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LAS VEGAS — During the 1970s, independent health food stores proliferated — California alone was home to more than 300, said Kevin Wehr, author of “Green Culture.”
But not all survived. One that did was Whole Foods Market Inc., which went on to become the largest natural supermarket chain and the only one with a national footprint.
Whole Foods was founded in Austin, Texas, in 1980 when hippie college dropout John Mackey and three partners merged two 1970s health food chains. Today, the $14.2-billion Whole Foods operates 427 stores, including 18 in Canada and the United Kingdom. The average store size is 41,000 square feet.
Whole Foods is known for natural foods like organic produce and free-range chicken. But the whole success story involves much more. It revolves around co-CEO Mackey, a lifelong vegetarian, yoga practitioner and business strategist.
While other 1970s entrepreneurs were nutrition gurus, many did not understand issues like operations, margin mix or personnel. Few risked carrying perishables, with offerings frequently limited to vitamins, supplements, tofu and whole grains.
At Whole Foods, 66.9 percent of its business is in produce, bakery, meat and prepared foods, according to its annual report. Mackey’s devotion to decentralized store operations and egalitarian worker concepts ensure the functionality, efficiency and open communication needed to manage such volatile categories.
Mackey, 63, is the author of “Conscious Capitalism.” This philosophy incorporates the principles of higher purpose (beyond profit maximization), stakeholder interdependence (rather than shareholder centricity), conscious leadership (instead of command and control), and conscious culture (in place of bottom-line obsession).
Mackey, a prolific speaker and opinionated writer on every topic from non-GMOs to Obamacare, takes this philosophy to heart. In a Nov. 2, 2006 letter to employees, he announced he was reducing his salary to $1 annually, would donate his stock portfolio to charity and establish a $100,000 employee emergency fund.
“I am now 53 and have reached a place in my life where I no longer want to work for money, but simply the joy of the work and to better answer the call to service I feel so clearly in my own heart,” said the letter, which was published by Fast Company (February 2007).
Mackey’s decentralized store operations model empowers team members. This gives them pride and accountability, which drives success.
“Rewarding team members for increases in labor productivity — something they can control — gives them a direct stake in the success of our business,” the annual report stated.