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Whole Foods Valuation

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Whole Foods Valuation

  1. 1. Whole Foods Market Inc. Group10 0 Dylan Tucker Gerrit Thurston Keith Durante Robyn Hwang Whitney Fletcher Will Bergen Valuation Project
  2. 2. 1 Whole Foods is undervalued by 25%; we recommend an acquisition at $120 per share • Expand in customer demand • Cultivated strong brand loyalty • Well-positioned, giving an operational advantage _________________________________________________________________ Company Market Financial Analysis Value Drivers Valuation
  3. 3. 2 Company Market Financial Analysis Value Drivers Valuation
  4. 4. Whole Foods has established a niche in the natural and organic foods industry Retail Grocery Hypermarket Walmart Supermarket Kroger, Safeway Specialty Stores Local stores 3Company Market Financial Analysis Value Drivers Valuation _______________________________________________________
  5. 5. 4 Whole Foods has established a niche in the natural and organic foods industry Retail Grocery Hypermarket Walmart Supermarket Specialty Stores Whole Foods Company Market Financial Analysis Value Drivers Valuation _____________________________________________________
  6. 6. Mergers, acquisitions, and expansion have allowed Whole Foods to grow and prosper over time SaferWay 1978 Allegro Coffee (stock merger complete), 1997 Acquired Wild Oats Market, 2007Whole Foods incorporated, 1980 Expansion into U.K (purchase of Fresh & Wild, 2004 and 2011 Launched private brand, 365 Everyday Value, 1996 Top 100 company (FORBES), 14th consecutive Year, 2012 Went public on NASDAQ, 1992 5Company Market Financial Analysis Value Drivers Valuation
  7. 7. 6 Whole Foods has an established customer base and aims to expand it in the future High Income Low Income Health ConsciousNot Health Conscious Kroger Safeway Company Market Financial Analysis Value Drivers Valuation _________________________________________________________ Walmart Harris Teete r
  8. 8. 7 Whole Foods has an established customer base and aims to expand it in the future High Income Low Income Health ConsciousNot Health Conscious Kroger Safeway Company Market Financial Analysis Value Drivers Valuation _________________________________________________________ Walmart Harris Teete r
  9. 9. 8 Market Financial Analysis Value Drivers Valuation Company Market
  10. 10. 9Company Market Financial Analysis Value Drivers Valuation -10.00% -5.00% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 2005 2006 2007 2008 2009 2010 2011 2012 2013 PercentagechangeinRevenue Whole Foods is outgrowing Retail Grocery and Natural/Organic Industry Retail Grocery Industry Natural and Organic Industry Whole Foods
  11. 11. 10Company Market Financial Analysis Value Drivers Valuation -10.00% -5.00% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 2005 2006 2007 2008 2009 2010 2011 2012 2013 PercentagechangeinRevenue Retail Grocery Industry Natural and Organic Industry Whole Foods WF Averaged 18% Revenue Growth
  12. 12. 11Company Market Financial Analysis Value Drivers Valuation -10.00% -5.00% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 2005 2006 2007 2008 2009 2010 2011 2012 2013 PercentagechangeinRevenue Whole Foods maintained positive growth revenue during poor economy Retail Grocery Industry Natural and Organic Industry Whole Foods
  13. 13. 12 -10.00% -5.00% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 2005 2006 2007 2008 2009 2010 2011 2012 2013 PercentagechangeinRevenue Whole Foods is outgrowing Retail Grocery and Natural/Organic Industry Retail Grocery Industry Natural and Organic Industry Whole Foods Company Market Financial Analysis Value Drivers Valuation
  14. 14. Whole Foods has kept a high gross profit margin in comparison to competitors 13 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 2008 2009 2010 2011 2012 GrossProfitMargin% Whole Foods Market Kroger Safeway Harris Teeter Gross Profit Margin per year Company Market Financial Analysis Value Drivers Valuation _____________________________________________________________
  15. 15. 14 Market Financial Analysis Value Drivers Valuation Company Financial Analysis
  16. 16. Whole Foods is positioned to be very profitable in the future Company Market Financial Analysis Value Drivers Valuation _______________________________________________________ 1. Strong Potential For Store Growth 2. Increase In Sales 3. Operating Margin Will Improve 15 2009 2010 2011 2012 2013 2014 2015 2016 2017 Sales Revenue 80.3 90.1 101.1 113.8 128.5 144.3 162.5 182.9 206.0 Operating expense 77.4 85.6 95.6 107.2 120.5 135.5 152.5 171.6 193.1 Total Stores 284 299 311 334 364 397 431 465 500 Free Cash Flows 1.5 2.6 2.3 3.0 3.8 4.7 5.3 6.3 7.4
  17. 17. Store Growth Projections Company Market Financial Analysis Value Drivers Valuation 0 100 200 300 400 500 600 2009 2010 2011 2012 2013 2014 2015 2016 2017 16
  18. 18. Company Market Financial Analysis Value Drivers Valuation 0 100 200 300 400 500 600 2009 2010 2011 2012 2013 2014 2015 2016 2017  Aggressive Growth Strategy, is it possible?  Favorable leases due to real estate market  Positioned well internally to fund expansion.  Many markets ready to accept new retailers. Store Growth Projections 17
  19. 19. Whole Foods Is Building Capital 0 100 200 300 400 500 600 700 800 900 1000 2007 2008 2009 2010 2011 Debt Cash & Invesments 1. Cash/Investments 2. Stock Buy-Backs 3. Dividends 4. Accelerate Growth Company Market Financial Analysis Value Drivers Valuation Strategy: ____________________________________________________________ 18
  20. 20. Revenue Growth is Strong 2009 2010 2011 2012 2013 2014 2015 2016 2017 Sales Revenue 80.3 90.1 101.1 113.8 128.5 144.3 162.5 182.9 206.0 Growth % .98% 12.1% 12.2% 14.0% 16.0% 13.0% 13.0% 13.0% 13.0% Sales Revenue is comprised of: 1 Identical Store Sales Growth 2 New Store Sales  Increase in Transactions  Increase in Basket Size Company Market Financial Analysis Value Drivers Valuation 19
  21. 21. Revenue Growth is Strong 2009 2010 2011 2012 2013 2014 2015 2016 2017 Sales Revenue 80.3 90.1 101.1 113.8 128.5 144.3 162.5 182.9 206.0 Growth % .98% 12.1% 12.2% 14.0% 16.0% 13.0% 13.0% 13.0% 13.0% Sales Revenue is comprised of: 1 Identical Store Sales Growth 2 New Store Sales  Increase in Transactions  Increase in Basket Size  Average Growth: 4% 3% 7% 8.7% 8.1% 14.5% 11.5%10.3% 5.8% 3.6% -4.3% 6.5% 8.4% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 02' 03' 04' 05' 06' 07' 08' 09' 10' 11' Identical Stores Sales Growth Company Market Financial Analysis Value Drivers Valuation 20
  22. 22. New Stores Are Performing Extremely Well Opened three stores under their new design and EPV specs: 24Company Market Financial Analysis Value Drivers Valuation
  23. 23. New Stores Are Performing Extremely Well Opened three stores under their new design and EPV specs: • Smaller in size (14% smaller) Low Occupancy Costs Company Market Financial Analysis Value Drivers Valuation 25
  24. 24. New Stores Are Performing Extremely Well Opened three stores under their new design and EPV specs: • Smaller in size (14% smaller) Low Occupancy Costs • Experience Growth Team Staffed & Stocked well Company Market Financial Analysis Value Drivers Valuation 26
  25. 25. New Stores Are Performing Extremely Well Opened three stores under their new design and EPV specs: • Smaller in size (14% smaller) Low Occupancy Costs • Experience Growth Team • Strong Brand Name Staffed & Stocked well High Initial Sales Company Market Financial Analysis Value Drivers Valuation 27
  26. 26. New Stores Are Performing Extremely Well Opened three stores under their new design and EPV specs: • Smaller in size (14% smaller) Low Occupancy Costs • Experience Growth Team • Strong Brand Name Staffed & Stocked well High Initial Sales 14% higher sales overall Company Market Financial Analysis Value Drivers Valuation 28
  27. 27. 2009 2010 2011 2012 2013 2014 2015 2016 2017 Sales Revenue 80.3 90.1 101.1 113.8 128.5 144.3 162.5 182.9 206.0 Growth % .98% 12.1% 12.2% 14.0% 16.0% 13.0% 13.0% 13.0% 13.0% Sales Revenue is comprised of: 1 Identical Store Sales Growth 2 New Store Sales  Increase in Transactions  Increase in Basket Size  Average Growth: 4% 3% 7% 2012 2013 Total Stores 334 364 Opened stores 23 30 New Store Growth: 7% 9% Company Market Financial Analysis Value Drivers Valuation Revenue Growth is Strong 29
  28. 28. 2009 2010 2011 2012 2013 2014 2015 2016 2017 Sales Revenue 80.3 90.1 101.1 113.8 128.5 144.3 162.5 182.9 206.0 Growth % .98% 12.1% 12.2% 14.0% 16.0% 13.0% 13.0% 13.0% 13.0% Sales Revenue is comprised of: 1 Identical Store Sales Growth 2 New Store Sales  Increase in Transactions  Increase in Basket Size  Average Growth: 4% 3% 7% 2012 2013 Total Stores 334 364 Opened stores 23 30 New Store Growth: 7% 9% 7% 7% 14% 16%Total Sales Growth: Company Market Financial Analysis Value Drivers Valuation Revenue Growth is Strong 30
  29. 29. 2009 2010 2011 2012 2013 2014 2015 2016 2017 Sales Revenue 80.3 90.1 101.1 113.8 128.5 144.3 162.5 182.9 206.0 Growth % .98% 12.1% 12.2% 14.0% 16.0% 13.0% 13.0% 13.0% 13.0% Sales Revenue is comprised of: 1 Identical Store Sales Growth 2 New Store Sales  Increase in Transactions  Increase in Basket Size  Average Growth: 4% 3% 7% 2012 2013 Total Stores 334 364 Opened stores 23 30 New Store Growth: 7% 9% 7% 7% 14% 16%Total Sales Growth: Company Market Financial Analysis Value Drivers Valuation Revenue Growth is Strong 31
  30. 30. 2009 2010 2011 2012 2013 2014 2015 2016 2017 Sales Revenue 80.3 90.1 101.1 113.8 128.5 144.3 162.5 182.9 206.0 Growth % .98% 12.1% 12.2% 14.0% 16.0% 13.0% 13.0% 13.0% 13.0% Sales Revenue is comprised of: 1 Identical Store Sales Growth 2 New Store Sales  Increase in Transactions  Increase in Basket Size  Average Growth: 4% 3% 7% 2012 2013 Total Stores 334 364 Opened stores 23 30 New Store Growth: 7% 9% 7% 7% 14% 16%Total Sales Growth: Company Market Financial Analysis Value Drivers Valuation Revenue Growth is Strong 32
  31. 31. Company Market Financial Analysis Value Drivers Valuation 92.00% 92.50% 93.00% 93.50% 94.00% 94.50% 95.00% 95.50% 96.00% 96.50% 97.00% 2009 2010 2011 2012 2013 2014 2015 2016 2017 Operating expense as a percentage of revenue 3. Operating margin will improve____________________________________________________________ 33
  32. 32. Company Market Financial Analysis Value Drivers Valuation 92.00% 92.50% 93.00% 93.50% 94.00% 94.50% 95.00% 95.50% 96.00% 96.50% 97.00% 2009 2010 2011 2012 2013 2014 2015 2016 2017 Operating expense as a percentage of revenue Decrease in COGS Decrease in occupancy costs 3. Operating margin will improve____________________________________________________________ 34
  33. 33. Company Market Financial Analysis Value Drivers Valuation Decrease in COGS 3. Operating margin will improve____________________________________________________________ 35
  34. 34. Company Market Financial Analysis Value Drivers Valuation Decrease in COGS Data management technology 3. Operating margin will improve____________________________________________________________ 36
  35. 35. Company Market Financial Analysis Value Drivers Valuation Decrease in COGS Data management technology Relationship with suppliers 3. Operating margin will improve____________________________________________________________ 37
  36. 36. Company Market Financial Analysis Value Drivers Valuation Decrease in occupancy costs 3. Operating margin will improve____________________________________________________________ 38
  37. 37. Company Market Financial Analysis Value Drivers Valuation Decrease in occupancy costs Less expensive leases on new stores 16% increase in profits per sq. ft. 3. Operating margin will improve____________________________________________________________ 39
  38. 38. Company Market Financial Analysis Value Drivers Valuation 3. Operating margin will improve Decrease in occupancy costs Less expensive leases on new stores Renegotiating current leases 16% increase in profits per sq. ft. ____________________________________________________________ 40
  39. 39. Whole Foods is positioned to be very profitable in the future Company Market Financial Analysis Value Drivers Valuation ______________________________________________________ 0 50 100 150 200 250 2009 2010 2011 2012 2013 2014 2015 2016 2017 Sales revenue 0.000% 2.000% 4.000% 6.000% 8.000% 2009 2010 2011 2012 2013 2014 2015 2016 2017 Operating margin 0 200 400 600 2009 2010 2011 2012 2013 2014 2015 2016 2017 Number of stores 0 1 2 3 4 5 6 7 8 2009 2010 2011 2012 2013 2014 2015 2016 2017 Free cash flows 41
  40. 40. 42 Market Financial Analysis Value Drivers Valuation Company Value Drivers
  41. 41. 43Company Market Financial Analysis Value Drivers Valuation Health conscious living is here to stay $25,000 $30,000 $35,000 $40,000 2000 2003 2006 2009 2012 2015 Per Capita Disposable Income Per Capita Disposable Income Conventional Retail Grocers Organic Industry Growth •Low-cost and unhealthy •Older generation recognizing health issues •Younger generation feels little connection to retail grocers •U.S. disposable Income Increase •Baby Boomers are prioritizing health •83% organic purchases for health reasons •Millennials increasing spending power •Farmers markets 17% growth
  42. 42. 44 Whole Foods has cultivated positive image that connects with their market segment Company Market Financial Analysis Value Drivers Valuation __________________________________________________________ Brand Awareness Drivers Program / Initiative •Company aims to increase Credibility •Prioritize social and environmental compassion •Ethical codes / quality standards foster positive public perception •Committed to providing a unique and fresh experience •Whole Planet Initiative •Whole Kids Foundation •Whole Trade Guarantee •Shopping at Whole Foods is part of the “organic” experience
  43. 43. 45 Whole Foods’ is advantageously situated in regards to its suppliers • Strong relationships with suppliers •United Natural Foods Incorporated - 31% of whole foods supplies •Whole Foods has developed a “buying backwards” supply strategy •Allegro, Bread of Life, Fresh & Wild •Effective distribution infrastructure •Whole Foods has increased relationships with local suppliers •Project: Local Company Market Financial Analysis Value Drivers Valuation _____________________________________________
  44. 44. 46 Risks to consider____________________________ Risks Response New entrants Brand image and market experience Larger competitors’ pressure on suppliers Good relationship with suppliers Low switching costs of consumers Brand image and market experience Sensitivity to government regulation and environmental factors Knowledgeable and responsive Importance of brand image Good understanding and history Company Market Financial Analysis Value Drivers Valuation
  45. 45. 47 Market Financial Analysis Value Drivers Valuation Company Valuation
  46. 46. Scenario analysis suggests stock price value could fall between $82-206 per share Pessimistic Base Optimistic Revenue Growth Rate 9% 13.1% 17 % Weighted Average Cost of Capital 6% 5.2% 4.4% Perpetuity Growth Rate 1.4% 1.8% 2.3% Equity Value Per Share $82.18 $120.39 $206.10 Current Share Price $95.76 _________________________________________ __________________________________________________ __________________________________________________ Company Market Financial Analysis Value Drivers Valuation 48
  47. 47. 49 Whole Foods is undervalued by 25%; we recommend an acquisition at $120 per share • Expand in customer demand • Cultivated strong brand loyalty • Well-positioned, giving an operational advantage _________________________________________________________________ Company Market Financial Analysis Value Drivers Valuation
  48. 48. Appendix 50 1.Company (53-56) 2.Market (57-60) 3.Financial Analysis (61)
  49. 49. Appendix - History – completed a stock merger with allegro coffee in 1997 – opened in Manhattan in 2001 with a 30,000 square foot store – 2002-2011 expanded into the UK and Canada – launched a premium body care line in 2008 – what started as a small natural foods store with an initial investment of $45,000 has become a blossoming company, who placed in the top 100 of Forbes magazine top companies for its 14th consecutive year 51
  50. 50. Appendix-Matrix • Whole Foods has an established consumer base already, as depicted by the matrix above • successfully targeted Health Conscious consumers with high income and a high willingness to pay • they have used this market share to their advantage, as it has become an extremely profitable segment to target 52
  51. 51. Appendix-Matrix • in the future, they hope to target lower income families and individuals who are still health conscious (organic and natural food-sensitive purchasers) • they have moved towards this with various initiatives, most prominently their Whole Deal Program, which seeks – value guide available in all stores featuring coupons and budget conscious recipes with money saving shopping and cooking tips • issue deals which highlight everyday value pricing on high quality products – farm to fork traceability allows customers to make more informed decisions • Whole Foods targets its locations specifically by an area’s demographics – company targets locations specifically where 40 53
  52. 52. Whole Foods has focused on providing organic products at lower prices Whole Foods Market 365 Everyday Value (through various suppliers) Whole Foods Market (private label) Control brands (e.g. Columbia River Organics) Subsidiaries (e.g. Allegro Coffee Co.) Products (perishables, household supplies, body care, etc.) ____________________________________________________________ 11% of Whole Foods’ revenue in 2010 and 2011 Private label products in the U.S. experiencing increasing popularity 54
  53. 53. Kroger 19% Safeway 8% Supervalu 6% Publix 5% Whole Foods 2% Other 60% Supermarket Market Share • Low switching costs for consumers • Limited differentiation Supermarket industry remains very competitive____________________________________________________________ 55
  54. 54. Whole Foods Locations 56
  55. 55. 57 Whole Foods Foreign Growth
  56. 56. European Market Decrease in GM Food Production 2010: Over 148m hectares of GM crops planted in 29 countries -America largest with 66.8 hectares (2.8 more than 2009) -European countries subject to severe restrictions for growing GM crops • With a proper business model, Europ ean market shows potential for large profits. • Higher Demand for quality food/greater restrictions 58
  57. 57. Financial Analysis 2009 2010 2011 2012 2013 2014 2015 2016 2017 Sales Revenue 80.3 90.1 101.1 113.8 128.5 144.3 162.5 182.9 206.0 Growth % .98% 12.1% 12.2% 14.0% 16.0% 13.0% 13.0% 13.0% 13.0% Operating expense 77.4 85.6 95.6 107.2 120.5 135.5 152.5 171.6 193.1 Percent of Revenue 96.4% 95.1% 94.6% 94.2% 94.0% 93.90% 93.85% 93.80% 93.75% Net Income 1.6 2.6 3.4 3.9 4.6 5.2 5.9 6.8 7.7 Working Capital 2.3 2.4 2.8 3.2 3.7 4.0 4.5 5.1 5.7 CAPX 3.2 2.6 3.6 3.9 4.3 4.7 5.1 5.5 5.9 Stores in development 53 52 62 70 80 85 86 88 90 Opened stores 15 16 18 23 30 33 34 34 35 Total Stores 284 299 311 334 364 397 431 465 500 Free Cash Flows 1.5 2.6 2.3 3.0 3.8 4.7 5.3 6.3 7.4 59

Notes de l'éditeur

  • Hypermarket: All-in-one stores selling grocery and household products, appliances, etc.Supermarket: Mainly food and beverage productsSpecialty stores: Focus on select few products
  • Whole Foods has combined supermarket’s convenience with high-quality products from specialty stores. This is a unique niche that Whole Foods leads.
  • Talk about how its established a market segment already – pretty self explanatory…maybe work on visual
  • Talk about how its established a market segment already – pretty self explanatory…maybe work on visual
  • Whole Foods saw positive growth between 2005-2008, much of their can be attributed to them joining the S&P 500 in 2005. Further increase between 2007-2008 can be attributed to an increase in stores sales of 4%.
  • 2. However, when examining the Natural and Organic Food Industry, it grew by an average of 9.5% between 2010-2011. The future projections for growth of this industry are 11.5% which bods well for whole foods due to its continual growth in a thriving portion of the market.
  • 3. As the Organic Food Industry continues to grow, Whole Foods has benefitted due to its favorable portion within the market. Growth of 12% for the past two years is only expected to continue to grow, our estimates are that for the next two years Whole Foods revenue growth will be 15%.
  • When comparing Whole Foods to competitors within the grocery retail industry, the gross profit margin for the past 4 years has continued to grow for Whole Foods while major Retail Grocery leaders have been decline. Due to this information as well as the trends for both the Retail Grocery Industry and the Organic Industry, all major companies have began to launch their own product lines.Safeway, for example, announced that their O Organic line generated $100 million dollars in sales revenue between the fourth quarter of 2010 and the beginning of 2011.
  • John Mackey’s prediction. Recently assumed the slightly lower profile position of “CO” CEO, in light of his attention grabbing behavior. In 2007, he posted anonymously on financial blogs, attacking Whole’s Food’s Acquisition target Wild Oats, made public during the anti-trust suit later that year. Whole world moving towards healthy eating.
  • John Mackey’s prediction. Recently assumed the slightly lower profile position of “CO” CEO, in light of his attention grabbing behavior. In 2007, he posted anonymously on financial blogs, attacking Whole’s Food’s Acquisition target Wild Oats, made public during the anti-trust suit later that year. Whole world moving towards healthy eating.
  • Gone from nearly 1 billion in debt, to 850 million in Cash & Equivalents since 2007.{Whole Foods Market, Not Whole Foods Incorporated.}
  • Within operating expense:Direct store (salaries and benefits, supplies, marketing, depreciation) General and administrative (salaries and benefits, occupancy, corporate/regional admin costs) Pre-opening (rent, construction, hiring and training) Relocation, store closure, lease termination costs (Wild Oats – had 17/20 stores leased but unused as of Sept 2011)
  • Within operating expense:Direct store (salaries and benefits, supplies, marketing, depreciation) General and administrative (salaries and benefits, occupancy, corporate/regional admin costs) Pre-opening (rent, construction, hiring and training) Relocation, store closure, lease termination costs (Wild Oats – had 17/20 stores leased but unused as of Sept 2011)
  • Data management technology – optimization of distribution and inventoryfaster, more efficient storing and shippingReduction of waste
  • Data management technology – optimization of distribution and inventoryfaster, more efficient storing and shippingReduction of waste
  • Data management technology – optimization of distribution and inventoryfaster, more efficient storing and shippingReduction of waste
  • Data management technology – optimization of distribution and inventoryfaster, more efficient storing and shippingReduction of waste
  • Data management technology – optimization of distribution and inventoryfaster, more efficient storing and shippingReduction of waste
  • Data management technology – optimization of distribution and inventoryfaster, more efficient storing and shippingReduction of waste
  • Store expansion as the key strategy is working well, and existing stores performance is solid.Revenue growth is strong, partly as a result of a lower operating margin, which comes from improved efficiency while maintaining quality.On the whole, Whole Foods is positioned to be profitable in the near future, and as Will and Whitney will explain in more detail, this short term performance should continue into the long term as well.
  • 83% of consumers buy organic food for health reasonsFarmer’s markets have grown 17% from 2010-2011-Current dietary trends in the United states indicates a socio-economic shift towards the consumption of organic products that will increase demand for Whole Foods.-Per capita disposable income is often viewed as a pivotal indicator in gauging the state of a countries economy. As the U.S. continues to crawl its way out of the after effects of the recession people are beginning to increase the amount of disposable income they possess. Since organic food can be considered expensive, and somewhat of a luxury, this influx of disposable cash should increase demand for organic products. -Baby boomers will eventually represent the largest senior population in the history of the United States. As they continue to age their interest in healthy eating will continue to grow. One statistic that is indicative of this is that currently 83% of consumers assert that they purchase organic foods for health reasons.-As the Millennial generation increases in age, and spending power, it is certain to drive up demand for organic foods. The Millennial generation has grown up around the “fad” of organic culture and has chosen to embrace it. As Millennials make their way into the working world and increase their spending power they will contribute to the increased demand for organic products.
  • Intangible initiatives that increase whole foods value within their target margetInitiatives such as “Whole Planet” have increased Whole Foods credibility with their market segment. Whole Foods customers are globally minded, progressive, individuals. The “Whole Planet” initiative seeks to alleviate poverty through microfinancing projects in communities around the world that supply Whole Foods with products. Whole Foods also connects with it’s customers by exuding a sense of social and environmental responsibility, this comes in the form of the Whole Trade guarantee. The Whole Trade Guarantee is essentially Whole Food’s stamp of approval that asserts their products are up to the highest standards of quality in the eyes of the company, its suppliers, shareholders, customers, and the environment. Adoption of the Whole Foods Whole Trade guarantee has allowed Whole Foods to foster a positive image among anyone associated with the company
  • , Extended through 2020, purchase prices are extremely competitiveWhole Foods has been able to maintain a strong relationship with its suppliers. In particular Whole Foods has maintained it’s relationship with the organic food providing giant the United Natural Food Company.Whole Foods has been attempting to implement a system in which it will be able to “buy backwards” in regards to supply. This system allows Whole Foods to utilize it’s self produced, brand name products, (365 Everyday) Utilizing this strategy will allow Whole Foods to decrease its dependence upon suppliers. Have also made a concerted attempt to buy smaller suppliers in order to command their supply lines. Allegro Coffee. Whole Foods has maintained, and increased, its relationships with local suppliers in order to maintain the public perception that Whole Foods is a company that supports naturally produced “home grown” products. Initiatives such as the Project: Local program in the midwest have allowed Whole Foods to reinforce it’s image as a brand name that supports local farmers and industry.xs111
  • Whole Foods focuses on high quality organic and natural products, but there is a perception that they are expensive. Also, studies have shown that consumers are more and more likely to buy private label products, aka store brand products. So Whole Foods has focused on ways to reduce their prices for a portion of their products. Here you see differently named, differently priced brands that end up on Whole Foods’ shelves. 365 Everyday Value is still certified organic, but it is a less expensive option because it is a generic brand that is sourced through Whole Foods’ suppliers. They also have a Whole Foods Market private label brand, which is supplied by Whole Foods-owned facilities. On the right, there are control brands and subsidiaries that Whole Foods owns and controls, but may offer more expensive products. The bottom line: Whole Foods wants to appeal to a wider consumer base who are willing to pay different prices.

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