The Hub: Whole Goals

Coming out of the ‘60s, Michael Besancon was looking for something to do that would contribute to the betterment of the world. His search found its mark in June 1970, when he opened a vegetarian lunch counter at Follow Your Heart, an 800 square-foot natural-foods store.Michael eventually bought the store with some partners and opened a second location before selling his interest some 16 years later. Being a serial entrepreneur, he went on to launch some restaurants, and then, in the early ‘90s, became a food broker.One of his customers was a 27-store chain called Whole Foods Market, and Michael was smitten. “What attracted me to Whole Foods was the culture, because I was really not cut out for the corporate world,” says Michael. “I don’t like to be told what to do, and at Whole Foods you really determine your own destiny.”After joining Whole Foods in 1994 as a purchasing director, Michael rose steadily to his current, lofty role as senior global vice-president of procurement, distribution and communications. It’s a long and curious title, as Michael readily admits.“It’s all about the product and the mission,” he explains. “Since the communications are about the product and mission, those two things need to be intimately linked. It’s all about the story. It’s all about the product. The product drives the story rather than the sales idea driving the product.”The mission, of course, is no small thing: to bring natural and organic food to as many people as possible, improve their health, and change agriculture in the United States and the world.It’s the exact same mission Michael envisioned more than 40 years ago.• • •To what extent has Whole Foods changed the way the world eats?It’s not just Whole Foods, it’s also a lot of vendors, suppliers and distributors. This is a $30 billion movement. There are four million acres of land under organic production today. I guarantee you that those numbers were infinitesimal in 1970. My original store made $25 the first week. Whole Foods is now a $10 billion company, so it definitely has grown!How long will it be before the vision is fully realized?I don’t think in terms of full realization because there is always a new layer, there’s always a new challenge. There’s not an end goal. We’ve evolved and morphed over the years as a company and we’re going to continue to do that both in response to new realities in the world as well as to consumer demand.One challenge is that the cost of organic food is still very high.Prices are coming down. The differential between organic and conventional has shrunk a great deal over the last ten years as production has increased. That’s just the natural outgrowth of scale. Quality costs money. Will animals raised with care on a vegetarian diet without antibiotics or added hormones be as cheap as conventional beef? Probably not, because you take a certain level of care. That’s true of any product, whether it’s food or clothing or electronics. You pay for what you get.If you’re looking for the highest nutrient value, a conscious production model that contributes to the health of the planet, health of both the workers and the consumers, then there is a greater cost. But it’s much less than it was.Which is more important: organic or local?I don’t see one as being more important than the other. With changes in climate, demographics and density, we are greatly at risk if we are not producing food locally, both on a US and worldwide basis. It is extremely important to recreate the local food economy and the local food shed.But the overall mission is to drive as much product as possible to organic, sustainable production and away from chemicals and monoculture. These two goals are not in conflict. Some people will choose local and some people will chose organic. Personally, I choose organic, but I want to encourage local to move towards organic.Is the culture at Whole Foods as all-natural as the food it sells?Our culture is based on our core values. The first core value is selling the highest quality natural and organic food. It is the touchstone for the culture. This commitment is what attracts a great number of the team members. It’s an evolution, it’s growing and changing, but it’s authentic and genuine.Our success is based on the fact that the folks who come into the store find something different about the store. People shop at Whole Foods for the experience, the ambience, and because of their relationship with that local store and the team members in that store. The Whole Foods culture is as natural and organic as it can be and it reflects the products that we are selling.How does that culture make the shopping experience better?The biggest part of the Whole Foods culture is empowerment, truly empowering the folks in the stores. This is a bottom-up company, not a top-down company. Certainly direction and vision is the responsibility of leadership at any level — whether it’s store, regional or global level. But the vast majority of innovation comes from the store and the regional level.How do you make that innovation happen?We make it happen by actually doing it. I received an interesting comment from a long-time shopper recently who had been talking to a team member in a store. The comment was they didn’t realize how much control team members have over the area that they are responsible for. They have the ability to add and delete product, to move product on the shelf, and to promote product if necessary. That’s a deep level of power.What distinguishes the people who work in your stores?There are a number of levels. One is a passion for the product and also a passion for the culture. There are a lot of cultural warriors at Whole Foods who champion our empowered, responsible culture. We attract people through that.Ninety-nine percent of the interviews that are done at Whole Foods are done with a panel, rather than with one or two human-resources people. The panel is both cross-functional and composed of people from the team that the person is going to be on. At my most recent interview, there were something approaching 30 people on the panel who were going to decide whether I had the position or not.That’s got to be a little intimidating.You know, it’s funny, it is. The way I explain it to folks is that this is really daunting. You’re going to walk into a room. You’re going to make a presentation. You’re going to ask questions. And there are going to be six to 20 people, typically, in the room. The bad news is that a whole bunch of people are going to be looking at you. The good news is that unless you really blow it, it’s hard to lose all of them at once.It’s a very interesting and extremely powerful process, both for the interviewee as well as for the people on the panel, because they are typically the people who are going to be reporting to, or working with, this person.They’re going to choose the person and that is incredibly powerful in creating a team and creating camaraderie. We use the same process for every job at every level. Cashier. Dishwasher. The panel may get smaller, but it’s going to be members of that team on the panel.What would it take to blow the interview?Two things: One is lack of experience, and the other would be lack of authenticity. You can snow a couple folks; it’s hard to snow a bunch. It’s always been that way. People from outside the company constantly ask whether the panels are scalable. Well, now we’re approaching 60,000 team members, so it’s demonstrated its ability to scale.Is there a typical Whole Foods shopper?No. There really isn’t. People would like to make it a ’60s Baby Boomer, but it really crosses all generations, races, religions, creeds, political outlooks. You stand in a store — whether it’s in New York or LA — and what you see is a tremendous diversity that reflects the community. You see folks on food stamps and folks in Bentleys. It’s an egalitarian approach to customers. We don’t want to exclude anyone.Why does Whole Foods attract such diversity?The concern for health — both personal, family and health of the planet — is not something that can be attributed to one group. There is a motivational factor. It doesn’t matter whether you make a lot of money or a little money or whether you’ve got a lot of education or no education.If you live in the community, there are people who are concerned, have an awareness, and make conscious decisions on what it is they are going to put in their bodies and what they are going to spend their dollars on.How would you like those shoppers to feel when they’re in the store?You want them to feel safe and confident that there has been a high degree of due diligence to chose the products. You want them to know that, in business-dealings, it’s been a win-win-win to the greatest degree for everyone involved, from the production to the consumption of that product.What is best way to communicate that?The best way is one-on-one with the team member. We have typically more team members working than in an average grocery store. There is more service going on. That’s intentional, because we want a greater personal exchange between Whole Foods and the shopper.What’s your favorite thing about shopping at Whole Foods?Other than the overall purpose of the product, and that it’s organic, I think it’s the treasure hunt. It’s finding what’s new to you. It may be something from another part of the world, another food experience. It would also be education, learning more about the food transparency; where does it come from, how is it grown, who grew it and why do I want it?Is that also conveyed mostly through team members?It’s through the team members, through the signage, and more and more it’s through digital media. An industry publication recently rated Whole Foods Market as the number-one social media grocer in America. We have 490,000-plus “likes” on Facebook and our closest competitor has 120,000. So, that’s huge, and it’s about communicating rather than selling.Recipes, information and education are the primary functions of our social media; promotion is lower on the list. Our shoppers want to know what’s a good deal, but that’s not all they want. The Whole Foods Market shopper wants the experience. They want the new recipe and to learn how to use that food that they’ve never eaten before. They want to have the educational information that allows them to make better-informed choices.How else will the Whole Foods shopping experience evolve?It’s really hard to envision. We move very fast. We don’t have a five-year plan; our plan is to move as quickly as we can to stay ahead. I think we did a tremendous job during the recession in responding to what our shoppers needed and wanted. We will continue to do that through experimentation.We’ve got experimentations going on in our 300-plus stores — whether it’s product, format or design. All the stores are designed locally and that leads to tremendous innovation and experimentation. So, what are we going to look like? I haven’t a clue. But it’s out there. Somebody’s great idea is already happening.Given your local focus, how different is each store?There’s a similarity because there is a feel when you walk into a Whole Foods Market anywhere in the world. You know you are in a Whole Foods Market, but it isn’t the same.Each store reflects the community. Las Vegas is hot most of the year, and the casinos are full of excitement, so we tried to make the inside of the store cool, calm and soothing.The stores in Hawaii are more tropical, more island. But there is no mistaking it’s a Whole Foods Market. That’s really hard to articulate but those stores are reflective of their diverse communities and what works in each environment.What creates consistency when each store is different?It’s really an intangible. It’s the reflections of the core values. It’s the focus on presenting the product, presenting light, energy and color. We try to minimize fixtures and maximize product. It’s really an intangible, but it’s consistent even though each store is different.What is the biggest opportunity for innovation at Whole Foods right now?I think new media and the mobile platform is the biggest opportunity. The most dramatic change will be this digital revolution and the shift in focus from the Baby Boomers to Gen X and Gen Y — particularly Gen Y, which is a huge population that is now setting up households. To be relevant ten years from now, we have to be the food store of choice of Gen Y.Global is also part of your job description.Yeah, I was kind of opting for celestial, but global was as grandiose as it could go. I’m sorry, what was the question?I didn’t ask one yet, but what are your challenges as a global brand?We’re very successful with expansion in Canada and the UK. You have to do a tremendous amount of due diligence on the regulatory aspects and language is an enormous barrier because it’s hard to translate the culture. You don’t want to just open a store somewhere and put the logo on it. It needs to be Whole Foods, and to be Whole Foods, it has to have the culture.Would Whole Foods extend its culture into other kinds of businesses?I would say that anything is possible and some things are not likely. You have to be very protective of the brand and not dilute it. I don’t think that we would look at something that was totally separate and outside of what we do. Usually you do that when you feel that your growth is limited or you’ve captured growth. We’ve got lots of room to grow, to double or triple the number of stores, with what we have already.What’s your advice to national brands that want to work with you?To work with Whole Foods, you have to understand the core values, understand the quality standards and what we’re looking to do. You have to have some kind of reason for your product to exist. There has to be a cachet. It just can’t be a “me-too” knock off.Where people really stumble in trying to come to Whole Foods is not understanding one of your original questions: are we really that committed? And the answer is yes. We’re really that committed. People come in with a product and we need to know how that product was manufactured, where it was manufactured, what are all the ingredients, where are they from, blah, blah, blah … all those things.I’ve been doing the purchasing for 16 years for Whole Foods and people kind of stare at me because they don’t know the answers to these questions. The transparency is not only important to us so that we can confirm all of our quality standards and core values, but it’s also what drove the new food-safety law.The consumer wants assurance that there has been due diligence on the products. That becomes increasingly more difficult. The bigger you get, the more products you have. It is the biggest barrier for a packaged-goods company coming into Whole Foods. Right now it’s, what’s your package made of? How is your package made? What’s your carbon footprint? All of those things are questions that are current or of the future.And it’s ever-changing. I have a lot of empathy for our suppliers because our quality standards are evolving and getting stricter. For example, there may be chemicals that are discovered in the environment or a species of fish may move to the red-listed category. We are always evolving and improving, but it’s not easy. In fact, it’s very difficult.How does that focus on the product affect your marketing?We’ve never advertised to any great extent in the traditional sense. We have a very small marketing budget. We believe that our greatest advertising is word-of-mouth. It’s the team members and the customers who are the advocates, and that’s who builds our business. It’s not built on “advertising.” The nice thing about social media is that you can have relatively one-on-one, self-selected, opt-in conversations with people. That is very powerful, and that’s the future.Which of your competitors do you respect the most?I respect anybody who sells food. As a company, we look at everybody who sells food. We look at what they are doing and how they do it. We look for ideas all over the world. We still travel extensively, right down to farmers’ markets in Brazil and Ecuador. What’s there? What are they doing? How are they presenting it? What’s authentic about the way they do it?If you don’t respect your competition, then you’re ignoring them from my point-of-view. To ignore somebody is a blind spot that puts you at risk from the standpoint of innovation. You wouldn’t want to lose sight of somebody who’s doing something very clever and meeting a need that we’re not meeting.What has been your biggest surprise over the past 40 years?The biggest surprise is an accumulative one. It’s about waking up every morning and remembering the 800 square-foot store I opened in 1970, where the movement was then and where it is today. I prefer “movement” to “industry”; there’s something kind of cold about “industry.”It amazes me that the natural and organic food movement is now mainstream and worldwide. I was hiking in Turkey last May and came to a small village on the sea and saw an advertisement for an organic- food restaurant. That’s always a surprise and a delight because collectively, as a movement and a company, we have made a difference in the world.When you find organic food in a rural area of Turkey, that’s pretty significant. Or if you’re on a banana or coffee plantation and they are going organic, that’s when you know you’ve made a difference.Michael Besancon is senior global vice president of procurement, distribution and communications for Whole Foods Market. He also built, with partners, Follow Your Heart Natural Foods.

The Hub: Whole Goals

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