October 27, 2020

Whole Foods founder John Mackeys first grocery store nearly failed because he refused to sell meat, coffee, and sugar

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  • The first Whole Foods Market opened up in 1980 in Austin, Texas.
  • Two years earlier, founder and CEO John Mackey launched a grocery store called Safer Way with a group of cofounders.
  • Safer Way didn’t stock meat, seafood, coffee, or any products with refined sugar. And consumers took a pass on the new health foods store.
  • “We stopped trying to remake the market and started trying to engage the market,” Mackey wrote in his new book “Conscious Leadership.”
  • Even after the pivot away from Safer Way, Whole Foods Market has continued to adapt and change over the decades.
  • Visit Business Insider’s homepage for more stories.

Before there was Whole Foods Market — the grocery behemoth that sold to Amazon for an estimated $13.7 billion in 2017 — there was Safer Way. That was the name of the health foods store in Austin, Texas, that Whole Foods Market founder and CEO John Mackey launched with business partners in 1978.

That initial grocery venture struggled to connect with consumers, Mackey wrote in his new book “Conscious Leadership.” That’s largely because the product assortment at Safer Way represented an “it’s my way or the highway” mentality to food, according to Mackey.

Safer Way’s “young idealist” founders were seeking to “drive forward healthy eating trends” that had taken ahold of society in the 1970s. That meant nixing entire categories of food from the store. Safer Way didn’t sell meat, poultry, seafood, highly refined sugars, or coffee.

“As you might imagine, we weren’t very successful initially, because we weren’t running a business that was adequately engaging a large enough customer base,” Mackey wrote. “It was driven by a higher purpose, but disconnected from the market.”

Whole Foods Market was born when Mackey and his cofounders decided stop letting “a sense of purity overshadow other important concerns” and switch to a more consumer-friendly approach. The early days of Whole Foods Market serve as a key reminder of how much the company has changed over the years. And the topic is especially pertinent given how recent transformations have surprised or even upset the grocery chain’s consumers. 

Customers and employees are currently stewing over a number of changes brought about by Whole Foods’ 2017 sale to Amazon. Workers have complained to Business Insider that Amazon Prime employees are crowding the stores and picking away at inventory. Even as the company’s sales continue to soar, there’s a sense that the grocer’s in-store shopping experience has changed forever.

Whole Foods Market has reinvented itself a number of times over the years, starting with the pivot away from Safer Way. In 1980, Mackey acquired the larger Clarksville Natural Grocery, merged it with the struggling store and created the first ever Whole Foods Market.

To ring in the new store, Mackey and his cofounders put a number of previously “forbidden” products back on the shelves and began selling meat, poultry, seafood, coffee, sugar, beer, wine, and some refined grains. Whole Foods Market still sold natural and organically grown products without artificial colorings, flavorings, or preservatives, with an eye toward catering to customers “looking to eat healthier.”

Mackey wrote that within six months of Whole Foods Market’s opening, the store had the highest total weekly sales of any natural foods store in the US.

Plenty of mergers would follow over the years, as Whole Foods stretched into new markets by acquiring other health foods chains. In 1988, the company opened a location in New Orleans, its first store outside of Texas. Four years later, the grocer went public with a fleet of 12 stores. And in 2017, fears of a takeover bid by activist investors prompted Whole Foods Market to preemptively merge with Amazon.

Mackey addressed the lessons of Safer Way in his new book, advising businesspeople to balance a values-driven “higher calling” with good market sense.

“We stopped trying to remake the market and started trying to engage the market,” he wrote.