Whole Foods Inside Move Sets Industry Buzzing

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The big buzz at Expo East in Baltimore was Whole Foods Market and its move under Amazon.com to ban sales reps and outside demo companies from the floor. The changes will start in April and the industry is already bracing for job losses. For many in the industry, Whole Foods is its biggest client and represents up to one third of its business.

Whole Foods executives in Austin will choose a higher percentage of the products stores carry. A closed-door meeting with suppliers and third-party brand reps quickly leaked onto the floor in Baltimore and dominated conversations.

The changes will be discussed next week at the chain’s quarterly meeting in Seattle.

Distributor UNFI has a contract with Whole Foods that runs through 2025, but speculation was rife that Amazon lawyers could undo any contract. Wholesaler Palko Distributing Co. in Michigan City, IN, meanwhile, saw it as a good opportunity as it focuses on local retailers.

Among the open questions:

  • Who will carry out the education of staff that is part and parcel of a sales rep’s duties?
  • Will Whole Foods Market start its own service and charge brands for the privilege?
  • Will independents reap a benefit as smaller niche brands look for a place that will support them?
  • Will Whole Foods lose touch with its local markets?

A Whole Foods spokesperson told the Wall Street Journal the company is still working on its plan to replace the services the third-party companies have provided in stores. One marketing company told the Journal it is laying off half its staff in response to the move.

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