A shake-up in the way suppliers to Whole Foods Market sells and promotes products could lead to smaller, local brands being squeezed out as part of a ‘coventionalization’ process launched by new owner Amazon, industry insiders fear.
A recent story by the Wall Street Journal highlighted changes at 470 Whole Foods stores planned for April 2018, which would reportedly end the ability of brand representatives and marketers to check that products are stocked and displayed properly, and likely phase out in-store promotions by smaller brands.
The Wall Street Journal said that Whole Foods is increasingly centralizing its buying activity, with listings more likely in future to be decided at Whole Foods’ head office in Austin, Texas. Until now local store managers have exerted considerable influence on the inventory of their own store.
“This is another step in the conventionalizing of Whole Foods as we know it,” Jim Cusson, from brand consultancy, Theory House, told the WSJ.
Jay Jacobowitz, president of natural products industry consultany, Retail Insights, continued the theme. He added: “This is a major inflection point. The product mix at Whole Foods will shrink and niche lines will trickle out to other grocers.”
Some industry insiders fear that a ‘conventionalization’ of Whole Foods would pose a significant threat to specialist product, which require more knowledge and ‘active selling’ from store staff. But others see an upside – opportunities for other, smaller natural food retailers and independents to regain exclusive access to popular specialist products.
For its part, Whole Foods, insists that streamlining of buying policy will be done in a way that protects a diversity of products and brands. “Local suppliers and products are crucial to the success of the company,” a company spokesperson said.