Tuesday, October 30, 2007

The Whole Foods behemoth?

I'd heard of the issue of Whole Foods wanting to buy Wild Oats and how the FTC was asked if this was proper.

The link above is an article trying to point out that the FTC shouldn't necessarily look at the effect of the merger on the consumers, but on the suppliers. While that's a fair question, I think it conflates two issues: supporting local (small) suppliers, and building the business.

First, the grist article correctly points out that other, large, supermarkets are opening up their own lines of organic produce/food, and Whole Foods now competes against that. (this is the building the business issue)

Second, the article suggests that Whole Foods will likely turn away from small suppliers and try to "rationalize its supplier base." (this is the supporting local (small) suppliers)

Second point first. While "rationalization" of supplier base has traditionally happened, Whole Foods does seem dedicated to keeping local suppliers involved. See the open letters between Whole Foods and Michael Pollan: one, two, three. Sure, there's no guarantee, but it appears Whole Foods has made an honest effort to bring local suppliers into their stores.

Back to the first point: The argument made here is essentially: "well, Whole Foods used to be good, now they're going to become corporate, and that's bad." grist lets the other super markets (Kroger, Safeway, Wal-Mart) pass on involving local suppliers, but wants to tie the hands of Whole Foods. Sounds like it would just give the other super markets a (potential) edge over Whole Foods which, in the long run, could hurt the chain.

I'm all in favor of supporting local suppliers, in fact, my family buys over 95% of our produce from the local food co-op (http://www.firstalt.coop) or directly from the farmers (through the market or CSA).

Tilting the playing field to burden a single chain seems unfair, and in the long run doesn't directly address the issues raised.

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