The Whole Foods Market co-chief executive on his plan to get his company out of a downturn, his penchant for being frank and his belief in capitalism with a cause
“I’m not Harry Potter,” says Whole Foods Market co-chief executive John Mackey, “and I don’t have a magic wand.” He is sitting in his company’s sprawling Austin, Texas, headquarters talking about the challenges facing his struggling grocery chain, whose stock fell 33% in 2015. It’s down 8% so far this year.
Mr. Mackey, 62, hopes to turn things around. To that end, his company has announced a nine-point plan—including more promotional discounts in its stores and a new, less-expensive spinoff chain called 365 by Whole Foods Market—and has restructured to reduce costs. Last fall, Whole Foods cut 1,500 jobs.
With 437 stores around the country and sales last year of $15.4 billion, the company has gone through a serious downturn because of increased competition in the market for natural and organic foods. Sales slowed last year after New York City officials claimed that the company overcharged customers for freshly packaged foods. (Whole Foods apologized, saying that it was an inadvertent error, and retrained its employees.) On top of that, the company has had to combat its reputation for high prices, with items like emu eggs selling for $35 each.
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For his part, Mr. Mackey remains an energetic advocate of the company’s mission. Next winter, he’s coming out with a book called “The Whole Foods Diet,” preaching his philosophy of eating 90% plant-based foods. And he’s no stranger to controversy. In the past few years, he has been outspoken about a range of issues, with views that at times might seem surprising for the chief of a grocery chain with a progressive image. He has likened unions to herpes (“it doesn’t kill you, but it’s unpleasant and inconvenient”), said that the Affordable Care Act is “like fascism” and called climate change “perfectly natural and not necessarily bad.”
“I tend to be a very candid person,” he says. That blunt manner, he says, has created a culture of frank feedback throughout the organization. Yet deciding what he will say publicly has become a balancing act. “I obviously want to be honest and not deceive people, but at the same time I don’t want to hurt Whole Foods Market,” he says. “I’m happy to express my views to people in private but because I’m the co-founder of the company…people make a very close identification between Whole Foods and me. It might not be fair, but it’s just reality.”
One belief that he hasn’t tempered is his idea of “conscious capitalism”—mixing business with a higher purpose. (He co-wrote a book of that title in 2013.) In his company’s case, the cause is eating better and living more healthily.
In this election year, Mr. Mackey thinks that it is especially important to emphasize the transformative impact of capitalism itself. “It has literally lifted humanity out of the dirt,” he says. It is “this amazing system that’s benefited us so much, but it’s under constant attack.”
Although the price of organic food has dropped in the past two decades, Mr. Mackey thinks that it is still too expensive. That’s one reason Whole Foods plans to launch the more value-oriented 365 stores, which will have a more limited range of options of natural and organic foods. “Instead of having 30 kinds of salsa you’ll find just a few and they’ll be low priced,” he says. The first store will open in Los Angeles in May, with another nine expected by October 2017 in such cities as Lake Oswego, Ore., and Bellevue, Wash.
He hopes that a less-expensive chain will help to spur Americans to eat more healthy foods. According to the Centers for Disease Control and Prevention, 13.1% of Americans said that they ate the recommended amount of fruit a day in 2013; 8.9% said that they ate the recommended amount of vegetables. (The standard recommendation is 1½ to 2 cups of fruit and 2 to 3 cups of vegetables a day for adults who engage in less than 30 minutes of moderate physical activity a day.)
Mr. Mackey grew up in Houston. Soon after dropping out of college (he went back and forth between the University of Texas at Austin and Trinity University in San Antonio), he and his then-girlfriend, Renee Lawson Hardy, started a health-food store called Safer Way. It eventually merged with another store, and together, they became Whole Foods Market in 1980. Mr. Mackey has served as CEO since then; in 2010, Walter Robb, Whole Foods’ former chief operating officer and co-president, joined him as co-CEO.
Today, Mr. Mackey lives in Austin with his wife, Deborah. He says that he has one regret. “Now I look back on my life and I think: You know what, I’m older now and I kind of wish I’d had children,” he says.
He says that he has never been bashful about expressing his opinions and perspectives. “No one’s called me laid back,” he says. “By the time I was 19 or 20 years old, I was studying philosophy and religion in college…and I got really clear at a very young age about death.” The realization that each of us has a limited amount of time made him think about what really mattered to him.
“From that point onward I said: I’m not going to do what other people want me to do,” he remembers. “I’m going to do what I want to do…and it worked out well for me.”
Date: February 19, 2016