Is Whole Foods Market Just Another Evil Corporation?

I just finished reading Sharon Smith's article by the same name online at AlterNet.com. I am writing this blog in direct response to the question she posed in the title of her article.

Whole Foods Market is, like any human endeavor, hardly perfect. In my mind, however, they are exemplary corporate activists, striving to not only be a sustainable company in a currently unsustainable sector, but also to define sustainability and uplift their entire industry along with them. Likewise, no journalist is perfect -- but Smith's attack on a fellow advocate for positive change only serves to hurt the larger cause of creating a safe, clean, and just world that we all share.

For the sake of sustaining and improving the life, peace and prosperity of future generations on this great green Earth, I am an advocate for sustainable businesses like Whole Foods. I cannot stand idly by and watch members of the movement naively gnaw off one of the legs on which we stand.

My answer to Ms. Smith is NO. Whole Foods Market is NOT "just another evil corporation." Evil -- as defined by our collective intelligence at Wikipedia.com -- describes "intentional negative moral acts or thoughts that are cruel, unjust, or selfish."

The article begins innocuously enough, by mentioning some of Whole Foods' innovative and progressive corporate strategies. Included in the list are its commitment to advancing the fair trade movement, supporting micro-entrepreneurs in developing countries, improving living conditions for farm animals, empowering its team members, and fostering a work culture of acknowledgement and appreciation. (Not to mention that they are in the business of providing wholesome nourishment to their customers.)

Then Smith attempts to pull back the curtain to reveal "something sinister [that] lurks beneath the surface of Whole Food's progressive image." Later, she writes, "Whole Foods turns ferocious" -- implying that all of this "do-gooding" is sheep's clothing for a voracious wolf eager to gobble up anyone who steps in its path of profit.

The central assumption in Smith's pronouncement of evil -- that unions are unequivocally good -- remains highly controversial. Although historically a powerful force in the empowerment of labor and evolution of corporate culture, it is hardly a matter of fact that unionizing works in every circumstance. Sometimes it protects workers from unfair corporate practices. Other times, it pits them against each other. I would not presume to take a stance on whether WFM workers should or should not unionize. However, the company should not be demonized and accused of intentionally immoral acts due to one journalist's opinions on their labor practices.

No single sociopolitical agenda, be it progressive, conservative, libertarian, anarchist, or Marxist, should be defended at the expense of a larger mission. Smith, along with many well-meaning yet misguided progressive activists, would better serve that larger mission by focusing on revealing the most backward and corrupt organizations, rather than what is likely the most sustainable Fortune 500 company.

Smith writes that "[s]omehow, Mackey has managed to achieve multimillionaire status while his employee's hourly wages have remained in the $8-$13 range for two decades." First of all, I would argue that salaries are a reflection of the value a person creates for the organization. Executives are paid high salaries because they create more value for the organization than those just starting out, who will also likely leave within a few years. All team members are all essential to the success of the business, but the executives are creating the conditions that provide jobs to the fruit stackers in the first place. If their organization does not duly compensate them, they leave to find another company that will, just like anyone else offering trained services (including journalists).

Smith accuses WFM of being profit-hungry. How does Smith suggest Whole Foods decrease its profits and simultaneously increase benefits to employees? The more successful the company, the more successful the employees, the greater the profit, the more everyone wins.

Secondly, and perhaps more to the point, Smith failed to mention WFM's policy that caps executive salaries at $19 for every $1 made by their average full-time team members. That may still sound like a lot -- but to put that in perspective, as of 2005 the average US CEO was making $411 on every employee dollar. That's a twenty thousand percent difference between Mackey's "evil" earnings and those of the other executives with whom Smith has lumped him. What more, since 2007 Mackey has reduced his salary to $1, directing to the rest to charitable organizations such as the Whole Planet Foundation and Animal Compassion Foundation. In addition, I have heard that close to 90% of stock options are offered to team members, not upper management. Are these the actions of an evil mastermind, someone who milks his "workers" for all they're worth so he can fatten his pockets from the profits?

Smith also attacked WFM's high prices, as if this is a cruel and unusual practice. Largely thanks to the market created by -- and the standards set by -- Whole Foods, there now exists a wide array of healthy grocers from which to choose. Customers are not forced to shop there any more that the employees are forced to work there. As a customer, I prefer produce from my garden, the local farmer's market, the local co-op, Whole Foods, and then the standard markets -- in that order. However, I buy my toiletries in bulk when possible to reduce packaging waste, and Whole Foods provides that in a convenient and cost-effective way. They also have the widest selection of the locally-grown, small-batch artisanal products that I prefer. For these items, and many others I freely choose to shop at the store that best serves my needs. In fact, a lot of people do -- which is how WFM grew from a "mom and pop operation" into what it is today, beating the odds by competing against conglomerate grocery chains with more purchasing power and lower prices.

WFM also provides the single greatest opportunity for all the courageous conscious entrepreneurs I know -- people creating healthy, environmentally sustainable, artisanal, innovative, socially beneficial goods. People who, without WFM, would have a limited marketplace to reach the consumers who want their products.

I recently walked the halls of the Natural Products Expo, the largest of its kind in the world, where over 1900 vendors from all over the country come to market their conscious products. Helping to evaluate companies for potential investment, I asked many of them where they sell their products. Every time, the response was the same: "WFM! Thank God!," or "Hopefully we will get into WFM soon!" I'd wager that 5% or less sold their products to Wal-Mart, who only started even tracking interest in organic and sustainable goods in 2007 -- and whose green branding website LiveBetterIndex.com, which shows state-specific "adoption rates" for a depressingly limited palette of eco-friendly items, hasn't been updated in over a year.

I have had the opportunity to engage with Whole Foods team-members on both store and corporate levels. In each and every case, I encountered a conscientious, thoughtful individual with a passion for making the world a better place and a commitment to the purpose of Whole Foods (which includes and transcends all of their corporate practices). If any other grocery business doing a better job, I guarantee you that WFM is open to learning from them. They are quick to evolve and improve, to expand their mission and practices to create value for the most stakeholders -- not at the expense of the employees, but for and because of them. They call this a stakeholder-centric model -- one practice among many that other leading businesses ought to model, and that emerging entrepreneurs ought to build into their corporate DNA from the beginning.

The point is this: legitimate critical analysis distinguishes between whole and part, rather than leveraging one controversial practice to rationalize sweeping proclamations of evil. Whether history decides that WFM's stance against unions is wise or misguided, this single issue hardly outweighs the tremendous good that WFM has done for the culture of sustainability. Smith would do well to remember the overarching and increasingly urgent priorities of progressive business.

We as advocates need to prove through every vehicle available that a more sustainable, more just, more efficient, more successful way is possible. When we do this, we move from being a counter-movement, to the new guard -- the standard bearers of a widely accepted values system -- because the strategies for peace, happiness and prosperity simply work better.

I encourage anyone interested to read the following paper by John Mackey about Conscious Capitalism and leave your comments below. Consider these issues yourself and let me know: Do you think Whole Foods Market is "just another evil corporation?"

http://www.flowidealism.org/2007/Downloads/Conscious-Capitalism_JM.pdf

(If you agree with me, please distribute this, and take a stand with me against such slanderous and uninformed mudslinging wherever you may find it.)

For a deeper dive, check out Mackey's CD:
Passion and Purpose, the Power of Conscious Capitalism

...and his co-founder at FLOW, Michael Strong's new book:
Be The Solution: How Entrepreneurs and Conscious Capitalists Can Solve All the World's Problems

Comments

[skooch]

I personally do not shop at Whole Foods because I am a member of a coop where I can get better quality food for cheaper prices. I do have problems with some of Whole Food's practices, namely their ridiculous markups, some of their questionable marketing tactics, and their attempts to push their own private label. The marketing practices I am referring to are how they have a picture of "Tom the Local Apple Farmer" next to the apples which were actually shipped from Costa Rica. I have also read that Whole Foods buys little food from local farmers and is primarily interested in pushing their own 365 brand over other sources of food.

Like any public corporation Whole Foods' primary concern needs to be their stockholders, not their customers or their employees. My problem with Whole Foods is that they unabashedly appeal to higher earning demographics concern for the environment to get them to pay very high prices. I do think that Whole Foods is better than, say, Wal-Mart as far as their ethical practices. But I do not think that they do enough good in the world for me to pay such high prices, and I have problems with them presenting the image that by spending money there I am helping to save the environment and protect the local farmers when that is not entirely the case.

[PaulLandraitis]

IIt is much easier to criticize imperfect early exemplars of “Conscious Capitalism” like Whole Foods and John Mackey than to engage in the messy real-world experimentation needed to enable our children’s generation to reliably build sustainable businesses that are good for all of their stakeholders. A balanced, pragmatic idealism is needed to move us forward to this next level of socio-economic development; not more tired rhetoric, worn-out identity politics, and Left / Right polarization based on outmoded assumptions. Sharon Smith’s article is an unfortunate showcase of just such a set of limiting assumptions. Christiana’s most recent blog does a good job of respectfully illuminating and suggesting updates to these assumptions.

We need to focus more on what we have in common, and on what we want to create together going forward. Merely reacting against what we see as less than perfect won’t build a better tomorrow. I want my seventeen-year-old son will live in a world where he will be able to make a good living doing work that is good for his community and the world at large. I hope his choices are not limited to a subsistence income at pristinely ‘Green’ non-profit, being a greedy executive at an exploitative corporation, or working for the federal government. My fondest wish is that he work with bright and energetic young people like Christiana Wyly, and play a role in developing sustainable, responsible economic organizations that fully deserve the title Conscious Capitalism.

[kimcam]

In a capitalistic market economy business is ultimately
based on voluntary exchange; all the main constituencies
of a business (such as customers, employees, suppliers,
and investors) voluntarily exchange with the business
to create value for themselves and for others. No
constituency is coerced to exchange against their will.
[...] If our team members are
unhappy with their wages, benefits, or working conditions,
they are free to seek a job with a different firm that
provides more of what they seek. [...] All the constituents therefore exchange voluntarily for
mutual benefit, and they are free to exit the relationship
whenever they wish.--from the Conscious Capitalism article Wyly suggests

Most people from unprivileged backgrounds realize that "free," and "choose," and "voluntary" are relative terms. Workers in most places of the world are not, in fact, "free" to work somewhere else "that provides more of what they seek ." Workers in isolated or rural areas, or areas where exploitative practices reign most often cannot choose to work or move somewhere else. Instead, workers must "choose" from a limited set of often very poor, exploitative, and even dangerous options. Mackey might argue that this vulnerability is due to mistakes made in the ethical compact among employers, stakeholders, and employees, and that "conscious" capitalism moves to correct this error. However, the ethical agreement is always already a lopsided one, and most people in the word are affected negatively by it. Failing to acknowledge this is irresponsible.

[Michael Strong]

"the ethical agreement is always already a lopsided one, and most people in the world are affected negatively by it. Failing to acknowledge this is irresponsible."

John and I co-founded FLOW because we were frustrated that ignorance contributed to poverty, war, environmental degradation, and misery. Of course I am biased; John's moral and financial influence makes me more tolerant of those whose ignorance perpetuates poverty.

Poverty is caused by a lack of economic freedom. Kimcam and others may regard this as "ideological." But the fact that it is easier to open up a legal business in Denmark than it is in any developing nation is not ideological. In Mexico Notary Publics must notarize all business documents, but unlike a $5-10 charge as in the U.S., they charge $500-1000 for each document, thus limiting legal entrepreneurship to the elite.

Gurcharan Das estimates that at the rates of economic growth experienced under Nehruvian socialism, India would reach a U.S. standard of living in 2300, whereas at the rates of growth experienced since economic liberalization, India will reach a U.S. standard of living around 2050. There is no moral justification for keeping a billion people poor unnecessarily for 250 years.

Anyone who does not acknowledge the obstacles to legal business creation in the developing world is sentencing billions of human beings to ongoing poverty and exploitation. Failing to acknowledge this is irresponsible.

[Michael Strong]

And, for the record, I am very much from an underprivileged background, the child of a high school dropout with extended family members in the underclass who were convicted felons, murderers, strippers, prostitutes, drug dealers, welfare mothers, etc., and my personal experience is that people in my family who worked hard and had good habits had plenty of voluntary choice, and that the ones who ultimately found themselves in the worst situations, without choices, did not have good habits and typically spent years destroying themselves. Whether or not my personal experience is representative is a much larger conversation, but it was certainly true in my family.

And in order to help people escape the underclass, I spent fifteen years in K-12 education, creating schools that were highly successful at giving young people excellent intellectual, social, and professional habits so that they would have abundant opportunities and not be subject to exploitation. I am very much a practitioner of our motto, "Criticize by creating," and if it there were not so many legal obstacles to improving kids lives, I would continue to do so. I am not about criticizing the underclass for having bad habits; I am about creating new schools at which they learn those habits needed to have successful lives. See my manifesto here:

http://www.changethis.com/38.03.EdInnovation

[RobinSeattle]

I noticed in your bio you work for an investment firm and we all know what people in that line of work think of unions. Your statement about CEOs inherently creating more value has been shown to be poppycock since bonuses get paid out even if a company ends up on the verge (or over the cliff) of bankruptcy.

You cannot have a society where 10% of the population has all the wealth, unless you want to see the U.S. turn into Mexico or the Phillipines. Those wages at Whole Foods are not family wages. But then again, maybe you don't care about families, just what is good for the bottom line or the CEO's benefits package.

Really, I recommend that you try getting in touch with the real world sometime.

[Christiana Wyly - Huffpost Blogger]

Thank You for taking the time to comment and express your perspective. The assumption that "people in my line of work- investments" think negatively on unions is an unfair generalization. While I have never been in a union myself, I have friends in unions in the entertainment business, and I appreciate the protection they get through their alliance. I did not take a stance against unions. I took a stance against demonizing an excellent (not perfect) business based on a political assumption that unions are always good and whole foods is evil. Contrary to your assumption on the nature of investors as a "type" of person- I came to investments through activism, not to maximize my income at the expense of others. I have been a life long environmental advocate, and realized that businesses operating unsustainably have caused much ill health to our people and environment- so transforming those businesses and creating new ones would be an effective way to restore our world. Businesses like these can not exist without aligned investors. We need to break down these assumptions- that all investors are out for maximum profit at the expense of all other stakeholders. My colleagues, and thousands of our peers are out to prove these stereotypes incorrect.

[Wickywoo]

Union busting is union busting. Costco likewise has always been pretty good, but they're engaging in this practice and will not get my money as long as they continue

Corporations are sociopathic entitities by nature, and should be dealt with like the children they are and seriously spanked when they get out of line

[TomFox]

Good points...you might like the documentary "The Corporation" if you haven't already seen it. It goes into detail about the sociopathic nature of this aberration.

[Thermodynamics]

pro
-One of the best things about WFM is that it provides opportunity for people stuck in food service jobs to work their way up to a reasonable living income. They do have a system that rewards good workers. It takes a few years but WFM is not dead-end like working in a restaurant kitchen. You can become a dept head or store manager. Lots of kids get stuck in fast food or restaurant jobs, and WFM has been a good way for many of them to rescue themselves. The downside is that your hours have to be flexible- you can't have the same schedule every day- this is hard for parents.
-WFM has made natural food mainstream.

con
-Drives local stores into bankruptcy, or almost there.
-Anti-union
-apolitical - not an organization site for social change
-WFM loses points in arguments about sustainability --- When it comes to gray areas that consumers don't know much about, WFM chooses to sell environmentally questionable varieties. Yet they pose as oh-so-green. Think about swordfish, tuna, orange roughy, sea bass, farmed salmon, caviar, fed-lot organic beef, and stuff flown in from Chile, etc. Some local independent stores are more righteous in these areas and some are not

[BrianJohnson]

First, I'm a friend of John Mackey's and Christiana's so I'm totally biased here. :)

Having said that, I think Christiana's article is brilliantly written and presents a much needed perspective to counter the underlying bias against ALL corporations, against free markets/capitalism in general, etc.

As another commenter said, if perfection is our standard we're in trouble. The fact is that if we think businesses (big and small) can be leveraged as forces for social good, we'd be mistaken not to look at the way Whole Foods runs their business. Focusing exclusively on potential short-comings, for me, simply reveals an *incredibly* rigid and ultimately ineffective perspective.

From a personal perspective, I'll say that as a conscious entrepreneur committed to integrating my spirituality and my economics, John Mackey has been one of my deepest inspirations. I can still remember the first time I read his debate with Milton Friedman and was IN TEARS as I felt I finally met someone (at the time only via his writing) who could articulate (both intellectually and by creating one of the largest businesses in the world) the ideals of how business can be used as a force for good.

Article here: http://bit.ly/nDbYU

Thanks for your work, Christiana!!!

[petef59]

Whole Foods largely created and set the standards for a whole array of healthy grocers? I don't think so. Small local co-ops are more likely the original standard setters.
Sustainability? Again, more local producers selling in local markets is true sustainability. Since when is shipping prepackaged items all over the country sustainable?
Finally, when I see healthy grocers in low-income neighborhoods I'll believe their committment to sustainability. Serving those most in need of a healthy food supply is action-not just talk.

[MMMobley]

Christiana,

Well written! I think anyone making a difference in our world, no matter how big or small,
is doing more for making our world a better place to live than most people.

Whole Foods offers many more healthy alternatives than all most other Markets and
while that may cost a little more....it is well worth it!

Great job on responding to Sharon Smith's article......We need more people like you coming
from a more healthy and realized perspective!

Marta M. Mobley

[Indra]

I do think that one of the major probles is that when the whole foods industry becomes just that "a whole foods industry" there are problems. I agree with most of what you say but watch out there are wolfs in sheeps clothing out there also. By the way Adolf Hitler was a vegetarian.

[Christiana Wyly - Huffpost Blogger]

Why is it that "industry" is automatically evil. Do conscious caring people become evil as soon as their businesses become successful? Why is big always bad? If we all went out and started sustainable companies- would it be bad if we were all really successful? Or would the world look differently if we were all able to build profitable companies that employees were excited to work for- that shareholders were thrilled to own, that customers were delighted to frequent, and that vendors were happy to sell to. This is the world that I am advocating for, and it wont happen if we do not work at creating it through vehicles like whole foods, and many many others.

[TomFox]

What you advocate makes sense. I think part of the problem lies with the legal responsibility of the corporation to maximize shareholder profits, and by extension return on investment.

I used to work for a global mining company that I was totally excited to be working for. I had a team of 18 women that reported to me and I did my best as a guy supervisor to make sure they were treated fairly and accorded the respect they deserved. For whatever reasons I was let go, (was never told why) and someone else was brought in. Now, it didn't matter that I was jazzed about mining. The other guy was a better cost reducer, profit maximizer than I was. In fact, it probably didn't matter to management that I was into the discipline of mining more than my successor. He was perceived as better and in reality he probably was better at the bottom line stuff than I was. But I know I was good a creating a great work place, I just didn't know how to integrate the two, being a lefty and all I guess.

In the end, profits, reducing costs and maximizing ROI seem to be the only things that matter, love of the business not withstanding. Until we can recover a sense of "art" in our work, I'm afraid we'll be stuck here. BTW, no complaints about my former employer, they were good to me for 8 years.

[davidhills]

Wow, there's a lot of pretty strong feelings out there! 1)WFM is a for profit corporation and no one is being forced to shop there.2)WFm has incentives for each department to inspire profitabity AND for each department to work towards the profitability of the whole store.3) Management has historically been very open with employees regarding all P&L info.4) employees get hourly pay, share in profit sharing, and stock purchase plan.5)People run the company, and we should all scream and shout about how we want them to act and they have historically listened (they got grief for not buying local and have pledged to buy local).6)If #5 doesn't work, make more noise!

[Christiana Wyly - Huffpost Blogger]

Thank you David, I appreciate this coming from you, a long time advocate and professional sustainable investor. Your perspective on these issues is valuable.

[WholeFoodsMarket]

In continuation...

Sharon’s article also suggested that John Mackey pressured Team Members to vote to downgrade their health care benefits and offered only one plan choice in order to save money in 2004. Actually, Team Members voted among three medical insurance plan options in 2004. The plan they chose includes a personal wellness account of up to $1,800 per Team Member that they can use to offset the higher deductible of their new plan, which also includes zero premium contributions for full-time team members. And about 87% of team members qualify as full-time employees — an extremely high rate for retail. Part-time team members are also eligible — they pay their own premiums.

That article also said that Whole Foods Market had UFW protestors arrested for coming to a store and distributing literature. We did not involve the police in any events staged by protestors in recent years, including last year’s UFW press conference outside our headquarters, which followed an event hosted by Whole Foods Market where the UFW peacefully presented a petition.

We regularly hold storewide Town Hall meetings for Team Members and regional leadership to exchange information in person. In recent meetings at all stores we went over the proposed EFCA bill. At all these meetings, Team Members were reminded of their legal right to choose third-party representation.

Thanks for the opportunity to share these facts with your readers.

[WholeFoodsMarket]

HuffPost's Pick

Whole Foods Market Communication Team here (Paige and Libba, specifically, on behalf of others). A big thank-you to Christiana Wyly for this post – not something we were expecting. (As one commenter pointed out, Christiana has connections to FLOW but no one from our Communication Team worked with her or supplied information for her article.)

Just want to throw a few more facts in here that Christiana didn’t have access to. The piece by Sharon Smith incorrectly listed average Team Member pay and speculated on Team Members’ age and rate of advancement from store level to senior positions. Actually, wages for our store team members average $15 an hour and the average age of a Team Member is 36. (Feel free to insert “aging hippy joke” here!) Also, about 90% of Team Members in store leadership positions were promoted from other positions within the store, and the majority of our regional leadership and most of our global leadership rose to their positions from starting at the store level.

Wages and benefits of our Team Members in most instances meet or exceed union compensation. Team Members get a higher percentage of revenues (23-25%) as pay and benefits than the industry norm. They also get yearly stock option grants after three years of service and a 20% discount on all store purchases.

More in next comment.

[Christiana Wyly - Huffpost Blogger]

Thank You to the WFM communications team for sharing some facts that can help us in our discussions. There is no point arguing about hearsay.

[GetAbike]

Well Christiana, The title of the article you were so offended by was a question. If I was an employee wanting to organize, I would have to say yes, they are definitely evil.
If I was an 18 y.o. at my first job, I'd say "no, dude! they are totally not evil! $8.50/ hr is awesome pay".
WFM may boast sustainability, but living wages?- not so much.

Lorrianne nailed it - I also dislike the green-washing done by corporations and especially the use of the word "sustainable". That word will go the same way as "natural" and "organic" - meaningless marketing terms with little or no regulation to back them up.

Personally i like Employee owned super markets and the local farmers market for sustainability and living wages.

[Christiana Wyly - Huffpost Blogger]

WFM is employee owned. According to the representative from WFM, Team memers get yearly stock option grants after three years of service.

[AmishFarmer]

As far as unionizing Whole Foods is concerned, that seems like a pretty naive idea. Trying to take cashier jobs and turn them into a long-term place to fund raising a family and a mortgage is a bad idea and will inevitably turn out like a United Auto Workers gig. That model is UNSUSTAINABLE, and there are millions of autoworkers and former autoworkers who are suffering now because they falsely believed that these positions were sustainable.

A better model for Whole Foods is to hire people who are using the job as a stepping stone to a better place in their life. That actually seems more sustainable than trying to convince people that a cashier job at Whole Foods is a career path. And if people are telling you that it's a job you would want for the next 20 years, they are wrong.

I have never owned Whole Foods stock (or shorted it). But, the notion of feeding billions of people who can't grow their own food or slaughter their own meat with all locally produced products is patently absurd and clearly unaffordable. Developing large scale distribution channels for better foods (and serving the demand) is the only viable approach towards developing sustainability inside the food chain. And the only people who seem to be focused on solving that problem is Whole Foods.