Market Research paper :Whole Foods Market

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Executive Summary

The 1990s saw the advent of the organic food preferences among the choice food options available to various consumers Ever since the demand for organically grown wholesome foods became apparent, Whole Foods Market Inc. was the first to respond to this demand generation and began from a single outlet and steadily grew to 175 stores in the year 2005 with an employee strength of 38,000 employees.

Report Introduction

The success of one venture was a motivating factor for other players to explore the market. The popularity of the movement for Health consciousness which was increasingly picking up momentum across the continent gave further impetus to the popularity of health foods in the market. More and more retail space was being devoted to natural and organically produced crops and their products. Gradual increase of organic sales went up from 10% to 50%.

Strategic Analysis

Sentiments of Health consciousness, giving back to society some part of one’s contribution and the creation of an environment of the catchword LOHAS which was an acronym for ‘Lifestyles of Health and Sustainability’ with the passage of time and greater awareness on the part of the consumers there was observed the need to give a repeated preference for organic, natural, health foods.

There were certain issues that came to the fore with the changed circumstances regarding the newer preferences in food and healthy eatingThe significant issues were:

i).Certification: Whereas earlier there had been no need for certification of a particular product as being truly organic or not. As more and more land came under the cultivation of organic food products.  Certain specific bodies were designated for the creation of the requisite parameters for certifying a particular product as truly organic or not. Thus a crop could be considered purely organic if the entire process of growing that particular crop was totally under controlled circumstances. The sowing to harvesting of that particular crop would have been totally under natural processes without the use of chemicals at any stage whether it was the use of fertilizers or weedicides and pesticides. There are currently several internationally renowned organizations that have been accredited with the responsibility of giving authentication through certifying a product as being purely natural and organic. They are spread all over Europe, US.

ii).Growing Competition: Several other food production companies also emerged ones time to come up with their own range of products. Though the lines and range of products was diverse, the basic premise was the propagation of organic foods grown naturally and in the absence of all chemical and artificial additives. 

iii).Informed Choices: A greater consciousness of healthy eating was creating a more aware society that enquired about the foods they were buying and eating. Besides there was more aggressive demanding for particular food stuffs and edible products. 

They were willing to pay more for the genuine products. The family food basket and its allied budget changed more than the healthy eating lifestyle. Producer companies went all out to educate the consumers to make the necessary choices when it came to buying particular food products. 

iv).Influential Trends: Most of the consumers who had sworn to eating only organic food were belonging to what popularly had come to be known as the ‘Core Group’ while those who were slowly turning over to organic from their normally accepted diet. These were the centrally placed consumers. A third group of consumers that was apparent can be designated the ‘Periphery Group’. These are people who are still coming to know about organic products and gradually experimenting with them. There is a great potential within this group for the consumer oriented market. Companies tend to explore the dimensions of consumer activity for various products in this particular bracket of clientele. 

v).Branding: Organic has come to be recognized as a master brand all over the world. Any product that is natural, organic, eco-friendly and totally free from the poisons of chemicals is the preferred choice of a well informed public. The clientele is highly specific. They know their minds and would be satisfied only if they get the particular product that is required by them at any given time. 

Summary of External and Internal Analysis 

There are several companies that came up over the years to give a challenge to Whole Foods Market but they could not achieve as a big a name for themselves nor claim as big a slice of the business share. Discussion them one by one:

The ‘Wild Oats’ groups started alongside in the 90s and posed intense rivalry with the Whole Foods group square foot for square foot customer for customer literally. However, after a decade of struggle the wild oats had to give way to the mightier giant in wholesome food habits. Then there was the era of ‘Trader Joes’ who promised to their customers the best in food and beverages. Their privately labeled products were plummeted into the market in a way that they took up about 80% of the sales. But they also could not sustain themselves for long and were soon ousted by H.E. Butt of HEB. It was introduced in Austin, Texas and constructed on the European model of an open market having a deli, a baker’s outlet, a grocery shop, a butcher’s outlet and also an ice-cream soda and juice bar. Their bye-line was fresh gourmet food rather than the standardized raga of natural foods. Alongside these retail outlets there came the leading discount giant warehouse Costco. During its boom time in 2005 it began procuring and selling organic products at prices lesser than what was the going market rate. Needless to say it could not be a relationship that could last for long which is why the wholesale of organic food became a mere misnomer. In 2005 Kroger made its appearance in the natural foods bracket and has become probably the biggest retailer of its own brand of premium quality natural foods. The last one to enter the market is Wegman’s which, however, had only a presence in the New England area. It had developed on the lines of the European-style open-air markets with terrazzo floors and open ceilings. 

While each of the companies bringing in the natural foods bracket had some or the other plus and negative points attached to it, the Whole Foods have held sway over the American dietary scenario for more than three decades and are well on their way to have established themselves as an essential part of the food intake of Americans and other populations the world over. 

Works Cited

Blair, Robert. in Organic Production and Food Quality: A Down to Earth Analysis. Oxford, UK, Wiley-Blackwell, 2012.

Bourn, D. and Prescott, J. “A Comparison of the Nutritional Value, Sensory Qualities and Food   Safety of Organically and Conventionally Produced Foods”.  Critical Review of Food           Science Nutrition, 42 (1) 2002.

Magkos, F. et al in Organic food: Buying more Safety or just Peace of Mind? A Critical Review  of the Literature. Critical Review of Food Science Nutrition, 46 (1) 2006.

Smith-Spangler, C. et al. in “Are Organic Foods Safer or Healthier than Conventional       Alternatives”. Annals of Internal Medicine 157. (5). 2012#

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