Wednesday, May 24, 2017

"Whole Foods Would Look a Lot Different If It Were Science-Based" (WFM)

After flatlining around $30 since late 2015 the stock seems to have been anticipating something the last six weeks:
From New York Magazine's Science of Us:
Whole Foods used to be my idea of grocery heaven. Once upon a time, I shopped at the California Street location in San Francisco — it was light and airy with produce for miles. I knew the cheesemonger. I had philosophical conversations with the butcher. I stared longingly at the Le Creuset bakeware. The soap aisle smelled like lavender. Heaven.

But eventually, I fell out of love. Or, to be more specific, I changed my mind about organic food after reading the research: It turns out organic isn’t more nutritious or even necessarily better for the planet. So I pretty much stopped shopping at Whole Foods altogether.

I’m not the only one. Whole Foods may have once revolutionized the organic-food industry, but it’s no longer the only game in town. These days, many consumers are now buying their organic groceries at less expensive stores, including Costco and Walmart. Whole Foods’ sales are on the decline, driving many observers and even their own investors to suggest that in order to survive, the chain has to make a drastic change.

Well. I have a suggestion as to what that change might be. It’s pretty drastic, but, hear me out, Whole Foods. This could be good for both of us. Here it is: Why not revolutionize grocery shopping all over again? Only this time, the revolution should be powered by science and agronomy, and not misleading marketing.

Here’s my first problem. Labels like “organic” and “conventional” are too broad, and too black and white, to really be all that helpful. A more specific, more informative approach could fix this: If Whole Foods listed all of the pesticides used on every fruit and vegetable, whether natural or synthetic, consumers might begin to understand that both conventional and organic produce are grown with pesticides, and what matters more is the toxicity of the pesticide used. Copper sulfate, for example, a pesticide allowed in organic produce in the U.S., is more toxic than some conventional pesticides.
Chlorpyrifos, an insecticide used in conventional agriculture, is more toxic than glyphosate, the active ingredient in the herbicide Roundup. It’s worth noting that Whole Foods took a step in this direction once before with its Responsibly Grown program, which recognized that conventional produce can be more sustainable than organic, but organic farmers loudly objected and the company eventually undercut those standards. It’s time to bring them back.

This new science-based labeling system should also make it crystal clear that trace pesticide residues aren’t dangerous for consumers — as long as the residues measure below the tolerance levels set by the U.S. Environmental Protection Agency (and they do, year after year), then they aren’t a cause for concern. If there is a concern about a pesticide’s toxicity, it’s the health risk to farm workers and their families, and that’s something to consider before buying those perfect-looking strawberries.
We’ll also want to know the pesticide’s environmental impact, like how it affects the bees or the surrounding water supply. Many people believe pesticides alone are killing off the country’s bee population, but if you dig a little deeper, you discover that pesticides aren’t actually the biggest culprit. Iida Ruishalme, a biologist who writes the blog Thoughtscapism, has published several in-depth posts examining the different hazards to bee health. She says even though “neonicotinoid [pesticides] steal most of the thunder,” there are graver threats to be concerned with: “The Varroa mite, disease, habitat loss, and invasive species (such as the European honey bee itself) play a far greater role.”

But pesticides are only one piece of the broader sustainability puzzle. Consumers should also be able to know whether the farmer who grew their produce uses practices like cover-cropping and conservation tillage, two things that improve soil health and mitigate the impact of climate change by increasing the sequestration of carbon in the soil. Both organic and conventional farmers can and do incorporate these methods....MUCH MORE
It won't happen of course. Here's Bloomberg on one of the reasons why: 

The Future of Whole Foods Isn’t About Groceries
  • CEO Mackey tries to boost profits without losing brand cachet
  • Wall Street grows restless after almost two-year sales slump
Inside the Whole Foods Market in midtown Manhattan at lunchtime, it’s easy to forget that the organic supermarket chain is suffering its biggest crisis since going public in 1992.

A line 20-people deep waits at a juice and espresso bar near the bustling store entrance across from Bryant Park. In the food hall upstairs, the tables are packed with customers noshing on superfood salads and sushi. Too harried to stop for oysters, many shoppers order Nashville-style fried chicken sandwiches from digital kiosks and sample cold brew from Stumptown Coffee Roasters.

Whole Foods Market Inc., facing pressure from restless shareholders after nearly two years of sliding sales, still has cachet in New York and other pockets of the U.S. That unique foodie appeal is key to a turnaround if Chief Executive Officer John Mackey is able to improve operations, said Charles Kantor, a managing director at Neuberger Berman, one of the grocery chain’s 10 biggest investors. 
“He got all the hard things right over the years, but he didn’t get the easy stuff right,” Kantor said. “There hasn’t been laserlike focus in a long time.”

As grocers fight for traffic amid an intense price war and the threat of e-commerce, Whole Foods stands out among its peers with its prepared foods and in-house restaurants that make its stores destinations. The challenge for Mackey, who co-founded the company in 1980, is how to assuage Wall Street by boosting profits without ruining what made Whole Foods wildly popular in the first place.

“They have to do two things at the same time that are diametrically opposed,” said Roger Davidson, a former Wal-Mart grocery executive who works as a consultant. “They have to make sure they don’t dumb it down.”

Brand Loyalty
The hubbub at newer Whole Foods locations like the one in midtown Manhattan illustrates a brand loyalty that most retailers would envy, especially when brick-and-mortar stores are closing at a record pace. Neuberger Berman increased its stake in the company in 2015 because of its rare ability to “connect in an emotional way” with shoppers, said Kantor. The firm owns about 2.7 percent of Whole Foods shares, according to data compiled by Bloomberg....MUCH MORE