Last June, Amazon.com Inc. purchased Whole Foods Market Inc. for $13.7 billion. This was one of the most widely talked about mergers of 2017 because of the possible impacts it could have on the grocery industry. Since then, Whole Foods has undergone several changes in branding and culture.
Since the takeover, Green America members have asked us if they should continue to shop at Whole Foods. We took a look at what’s changed at Whole Foods in order to answer the question.
How has Amazon changed Whole Foods so far?
Some changes are subtle, such as "Amazon + Whole Foods" signs by the bananas, while others are more obvious, such as Amazon Echos available in-store. More than 100 Whole Foods started selling other Amazon products, including Fire TV, Kindle e-readers, and Fire Tablets in late 2017. Additionally, Amazon Prime members now receive special discounts; Amazon Prime Rewards Visa cardholders who are also Prime subscribers will receive 5% cash-back on Whole Foods brand purchases.
In an article Green America’s Green Business Network published last year, we highlighted how Amazon may use the organic grocer to conquer the “last mile” delivery dilemma and bring distribution centers closer to its customers. Amazon has followed through with this prediction and added Amazon lockers to some Whole Foods locations, allowing deliveries to be held in a secure location until customers can pick them up.
For current Whole Foods employees, the newly imported automation raises concerns. Amazon is increasingly using robots in their warehouses and has experimented with an all-automated store, Amazon Go. The online retailer also has a poor track record with its employees, who often work long hours with minimal breaks. Whole Foods is viewed as treating its employees well despite opposition to unions in its stores. However, the future for current and new Whole Foods employees under Amazon is still uncertain.
How are competing stores affected?
Immediately after the announcement that Amazon was purchasing Whole Foods, other players in the grocery industry took notice, and investors took notice as well as competitors’ stock prices declined by $12 billion after Amazon announced a first round of price cuts at Whole Foods markets. Although Whole Foods isn’t the largest grocery chain in the U.S – with less than 500 locations – the concern is that an Amazon-owned grocery store chain will cause a major disruption of the grocery market.
Amazon is known for aggressively cutting prices, which can be good for consumers in the short term, but can also place price pressures on suppliers, which, in turn, can lead to worsening environmental and labor conditions. It wouldn’t be the first time Amazon has shaken up an industry. And that shake up could have real downsides for people and the planet.
Although Amazon did not disclose how much prices would be cut, customers are seeing reduced prices throughout the stores and can expect to see further cuts in the future. For other grocers, this means competition on the organic front from the most-well known brand of high-quality organic foods. Amazon is also offering free two-hour delivery for Prime members at certain Whole Foods locations – an option many other competitors, chains and local stores, don’t offer.
How do these changes affect local food producers?
One thing that made Whole Foods unique compared to other grocery chains was their inclusion of local products and produce. Now under Amazon, Whole Foods is “placing limits on how products are sold in its stores and asking suppliers to help pay for the changes, riling some mom-and-pop vendors that have long depended on the grocer for visibility and shelf space,” according to The Washington Post.
In the past, Whole Foods allowed local producers to set up a table and offer samples to onlookers – for many small producers, these interactions make up a large portion of their sales. Having customers see the person who made what they eat fosters a farmer’s market-like connection in a chain store. But with Amazon’s two-hour delivery service, local producers expect fewer people walking in stores and “fewer opportunities for producers to interact with and educate shoppers.” In addition, Whole Foods is requiring local suppliers that sell more than $300,000 worth of product to help fund local tastings through discounts on the products they sell, and has reduced shelf space at a number of stores for local producers, which is lowering sales. Many local producers have experienced less exposure and sales due to the changes.
Vote With Your Dollars
So what can you do as a Green American if you want to support local farmers and producers, as well as workers? If you are concerned about the changes at Whole Foods, you can vote with your dollars, and support the following:
- Shop at local stores and co-ops. Across the country, there are still many small health food and organic markets, as well as co-ops. Here in the D.C. area there are several great options that belong to our Green Business Network. MOM's Organic Market is a local chain that sells organic produce at competitive prices and treats its employees well, with competitive salaries and great benefits. We also have several great co-ops, including Glut and Takoma Park - Silver Spring Co-op, which exist to serve their communities.
- Shop at farmers markets. Farmers markets have sprung up all over the country. They are a great way to support local farmers and meet the people who grow your food. You can also ask them directly about topics like pest management at their farm and if they engage in organic, permaculture, or regenerative farming practices. You can find local options in the USDA database.
- Sign up for Community Supported Agriculture (CSA). Through the growing season, CSAs make weekly deliveries of farm-fresh veggies, eggs, and/or meat and dairy products, usually to a central location near you. Because you are contracting directly with a farm, you can save costs and more money goes directly into the farmer’s pocket. You can find options near you from the USDA.
- Grow your own. If you want to serve your family the freshest produce, and guarantee that it is grown organically, consider growing your own fruits and vegetables. Green America is encouraging everyone who has a yard or access to a community garden to create a Climate Victory Garden, where you use regenerative agriculture practices to create healthy soils and sequester carbon. You can feed your family and lower the impacts of climate change all at once.
If the above don’t fully address your food needs, you should keep in mind that Whole Foods is still a better option than Walmart, or many national grocers. Whole Foods is providing transparency around GMOs in its stores this year, and has many healthy food and body care options that many other national chains simply don’t stock. If you continue to shop at Whole Foods, make sure to use their comment cards to let them know that you would like them to support local suppliers and farmers, and to treat their employees well, and that your continued patronage depends on Whole Foods treating workers and communities well.
Written by: Mary Meade and Todd Larsen