Whole Foods CEO on The Future of Food: More Than Taste (#237)

We all are increasingly shopping online.

So why did Amazon spend nearly $14 billion, by far the most it's ever spent on any acquisition, to buy Whole Foods, a brick-and-mortar national grocery chain?

And how are the foods we eat changing, and how do the food choices we make affect the environment? Hi, everyone. I'm Lynn Thoman, and this is Three Takeaways.
On Three Takeaways, I talk with some of the world's best thinkers, business leaders, writers, politicians, newsmakers, and scientists. Each episode ends with three key takeaways to help us understand the world and maybe even ourselves a little better.
Today, I'm excited to be with Jason Buegel, the CEO of Whole Foods, which is the first and only certified organic national grocery store in the United States. Jason has been at Whole Foods for over 10 years, taking over from Whole Foods' amazing co-founder, John Mackey, who's also been a guest on Three Takeaways.
Jason was there when Amazon bought Whole Foods in 2017. I'm excited to learn from Jason how people's food choices are changing, how the food choices people make affect the environment, and what the grocery store of the future looks like.
Welcome, Jason, and thanks so much for joining Three Takeaways today. Hi, Lynn.
Happy to be here today to talk to you. It is my pleasure.
Are people eating differently now? And if so, how? Yeah, I would say consumers compared to probably any other point in history, care more about not only what they're eating, but how their food was produced and what has happened upstream throughout the entire supply chain. And there's more awareness to what food does for individuals and their bodies than we've ever had before.
And this momentum, I think, is going to continue to change as we go forward. I think we have sort of two polarities that go on.
We've got a lot of folks who may not be eating the best foods and are having a lot of processed foods, but it's folks as far as customers who really understand the impact, they're really seeking out what is best for them, their bodies, as well as making decisions for what's right for their families. And we bring that transparency to our customers.
We're very clear about the ingredients, the over 550 ingredients that we ban from the products that we carry in our stores. Our products are grown and produced to the animal welfare or the sustainable seafood sourcing that's taking place.
This point of history, we're probably in the best position for having awareness and folks caring about what they're consuming. What should people understand about their food choices and their impact? What is it that they don't realize yet? Well, I think for many individuals, this comes down to what is important for them.
And so in some cases, you've got individuals who are looking for special diets that might tie to their own personal preferences around an outcome that they're looking to achieve. Or it could be a dietary restriction.
It could be on the impact that what they're eating is having related to the environment or how it might impact animal welfare. And so I look at food as something that it's really personal for an individual and the different ethos and the buying decisions are going to be different for every single consumer.
And I think what complexifies that is when you look at a household, oftentimes there's multiple decision points that have to come together. So there's many different special diets.
So there might be a dietary restriction and you might have some individuals who are on a diet to achieve an outcome like losing weight, as an example.

Ultimately, it's being able to bring together the information that you can have to help make those choices either as an individual or as a household. And I think we're in a spot right now where not only do we have the greatest transparency, but we have so many different digital ways that consumers can help process some of this information and be able to have the understanding around what they're eating and what outcomes may come or understand the impact that's happening at a macro level based upon the decisions of what they're buying.
And so for folks that really care about animal welfare standards, understanding the differences between actions that are taking place. If you take, for example, eggs, what happens when there's cage-free or pasture-based processes in place versus a more industrialized facility? And what's the impact that's having to that chicken through the process? The same thing could take place as it relates for products that are being grown in fields

today. The difference of what's happening with organic and regenerative and what's happening with the environment and the biodiversity that's taking place there versus what might be happening in a more industrialized farming practice.
I'm glad that you made it more concrete. So what happens when somebody either buys or orders in a restaurant chicken breast meat? What's the impact? Well, I think the impact depends upon how that product was produced and grown.
And so in the case of a chicken breast, and this is a great example. Recently I had a chance to visit last year one of our suppliers, Bell and Evans, and being able to see firsthand the differentiation that they put into place and the care that they have for their chickens through the entire life cycle versus what would happen in a more industrialized production plant.
And so seeing this happy chicken through its very birth, through the entire supply chain process, and then seeing the quality of the product that gets to the consumer, there's a difference. There's a difference in the taste and there's a difference in that bird's life and all of the different steps that have taken place throughout the supply chain.
And so I think as consumers have more information around what is that differentiation, how was that product grown? How was it produced? You have a better understanding of what that impact is. And I would say also different customers have different inputs that are important to them.
It might be, what is the carbon footprint as an example that was taken for this particular product? Or was it using sustainable seafood sourcing practices and helping protect our waterways? And so I think every product tells sort of a story of what that impact is to their surrounding stakeholders. Increasingly, as you mentioned, people want to know how their food is sourced, how the animals are treated.
Do you only work with suppliers that meet certain standards? And if so, what are those standards? Great question. One of our top differentiators as Whole Foods Market is the products that we carry and the quality standards that we have in place.
I mentioned a little bit earlier the ingredients that we banned, and that's sort of like the first step in the process. So a supplier has to meet our requirements of not carrying those particular products.
The second step is we have, based upon the category, other criteria that comes into place. And so within our meat standards, ultimately animal welfare is really important.
And so we have something that we use. It's a third-party system called GAP that has different steps in place.
And our suppliers have to meet those requirements to

ultimately have their product certified at a particular step. We have a sustainable seafood

sourcing practices where, again, it has to be certified by a third party. One of the things

I'm really proud of that we've put into place with produce is a new pollinator protection policy.

And for us, it was really trying to help ensure that we are supporting pollinator health and looking at pest management controls within the produce space. And so in different categories, we have different requirements.
And the way I like to think about it is we do the homework for our customers so they don't have to. I take things like cage-free.

We were one of the key drivers of helping change that within our industry.

And the other thing I'm proud of is we have our base standards that are in place, but throughout the entire store, you're going to see areas where we elevate the standard

even further. In the case of eggs, the work that we've done with a number of our partners,

including Vital Farms, who's based here in Austin as well, in what's happened in pasture raised. And the work that we do through our Source for Good program, which is something that we're proud of.
We certify products where we started in produce, where the products are good for the environment, they're good for the communities they are grown in, and they're good for the workers as well. So we actually take a look at the working conditions as well and try to say, how do we elevate the bar in those areas? And so this is another way that we can work with our suppliers, not just on achieving what we'd say is the bare minimum or the floor, but ways that we can further differentiate and allow customers to choose in and say, these are products I want to buy based upon attributes that are important for me.
I have to tell you, I always purchase your Vital Farms eggs. They taste different.
They taste better, actually. I fully agree.
And I was just making some eggs with some family members over Christmas holidays, and I was using Vital Farms eggs and I get the call out that folks absolutely can taste the difference. Yes.
And are farmers incentivized to support what's good for people or what's good for animals or what's good for the planet? I believe so. Many of the suppliers that I've had a chance to talk to in this space, one, we pay premiums

for many of these products.

One of the things that we want to be able to do is showcase the value and the work that's

gone into this.

And ultimately, there's a premium that comes along for these products.

And part of our transparency is making sure that customers understand that work that goes

into making sure that animals have been taken care of, the workers have been taken care of, the community has been taken care of, the environment has been taken care of. These regenerative practices have been done.
These organic practices have been done. And so whatever the criteria it is, there's a premium that the farmers and producers are getting for these products.
At the same time, there's a lot of other wins that come into place as well. So talking to so many suppliers where they're able to eliminate and reduce the fertilizer that they need to, to the extra work that has to go into maintaining their acreage, to the work that they're having to do in upkeep and maintenance.
When you can do things that are great for the environment and great for the community and your workers, you can create an ecosystem where stakeholders together can sort of win. One of the things that I get excited about as Whole Foods is we try to find these win-win-win solutions.
So it doesn't have to be for a customer to win on value. All of these other stakeholders have to lose.
Plastic contamination seems to be pervasive. Even trusted brands and organic foods are not immune.
Newsweek just published an article on a new study which found that well-known brands like McDonald's, Burger King, and Starbucks were all found to have products with high levels of

microplastic contamination. And the products with high plastic levels range from cheeseburgers

to milkshakes to kitchen staples like salt and even to organic products. And there was even

one kind of Whole Foods organic rice. What are your thoughts? Plastics, as well as just packaging in general, is something that has been a big focus for us in helping reduce not only the waste, but some of what can be the harmful or perceived harmful impacts to consumers as well.
One of the things that we've been trying to do is look at ways by which we can

reduce plastics across the supply chain. I think one of the tricky parts that we have here is in general, customers say they want less of it.
Yet, when you bring offerings to the marketplace, they're not always deciding that they want to purchase those. I'll give a real concrete example.
We worked with a supplier in basically helping reduce nearly all of the plastic in packaged

sacks. deciding that they want to purchase those.
And I'll give a real concrete example. We worked with a supplier in basically helping reduce nearly all of the plastic in packaged salads, which was one of the top areas that we had gotten feedback from customers on wanting less plastic.
And so we brought this product to market. We felt it actually kept the quality extremely well.
There was just a little bit of plastic so you could still see some of the product. But at the end of the day, the consumer still wanted to be able to hold up and see every little piece of lettuce in the process.
Even in something like pasta, which is another area we innovated with some suppliers on, folks wanted to be able to see the pasta. And we had alternatives where there was great photography of the product, but they were still leaning in the ones that had sort of the plastic window in it.
So I think the piece that we need to work through is sometimes customers say things that they want, but their buying behaviors don't always match up to it as well. And so some of it's around the education of why we're doing some of these steps in the first place.
One of the things that I'm excited about is there's a lot of alternative packaging that's coming to bear that is 100% compostable, plastic-free, but it has the look and feel of plastics. And right now, in some cases, those are a little bit more expensive.
And so we need to be working through with our suppliers and how can we help bring these costs down and make it affordable and we can have a win for the quality of the food as well as the environment. For me, that's some of the win-win-win solutions I was mentioning earlier.
What does the grocery store of the future look like? How will Whole Foods be different five years from now? I think customers are going to be more focused on making decisions that are very personalized for them. I mentioned one of my hypotheses that customers are going to buy based upon their own personal biome in the future.
And so I think the ways by which consumers are going to pull information to help understand what products they want to buy, whether it's relative to that or buying decisions on specialty diets or different things that have transformed through the supply chain and how the product has been produced. I think we're going to find different ways by which technology is going to help fuel and support that.
I think you're also going to see a space where across the entire industry, this isn't just whole foods, you're going to see more and more focus on products that will be certified, regenerative, and organic. As more and more consumers, especially as the Gen Z consumer becomes a bigger part of the overall customer base, understanding those impacts is going to be important.
I believe the grocery store of the future is going to have to be able to help share those stories and share that information in a way that we haven't seen before. I also think that we're going to have much more of an omni-channel experience where customers are going to buy certain products and store more versus things that they're going to have pantry loaded that will just be shipped to their houses.

And we're starting to see some of those trends already. I think we're going to see that increase as we go into the next several years.
And so you're going to see a lot more focus on ready to consume products physically in stores that customers want to grab and go. You're going to see a lot more focus around the products that customers want to select themselves in store and having more dedicated space to that versus what might be some pantry loading items that can just be shipped directly to your home.
And so I think our actual format changes a little bit. And what are the three takeaways you'd like to leave the audience with today? Well, the first one is around our team members, which I mentioned just a few times, but I'm so proud of the work that they do every single day within Whole Foods Market.
And a key part of our relationship with our team members is the connection that they have to the purpose in nourishing people on the planet. And so I think for all leaders, thinking about what is the culture that you're cultivating and creating every single day.
My second one is, I truly believe a business can only operate to its highest potential and be at its best when it's looking at a stakeholder model. And one of the things we really try to work through is how do we support all of our different stakeholders, whether it be team members, customers, suppliers, communities, the environment, and figuring out what those win-wins are.
And for me, it's always working backwards from the customer. How do we do what's right by them? And at the same time, make sure that we're supporting all of our stakeholders.
The last one that I'll mention for a leader, I believe to really live to their best potential, it's making sure that you've got the right work-life balance and that you can authentically be connected to that purpose of your company and ultimately make sure that you're taking care of yourself and setting the example for the rest of the organization. It's one of the things that I try to do as a leader and setting that example, I think is so important and something I encourage all leaders to consider.
And so critical for any organization, whether it's a business or a school or a nonprofit or a government entity. Absolutely.
Thank you, Jason. This has been wonderful.
And thank you for your wonderful Whole Foods stores, which benefit so many people, the consumers, your team members, and all of your suppliers and farmers. Lynn, thank you so much.
It's just been a joy to be on the podcast. And I look forward to meeting up with you in New York at some point and walk in a store.
I hope you enjoyed this conversation about the food we eat and the issues around the care of the animals, the workers, the community, and the environment. If you're interested, we have a related episode about the 200 billion animals which are raised for food each year, often in horrific conditions.
Did you know that

the contribution of these animals to global warming is greater than the emissions of all the cars being driven around the world? Renowned Princeton bioethics professor Peter Singer shares on the impact of raising 200 billion animals for food on episode 224 of Three Takeaways. If you're enjoying the podcast, and I really hope you are, please review us on Apple Podcasts or Spotify or wherever you get your podcasts.
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I'm Lynn Toman, and this is Three Takeaways.

Thanks for listening.