Report: Amazon Product Ideas Clash With Whole Foods Markets Standards

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Whole Foods Market
A display of soda cartons spelled out the word "Metuchen" when Whole Foods Market opened there last fall. But not Coca-Cola. (Photo by Laurie Petersen)

Austin, TX – As Amazon takes a more prominent stake in merchandising at Whole Foods Market six months in, a report from Yahoo Finance says it is pressing for more mainstream products such as Coca-Cola, in clear conflict with the company’s current standards for the type of foods it will carry.

Internal debate is growing, according to the report. When asked if  “consumer packaged goods like Coca-Cola” will be sold, spokesperson Brooke Buchanan told Yahoo Finance, “As you know, we have really high-quality standards, and those products that you just mentioned don’t meet those quality standards. If there were new products that actually do meet our quality standards, then there’s always that consideration.”

Responding to WholeFoods Magazine’s coverage, Buchanan stated, “Working together with Amazon has allowed us to lower some prices and bring our natural and organic food to more people, without compromising our industry-leading quality standards. While our culture will naturally evolve, the fundamentals of Whole Foods Market – our high quality standards and our Team Members’ passion, spirit of innovation, philanthropy and commitment to exceptional customer experience – will always be part of who we are and how we do business.”

Amazon refused to comment.

The news is not a complete surprise. Corinne Shindelar, executive director of the Independent Natural Food Retailers Association, had said from the time of the deal’s announcement that what Amazon might turn Whole Foods Market into effectively eliminated it from the field as a natural and organic store. Already, electronics have been added, prices have been cut for Amazon Prime members, and free two-hour home delivery introduced in selected markets.

The retailer has caught flak as far back as 2009 for carrying products that are not exactly organic – candy, for example, with CEO John Mackey acknowledging it.

Still, taking in a product that symbolizes as far as you can get on the scale from natural and organic could hasten the erosion of the brand. (Coke did introduce a competition inviting people to come up with a good-tasting natural sweetener.)

“Whole Foods has proved a specialty retailer focusing only on organic food can’t scale and be profitable,” Brittain Ladd, a retail and supply chain consultant, told Yahoo Finance. “Amazon doesn’t want to maintain the status quo. They can’t see people go elsewhere simply because these highly-popular products are not available in Whole Foods.”

“It’s painful, but Whole Foods needs to be put out of the comfort zone,” Neil Saunders, managing director of GlobalData Retail told Yahoo Finance. “There are retailers that can provide high-quality organic food while offer packaged goods, and Amazon is helping Whole Foods in that direction.”

Jay Jacobowitz, founder and president of Retail Insights, agrees.  Regarding the addition of Coke to Whole Foods’ shelves, he says, “How about let’s change the name of the store from Amazon Whole Foods to what it really will shortly be: Amazon All Foods.

“In order to scale, which Amazon must in order to succeed, it has to satisfy all those middle-of-the-road U.S. households that, yes, want their Whole Foods 365 Everyday Value products on their free delivery Amazon Prime orders, but they also want Coke and Pepsi. Amazon can’t buy, say Supervalu, just to offer those products.”

WholeFoods Magazine (which is not affiliated with Whole Foods Market), speculated that tensions could mount in a cover story last December naming Jeff Bezos its Person of the Year.

Updated March 7, 2018, 3:08 PM

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