Long before Apple created boutique computer stores that make customers drool, Whole Foods Market was opening grocery stores that made food shopping a mouth-watering adventure.
Part of Whole Foods' success, part of its style, is to constantly up the bar in terms of the kinds of foods it offers, how it presents that food, and what it tells you about how the food got to the store. Sometimes that leadership transforms the world. In 2007, Whole Foods' first London store rolled out an experimental "animal welfare" rating system—every animal product for sale is rated from 1 to 5, based on how the animals were raised; the system will be rolled out across the company in 2008. Whole Foods introduced an intricate internal concept called "Whole Trade," inspired by the fair trade movement, to certify that products it sells from developing nations are produced in economically and environmentally sustainable ways. And the company just announced that it will eliminate use of plastic bags at every one of its 265 stores this spring.
John Mackey, the CEO who got spanked for posting anonymous messages on financial message boards, started 2007 by announcing that he had earned enough money, and he permanently reduced his annual compensation to $1. Of course, sometimes their leadership verges on the silly. For instance, there is the push into ultra-luxury whole food exemplified by "butter bars," where customers can have their butters custom-mixed with special herbs and salts. Whole Foods' newest New York City store features not just a splendid cheese department, but a special on-site "cheese aging cave," a climate controlled room to maintain fine cheeses at optimal temperature.
Perhaps the most innovative Whole Foods effort of 2007—the one that could have the biggest impact, but has gotten the least attention—is a loan program for its food suppliers. The company, which will pass $7 billion in sales this year, created a pool of $10 million per year to provide low-interest loans specifically to small, local food producers, to encourage the local agricultural movement. In 2007, Whole Foods loaned money to two dozen small companies, but still only managed to make about $1 million in loans. The company is so eager to have suppliers take advantage of the loans, it has made the seven-page loan application available online.