Much ado about Whole Foods

by Keith Nunes
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KANSAS CITY — Much has been written during the past week about Whole Foods’ announcement that it is launching a national advertising campaign. The goal of the campaign is to tell the retailer’s story and emphasize the values behind the brand.

“Whole Foods Market has been subtly telling our story for decades, and now is the time to overtly communicate what we’ve spent more than 35 years creating as change agents in the food world,” said Jeannine D’Addario, Whole Foods Market’s new global vice president of communications. “We are excited to share our stories, and to have deeper conversations with our customers so they can make meaningful choices about what they decide to buy and support.”

There is no doubt Whole Foods has a good story to tell, but the timing of its current marketing endeavor underscores the fact other retailers are enjoying success telling their stories and putting pressure on  the retailer. A story published this week in Business Insider and quoting a report by JP Morgan Chase forecasts the Kroger Co. may overtake Whole Foods as the leading vendor of organic and natural foodstuffs within two years.

Success breeds competition and the success of Whole Foods has not gone unnoticed by the rest of the retail industry. Brand’s ranging from Kroger’s Simple Truth to Aldi’s Simply Nature, Supervalu’s Wild Harvest and Safeway’s O Organics have all been introduced and developed with an eye toward giving Whole Foods customers a choice.

In its report “Private label foods and beverages in the U.S., 8th edition,” the market research firm Packaged Facts notes the emergence of so many organic and natural private label brands serve several functions for retailers.

“They usually have higher profit margins for retailers than name brands, help differentiate a retailer from competition, and help build consumer loyalty,” said David Sprinkle, research director for Packaged Facts.

The proliferation and success of such brands is putting pressure on Whole Foods and prompting the retailer to get its message out. This is a situation worth watching, because as competition in the category intensifies retailers are going to try and differentiate their offerings. Such efforts may include quality standards or more stringent product specifications. That can only mean suppliers to the category are going to face greater pressures as well.

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