Eco-trend becomes mainstream
Food: Organically produced goods are gaining popularity among consumers in the U.S. Whole Foods, which currently has 183 stores, is driving this trend with innovative marketing methods.
Food Organically produced goods are catching on with consumers in the USA. Whole Foods, which currently has 183 stores, is promoting the trend with innovative marketing methods. Customers say that shopping at Whole Foods is an experience: the apples are so polished that you recognize yourself in them, the cheese is lined up so appetizingly that you can hardly make up your mind, and sometimes the smell of freshly baked white bread wafts through the store. "Experiential marketing", where everything is based on the experience, combined with a holistic lifestyle strategy, is the basis for the success of the American supermarket chain Whole Foods, which is currently giving industry giants such as Wal-Mart and Safeway pause for thought.
"The company has created a mass market for organic products for the nutrition-conscious middle class in the USA," says Bernd Schmitt, marketing professor at New York's Columbia University. "And clearly with experiential marketing, such as focused lighting, through detailed, nutrition-oriented descriptions of the products and through the product range as such."
Even live music and a chocolate fountain into which customers can dip freshly washed fruit have been spotted in some stores. "Whole Foods is really about telling a story, about images, text and ideas that meet customers in their world," says Tim Girvin, brand consultant for international retail companies. "Everything is integrated into that holistic message." Since the end of last year, you can even buy eco-friendly clothing such as eco-jeans and recycled handbags.
The concept is successful: Whole Foods, with its 183 stores, has recorded an average annual growth spurt of around 20 percent in recent years. "The company has established itself in a market niche," says Robb Hecht, marketing professor at New York's Baruch College. "Everyone wants to jump on this wagon at the moment."
The success of Whole Foods is making industry giants, whose business has been stagnating for years, sit up and take notice. Wal-Mart, for example, recently introduced organic products in some stores in order to appeal to new sections of the population. In July, the group also launched an advertising campaign for organic food under the slogan "Introducing Organics at the Wal-Mart price" as part of a broad-based image campaign. The company wants to show that even the usually expensive organic products can be bought at reasonable prices.
Even Safeway, the largest supermarket chain in the US with 1775 stores, opened a "lifestyle store" in Boulder, Colorado, in February, offering not only organic food, but also sushi and freshly roasted nuts. Appetizingly prepared take-away meals are also sold, a strategy that Whole Foods has perfected, bringing in around ten percent of its sales. It remains to be seen how customers will react.
"I don't think Wal-Mart or Safeway will be able to copy the emotional experience character of Whole Foods' brand identity," believes Andreas Back, Partner at the marketing consulting company Prophet in Hamburg, who worked in the USA for several years and has become an avowed Whole Foods fan. "Their stores just don't exude that feel-good experience, they can only take a leaf out of their book."
Whole Foods spends relatively little money on advertising campaigns or even the coupons that are so popular in the USA. The advertising budget is usually less than one percent of its turnover. "Whole Foods doesn't need to play the discount game," says Hecht. "It's all about customer loyalty and word-of-mouth." This customer loyalty is also generated by the fact that Whole Foods mainly hires employees who are interested in the organic concept and are able to provide customers with expert advice.
In addition, the employees receive a higher salary than the minimum wage that is often customary in the industry - an aspect that has become an image problem for Wal-Mart in particular, but has triggered a positive reaction in the local media for Whole Foods. "The competition pays less attention to team building," says Hecht. "At Whole Foods, employees are given the feeling that there is no hierarchy, which creates this sense of camaraderie."
Jump to EuropeWhole Foods began in 1980 with a lone store in Austin, Texas, and was an instant hit with customers. Mackey was one of the co-founders. The company expanded nationwide over the years, often through acquisitions and mergers with smaller organic chains - a strategy that has now been applied internationally for the first time. Last year, Whole Foods ventured into Europe by acquiring the British luxury chain "Fresh & Wild". The company plans to open 75 new stores in the UK over the next few years.
For Mackey, the principle of environmental sustainability also includes cooperation with local companies. The recent initiative to stop selling live lobsters at Wohle Foods also made headlines. "All crustaceans, including lobsters and crabs, appear to have some degree of consciousness, sensitivity to pain and the ability to learn," reads a press release. Many suppliers keep the animals for weeks in overcrowded tanks, which does not meet Whole Foods' standards of "humane treatment". Conveniently, this is also good for the company's image.
"Whole Foods makes you feel like you're a good person when you shop there, and that's important to Americans," says PR consultant Christine Hohlbaum. "The concept of humane animal husbandry fits in perfectly with this."
Gerti Schön
"The company has created a mass market for organic products for the nutrition-conscious middle class in the USA," says Bernd Schmitt, marketing professor at New York's Columbia University. "And clearly with experiential marketing, such as focused lighting, through detailed, nutrition-oriented descriptions of the products and through the product range as such."
Even live music and a chocolate fountain into which customers can dip freshly washed fruit have been spotted in some stores. "Whole Foods is really about telling a story, about images, text and ideas that meet customers in their world," says Tim Girvin, brand consultant for international retail companies. "Everything is integrated into that holistic message." Since the end of last year, you can even buy eco-friendly clothing such as eco-jeans and recycled handbags.
The concept is successful: Whole Foods, with its 183 stores, has recorded an average annual growth spurt of around 20 percent in recent years. "The company has established itself in a market niche," says Robb Hecht, marketing professor at New York's Baruch College. "Everyone wants to jump on this wagon at the moment."
The success of Whole Foods is making industry giants, whose business has been stagnating for years, sit up and take notice. Wal-Mart, for example, recently introduced organic products in some stores in order to appeal to new sections of the population. In July, the group also launched an advertising campaign for organic food under the slogan "Introducing Organics at the Wal-Mart price" as part of a broad-based image campaign. The company wants to show that even the usually expensive organic products can be bought at reasonable prices.
Even Safeway, the largest supermarket chain in the US with 1775 stores, opened a "lifestyle store" in Boulder, Colorado, in February, offering not only organic food, but also sushi and freshly roasted nuts. Appetizingly prepared take-away meals are also sold, a strategy that Whole Foods has perfected, bringing in around ten percent of its sales. It remains to be seen how customers will react.
"I don't think Wal-Mart or Safeway will be able to copy the emotional experience character of Whole Foods' brand identity," believes Andreas Back, Partner at the marketing consulting company Prophet in Hamburg, who worked in the USA for several years and has become an avowed Whole Foods fan. "Their stores just don't exude that feel-good experience, they can only take a leaf out of their book."
Whole Foods spends relatively little money on advertising campaigns or even the coupons that are so popular in the USA. The advertising budget is usually less than one percent of its turnover. "Whole Foods doesn't need to play the discount game," says Hecht. "It's all about customer loyalty and word-of-mouth." This customer loyalty is also generated by the fact that Whole Foods mainly hires employees who are interested in the organic concept and are able to provide customers with expert advice.
In addition, the employees receive a higher salary than the minimum wage that is often customary in the industry - an aspect that has become an image problem for Wal-Mart in particular, but has triggered a positive reaction in the local media for Whole Foods. "The competition pays less attention to team building," says Hecht. "At Whole Foods, employees are given the feeling that there is no hierarchy, which creates this sense of camaraderie."
Jump to EuropeWhole Foods began in 1980 with a lone store in Austin, Texas, and was an instant hit with customers. Mackey was one of the co-founders. The company expanded nationwide over the years, often through acquisitions and mergers with smaller organic chains - a strategy that has now been applied internationally for the first time. Last year, Whole Foods ventured into Europe by acquiring the British luxury chain "Fresh & Wild". The company plans to open 75 new stores in the UK over the next few years.
For Mackey, the principle of environmental sustainability also includes cooperation with local companies. The recent initiative to stop selling live lobsters at Wohle Foods also made headlines. "All crustaceans, including lobsters and crabs, appear to have some degree of consciousness, sensitivity to pain and the ability to learn," reads a press release. Many suppliers keep the animals for weeks in overcrowded tanks, which does not meet Whole Foods' standards of "humane treatment". Conveniently, this is also good for the company's image.
"Whole Foods makes you feel like you're a good person when you shop there, and that's important to Americans," says PR consultant Christine Hohlbaum. "The concept of humane animal husbandry fits in perfectly with this."
Gerti Schön
