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This Is Innovation: Tippling At Whole Foods

Whole Foods CEO John Mackey explains how bars started springing up among the grocer's premium aisles. Hint: It involves organizational structure.

So Whole Foods CEO John Mackey—he of Conscious Capitalism, quasi-mystical self-awareness, and other exhorted enthusiasms—recently sat down with our sister publication Inc. to explore some of his many manifestos.

One such manifesto regards the brand's positioning: Rather than trying to be the cheapest and most efficient (like, he says, other food retailers) "Whole Paycheck," as some of us know it, is going after being the best, which means constantly experimenting. And they can innovate rapidly, he says, because they're so decentralized.

Decentralization leads to innovation. Which, curiously enough, leads to drinking next to the granola display.

Where the bar began

About three years ago the Whole Foods in Santa Rosa, Calif., did something unconventional: They put in a bar in the store. The grocer had always been a spot to grab a bottle to bring home, but never a place to imbibe on-site. And there it was, Mackey says: 16 taps, widescreen television, even chairs.

"(The) first time you think about it, putting a bar in a supermarket seems like a really stupid idea," he told Inc. "It's like 'people don't go to bar in a supermarket, that's crazy.' That's what I would have thought too, until it opened up," he says, "and it exploded."

Soon the bar was doing better business than seafood by just selling beer and a bit of wine. So, like the flu, the idea spread: Pictures and schematics got shipped around, and soon bars were sprouting up everywhere. There are now 75 bars, none of them mandated by Whole Foods HQ.

And from his "incognito" excursions to in-store watering holes, Mackey has found a differentiating factor between a glass at Whole Foods and your nearby dive: security. It can feel claustrophobic if someone's creeping on you in a dimly lit tavern, but in the confines of the premium grocer, weirdo behavior is stymied as thoroughly as your urge to not spend 10 dollars at the salad bar.

Bottom Line: Let ideas bubble up from everywhere in your company—revenue will likely follow.

Watch the original video here.

[Image: Flickr user Harpagornis]

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