Have you heard about Whole Foods Market’s most recent debacle? Before getting into the nuances of what comedian Fred Armisen calls “an elaborate practical joke that got really out of hand”, I want to be open about the fact that I bought stock in Whole Foods Market in 2001—a company that I wholeheartedly believed in. And one whose growth I have happily watched over the years, give or take the occasional disappointment.
About two weeks ago, however, I received this email from a reporter:
Not sure if you saw this bogus story about Whole Foods adding three asparagus stalks to water and charging $6 for it but I'm trying to put together a short piece on infused waters. I was hoping you could comment on their nutritional quality. Do nutrients actually transfer from the fruit/vegetable and into the water? How long would they have to sit in there for that to happen? Is this a decent way to get some extra nutrients?
This was my trite response (as I was in back-to-back meetings all day and she needed something pronto):
I honestly don't know the research on nutrients transferring to the water (unless it's squeezed in like a lemon). I'm not sure it even exists. I say eat the asparagus and don't buy into the hype for oodles of nutrition.
Last Monday the TODAY Show aired a short segment about the asparagus water and then Last Week Tonight with John Oliver (the English Jon Stewart) addressed millions with a piece on how Whole Foods Market “found itself in an all-natural, hand-picked locally-grown pickle” (I urge you to watch if you haven’t already).
This is the latest in a long string of really bad decisions that Whole Foods Market has made—and clearly continues to make. Last June, they were found guilty for overcharging customers throughout California. According to the LA Times, “[They failed] to deduct the weight of containers when ringing up fresh food, putting smaller amounts into packages than the weight stated on the label, and selling items by the piece instead of by the pound, as required by law.” As a result, they had to pay $800,000 in penalties.
They obviously didn’t learn, as they repeated the pattern most recently in New York City. This time, however, damage control was met with a (super slick) apology video from Whole Foods Market co-CEOs, John Mackey and Walter Robb.
Now, I appreciate that Whole Foods Market has done quite a bit of good for the movement towards healthier consumer choice, which is one of the reasons why I supported them as an investor. And although people like to bust on the chain for its high prices, their in-house 365 Brand is affordable even to those in a lower income bracket ($0.89 for a chemical-free can of beans is comparable in cost to its mainstream counterpart). Pretty impressive is the fact that currently they have more than 420 stores throughout 42 U.S. states, Canada and the UK. Meaning that they are literally the largest “natural foods” grocers in world. However, with this level of success also comes great responsibility (and expected transparency), and this is where Whole Foods Market is successfully failing.
In June of this year, PETA (People for the Ethical Treatment of Animals) filed a false advertising complaint over Whole Foods “humane meat”. If you shop the market, you know that all meats are rated through the Global Animal Partnership (GAP), a Whole Foods Market-founded organization. GAP’s 5-Step Animal Welfare Rating program makes consumers believe that no matter the Step (1 through 5 or 5 plus), your animals were treated humanely. Yet the reality is that, when it comes to animal welfare, Step 1 and 2 are really no better than Perdue or Tyson. I am with PETA on this: GAP’s 5-Step Animal Welfare Rating program is nothing but false marketing!
As an investor, consumer and culinary nutritionist, I know Whole Foods Market can (and must) do a whole lot better. And it is their responsibility to the world to do so. Hopefully, the recent Federal lawsuit filed by shareholders who bought stock between August 2013 and July of this year will prompt them to take their misconduct more seriously.
But to you as consumers, here are the top three things you need to know about Whole Foods Market (other than what I just shared):
- Understand that just because you’re buying a product at Whole Foods Market doesn’t mean it’s automatically healthy or truly transparent (don’t buy into the greenwashing)
- You will find nutrition and health gimmicks at Whole Foods Market just as you will find them anywhere; so be a smart shopper
- While Whole Foods Market may overcharge for some things, they offer very fair pricing for others. Navigate your choice with your wallet in mind!
I am not quite ready to boycott the natural foods giant, but holding their feet to the fire is a must. They not only have a great responsibility to their customers and producers, but they also have significant social responsibility that they are evidently failing to honor. If Whole Foods Market doesn’t smarten up soon, they not only risk losing the truth that they love to boast about, but they could undermine consumer trust in the sustainable food sector as a whole.