Foods is committed to reducing energy consumption at all stores by 25% per square foot by 2015, and new stores are built with green practices and LEED certification when possible. Disposable plastic grocery bags were discontinued in all stores as of 2008, and customers are incentivized against using paper bags by being refunded at least a nickel per reusable bag at checkout. All stores in communities that support recycling and composting initiatives offer these methods of waste disposal. Compostable fiber packaging is used for prepared and take-out foods, and the company is working with suppliers to reduce the use of Styrofoam packing materials in shipments and product packaging.

Whole Foods has been one of only 13 companies to rank consecutively for 17 years on Fortune magazine’s “100 Best Companies to Work for in America.” It supports “team member happiness and excellence” as one of its core values, and prides itself on extremely low turnover for the grocery industry (full-time voluntary=11%), good morale, and plentiful advancement and growth opportunities. CEO John Mackey has voluntarily capped his annual salary at just $1, and does not receive cash bonuses or stock option awards for performance.