Back To Blogging

I can’t tell you how good it feels to be able to write in my blog again. Even though I wanted to respond openly and truthfully when confronted by the various accusations of wrongdoing last year, our attorneys and Board of Directors both thought it best for me to hold off while they conducted their Special Investigation and the SEC handled its inquiry. Those matters now are completed with the board affirming their complete support for me and the SEC recommending that no enforcement action be made against Whole Foods Market or me. Now that I’m free to post again, I am going to attempt to set the record straight about my internet postings in the past under the screen name “rahodeb.” I promise I’ll be moving on to other topics, but indulge me while I finally get to share my point of view on this particular topic. Here it goes…

 

WHY POST ONLINE? When I first discovered the Whole Foods Market online community at Yahoo! sometime back in 1997 or 1998, I was very excited to find a community that discussed Whole Foods Market. It was a very useful forum for me to explore various ideas and theories, and to have them discussed, criticized and debated. Online criticisms and debates helped me to better understand the strengths and weaknesses of the ideas being discussed, including my own. I could participate in the community as just another unknown participant on equal terms with every other participant.

 

My family life when I was growing up included having various discussions and debates at the dinner table about anything and everything people wanted to discuss. My father was a very passionate and skilled debater and he passed on both his passion and his skills to his three children; I use these skills in business everyday. I process information dialectically—I very much need to have ideas put forth, analyzed, and criticized from various perspectives to help me to fully understand the ideas.

 

The main reason I began posting on Yahoo! was because I enjoy and learn from online community interactions. I also like to express my viewpoints and I like to argue and debate.

 

From the very beginning, I also recognized that this online community had a large number of Whole Foods Market bashers and stock “shorters” who regularly made defamatory and often inaccurate statements about the company. Most of my posts at Yahoo! were made in response to these defamatory attacks on Whole Foods Market. I co-founded Whole Foods Market 28 years ago and have been its only CEO during its entire existence. Next to my wife, I love Whole Foods Market more than anything else in the entire world. Creating and growing this company has been my life’s work. Like any good parent, I wanted to defend my “child” when it was being maligned and attacked unfairly, and I often came to its defense, wielding my debating skills as best I could.

 

WHY A SCREEN NAME?

In online communities such as Yahoo!, the use of screen names is the normal custom as it allows posters to totally engage in the various discussions and debates that were taking place there. An online screen name is a great “equalizer” between people. No one knows who most of the other participants are in everyday life, and so everyone relates to everyone else on equal terms. The true identity in the outside world is irrelevant for purposes of participation in these communities. If a person is well known or famous in “real life” almost no one in the special community knows or cares. What matters is the quality of what is said—not who says it. I do not think that the virtue of transparency is particularly applicable or relevant when it comes to online communities whose custom is to participate through screen names. Within this context, I believed being consistent with the custom was more important than promoting the virtue of transparency as long as my information was accurate and my arguments well-reasoned.

 

CLEARING UP THE CONFUSION

Contrary to the way it was portrayed in the media, I did not participate on Yahoo! primarily to denigrate Wild Oats. I think this is one of the areas of greatest confusion for people. Here is how I see it:

  • OUT OF CONTEXT: I really want to encourage interested people to take the time to read my posts at Yahoo! in the full context in which they were written—usually a discussion or a debate and usually in defense of Whole Foods Market from other posters’ criticism. It is also valuable to read the posts preceding mine. More than 95 percent of my posts were made in response to other participants’ posts. I rarely originated posts myself. I made more than 1,400 posts on the Whole Foods Market and Wild Oats online community message boards on Yahoo! over an eight-year period. (Even though that sounds like a lot, it averages out to about 3 posts per week.) In the total context of my participation in these two communities, my comments regarding Wild Oats occurred much, much less frequently than my comments about Whole Foods Market. I usually had many other things on my mind that I wanted to discuss more than Wild Oats. Unfortunately, the media selected just a few comments out of the 1,400+ that I wrote, presented them out of their proper context, and sensationalized them to tell a story with more controversy and conflict. This was very misleading coverage about my rahodeb postings which exaggerated, distorted and, in some cases, simply lied about what I actually said. The comments that were taken out of proper context of the overall discussion do not accurately represent the actual spirit of rahodeb’s postings, in my opinion.
  • MY COMPETITIVE SPIRIT: I am also a very competitive person. I very much doubt that Whole Foods Market would even exist today without my competitive entrepreneurial drive first creating and then pushing the company forward to grow and evolve for more than 28 years now. I don’t wish to apologize for being highly competitive because much of my drive and creativity come from this competitiveness. While I respect and admire a number of our competitors and have learned from them, I certainly don’t love them, and that included Wild Oats when we competed against it. Whole Foods Market directly competed with Wild Oats for about 14 years, and sometimes the competition between us was both intense and personal. I believe that is largely the way business works—it is highly competitive. However, I don’t believe that I ever crossed the line of fair but vigorous debate in these postings. It is also important to understand that I did not single out Wild Oats as the only competitor I discussed. From time to time I also discussed and debated the virtues of food co-ops, specialty grocers and national and regional grocers.
  • RIGHT TO EXPRESS MY OPINION: All of the Whole Foods Market information that I used in my posts was information that previously had been disclosed by the Company and was included in the public domain. I strongly believe in the First Amendment of our Constitution and our right as citizens to express our opinions to each other. I believe I was exercising this right.
  • MISTAKE IN JUDGMENT, NOT ETHICS: My mistake here was one of judgment—not ethics. I didn’t realize posting under a screen name in an online community such as Yahoo! would be so controversial and would cause so many people to be upset. That was a mistake in judgment on my part and one that I deeply regret because it caused so much negative media attention about me and Whole Foods Market.
  • BECOMING A PUBLIC FIGURE: Perhaps part of the problem here is that when I first started participating in these Yahoo! online communities back in 1998, Whole Foods Market was only 15 percent as large as we are today. We had yet to open any stores in New York City and we weren’t taken particularly seriously by most of our competitors or the media. Whole Foods Market’s tremendous growth over the past 10 years hadn’t yet occurred. As the CEO of Whole Foods Market I was seldom interviewed and few people knew or cared who I was. I wasn’t a public figure and had no desire to become one. However, as Whole Foods Market continued to grow and as we opened large and exciting new stores around the United States, both the company and I became better and better known. At some point in the past 10 years I went from being a relatively unknown person to becoming a public figure. I regret not having the wisdom to recognize this fact until very recently.
  • WRONGLY ACCUSED OF MANIPULATING OATS STOCK PRICE: It was infuriating to be accused of trying to manipulate Wild Oats' stock price downward so that Whole Foods Market could buy it more cheaply. This is malicious speculation and an accusation with no basis in fact. My last Yahoo! post occurred in August 2006, and Whole Foods Market did not begin talking to Wild Oats about a buyout until January 2007—a five-month gap. In addition, almost all of my posts that were critical of Wild Oats were made when its stock was far lower than the $18.50 per share Whole Foods Market paid for it. When I posted as rahodeb, was I trying to “hurt Wild Oats financially or otherwise?” Of course not! The question assumes that someone named rahodeb posting on an online message board could actually hurt Wild Oats if he wanted to. How could rahodeb possibly hurt Wild Oats on a digital message board? The answer is obvious: rahodeb couldn’t.
  • PUMPING UP WFMI? NO: Some have asked if my intention was to inflate Whole Foods Market’s stock price. Think about this: how would rahodeb be able to inflate Whole Foods Market’s stock price even if he wanted to? I was just one anonymous poster amongst hundreds at any particular time. Rahodeb had no authority or power to do anything in the real world, including inflating Whole Foods Market’s stock price. If I had posted as John Mackey then I might have been taken more seriously by the rest of the community, but I never posted as John Mackey or as the CEO of Whole Foods Market, and the other participants didn’t know who I was. The fact is that rahodeb was just another enthusiastic Whole Foods Market “cheerleader” at Yahoo! and consequently few people took him very seriously. Heck, rahodeb didn’t take himself very seriously either. It is quite amazing to me that rahodeb was taken so seriously by so many people when the media broke the story, especially people who had not taken the time to read what rahodeb actually posted.

KEY LEARNINGS I’ve learned many things from these events. The primary lesson I've learned is that because of Whole Foods Market's success, I have become a public figure. My personal and work lives are now closely connected—and impact one another. Anything I say or do is now at risk of showing up on the front page of a national daily newspaper and therefore, I need to be much more conscious about the implications of everything that I say or do in all situations.

 

MOVING ON I wish to apologize to all the stakeholders of Whole Foods Market—customers, Team Members, investors, suppliers, and our communities. I am truly sorry that all this has happened and put a negative spotlight on our company. If I could get a “do over” on this one, I certainly would choose not to have ever participated in the Yahoo! online financial communities. Unfortunately, I cannot undo the past. I can only learn the many valuable lessons that are here for me to learn and try to do better in the future. Thanks to all of you who have continued to support me and Whole Foods Market. I'm excited about what the next few years will bring as we fully integrate the Wild Oats stores and Team Members into Whole Foods Market, and expand our stores and our mission into additional communities while continuing to satisfy and delight our current customers.

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91 comments

Comments

Michael says …

Yes, please do post more often! Some of us miss you!

marko says …

Great to have you back at the keyboard. A large segment of the media will always thrive on controversy. Always has and always will. I, for one, have always appreciated your candid remarks and unwavering dedication to your company's mission. Cheers.

Michael Beesom says …

Welcome back to blogging. To me, the important thing is that you go forward and do even greater things--especially using Whole Foods to help others. Also to innovate in food retailing in new ways. I just read a post in a blog about your Back to Blogging post that I found interesting. Thought you might care to read it if you haven't already. It's here: http://naturalspecialtyfoodsmemo.blogspot.com/search/label/CEO%27s%20Blog%20John%20Mackey Good luck!

maria elena says …

Thanks for wanting to share your thoughts and your lessons learned so freely, openly and honestly, this approach is so refreshing from a CEO! SHARING IS CARING, and you seem to care deeply about what you do and that's great. Its difficult to be understood by all of the people all of the time, there are always those souls among us who thrive on the more negative aspects of our humaness and we have to allow them to be without loosing sight of our own greater purpose, in the end, when you come from a place of love, when your work comes from your heart ain't nothing going to stand in the way of universal evolution, :). Your beloved whole foods market does have its share of critics, ce la vie! And while I don't agree with everything the market does, I am one that reminds the critics that WFM has single handedly raised the national awareness of the role that food plays in our life, and how we need to focus, as a society, on demanding that our food supply be treated with nothing but the greatest of respect and care, our existance depends on it. From my perspective it was WFM that catapulted us to this awareness and for this I am deeply grateful. Is WFM perfect? no, and you know that, but I have no doubt that it will continue to evolve and lead us, directly or indirectly, to a better relationship with our food. thank you.

Chris says …

Glad to see you're back posting to the blog again! It's unfortunate that the posting to Yahoo got so blown out of proportion.

Michael says …

You da man John. Look forward to reading more of your blogs.-

Jay in Austin says …

You should stick to other things, like running a grocery store chain. Seriously, if you have to write this much about how you were wrongly accused, chances are they were right about some things.

ktyap says …

Glad to have u back!

Michael Strong says …

Great post, John. This is important to say so that sane people can understand how the situation came into being: "I could participate in the community as just another unknown participant on equal terms with every other participant." The notion that an anonymous Yahoo poster could influence stock prices of a large public corporation is so unbelievably silly it is hard to believe that anyone could believe such a thing. Therefore whenever I see that accusation repeated it strikes me as pure spite with no cognitive content at all. This is also an important distinction that I'm glad you made here: "My mistake here was one of judgment—not ethics." Because the anonymous postings were, when they were made, completely harmless, it is absurd to consider them an ethical flaw. That said, given your public status it does make sense to call them a mistake in judgment, especially in light of the extraordinary reaction when they were made public. And, yes, I work with John and he has donated funding to FLOW, the non-profit I head.

Bill says …

Mr. Mackey, thank you for taking the time to "set the record straight". Most top-tier executives wouldn't even bother. The only sadder news than the FTC & media beating you up, was the fact that, according to the local newspaper, Whole Foods is not coming to my neighborhood any time soon. We are currently looking at a 4+ hr round-trip to the nearest store. While my employer enjoys that policy, my friends & I don't. The fuel alone makes the trip cost prohibative. Please reconsider. Thanks, & all the best to you & the entire Whole Foods Family.

Rand says …

A corporate officer annoymously posting about their own company and their competitors. Seems unethical to me.

Bruce says …

Welcome back Mr.Mackey we have all misseed your words of wisdom.I am sorry it took so long for those to straigten out a very minor situation that was blown out of proportion by so many.I am so happy that once again I am allowed to read your pearls of wisdom.The one thing I admire most about your writtings is that to the best of your ability you always tell the truth.It is often said the truth shall set you free,and it held true as your back.We at the Midwest Distribution are very proud of you and very proud to be apart of one if not the best company in the world to work for.Times may be a little tough for us all now,but as you have we will also perservere.

Bryan Bergmann says …

I'm a new employee at the Nashville store and am thankful that you guys bought Wild Oats and came to town. No other institution is poised to have the greatest influence to bring people inside the "natural living" camp than Whole Foods. Chemicals in our food and in our homes are shortening life spans and life quality. Whole Foods bridges the gap and helps people change. Please keep blogging vigourously to spread your ideas! I'm a fan of daily consistent posts that develop a thesis over time. This blog could be another method of cultural change. It all starts with thoughts and ideas... Thanks for pioneering, I hope to meet you in Nashville some day!

Chistopher Andrew says …

Sorry, but this still leaves a bad taste in my mouth. Mackey openly critcized Wild Oats on the Yahoo! boards. If enough people do something like that, it will start to make some investors skittish, and the stock price could well have suffered as a result. And if Mackey ever gave the impression that he had expert knowledge of the industry (which it would be hard for him NOT to), that would only make people take his comments even more seriously and thus hold the potential to sway OATS' price even more. People will always say bad things about you. It happens, especially when you're in the public spotlight. Hiding your identity on an anonymous message board is not the best -- or most ethical -- way to combat that. Wouldn't it have been enough for Mackey to read what people said and leave his comments here at this blog, if he had something to say? The transparency would have been much better.

Bragi Valgeirsson says …

I have to agree with Chris on this. It looks like these deals that corporations sign with the Government where they state they did nothing wrong but at the same time agree never to do it again. Sometimes, its better just too simply say I was wrong, I am sorry and move on, not a long letter approved and reviewed by a team of lawyers.

Andres Acosta says …

For a CEO of a publically traded company to run a blog requires transparency,courage and committment to integrity. John clearly says, "My mistake here was one of judgment—not ethics"; and then goes on to do a good job of admitting the mistake while defending his ethics. It’s the sign of a great leader who can pick himself after taking a hard fall and keep moving forward.

John Mackey says …

I want to thank the folks who have posted comments supportive of my return to blogging. Thank you. To Jay: I feel that my blog post was relatively short and did not try to answer but a small fraction of the hundreds and hundreds of accusations and attacks made against me in the media. I would need to write a book to do so. I do not agree with you that mere repetition of falsehoods by many different people makes something true. To Rand: Why do you think such postings are unethical? Why would it be ethical for you to post under a screen name on a Whole Foods on-line community and not me? Why do you have such rights and not me? To maria elena: Thanks for your support. I think Whole Foods has had a major impact on raising awareness about food issues, but we certainly haven't done so "singlehandedly". The movement towards quality food and sustainable agriculture is much, much larger than Whole Foods. However, we are proud of the contribution that we have made and hope to do much more in the coming years. To Lila: Thanks for the nice post. My father was very proud of me before dying in 2004. He and I were very close and he mentored me in business for many years. Unfortunately my mother died back in 1987 before Whole Foods had achieved much success or had even expanded outside of Texas. She never really understood what Whole Foods was all about. It was very confusing to her. I certainly would enjoy a chance to talk to her today and show her some of our newer stores. To Bill: Thanks for your support of my blogging. We are opening stores as fast as we are able to. We've got about 89 in development right now. To Joe Johnson: I have never claimed that Whole Foods "single handedly raised national awareness" and I can't "quit taking all the credit" because I've never done so. You are apparently responding to maria elena's post, not to me or to Whole Foods. I don't kow maria elena and she doesn't speak for Whole Foods. I'm glad you recognize that Whole Foods has got lots of competition. We certainly do! I wish the FTC would talk to you so you could set them straight on this. I never posted any "propaganda"--just my personal opinions. Adjusting for food inflation our prices have been steadily going down for years as our larger scale permits us to buy at lower prices and to pass these savings on to our customers. I'm sorry that we seem to be losing you as a customer Joe. We will try to do better in the future. To Rohit Bhargava: Thanks for your post. I can't promise to participate on your blog site on "Personality", however. It sounds very interesting, but my time is very scarce. To Chris Parente: I'm not trying to have it both ways. I am in fact truly sorry that my rahodeb postings caused so much negative media attention to Whole Foods Market and so many personal attacks on myself. I deeply regret that happening and I've learned many valuable lessons. That being said: I don't believe I did anything either illegal or unethical when I posted on-line. I violated no federal securities laws. I violated no company policies at Whole Foods. I merely posted my opinions on Yahoo! under a screen name which is the exact same thing millions of other people do every day. What is so terrible about that?

Chris Parente says …

Well written post, but you're trying to have it both ways -- appear to apologize, while justifying why you didn't do anything wrong.

Grace Haener says …

John, Thank you for being so passionate about food. Most CEO would have released a 1 line statement through their lawyers. You care enough to let us know your thoughts. A CEO who cares is rare. When I move to CT-Fairfield last year one of the exciting thing to look forward was Whole Foods coming to our area. I look forward to your blogs..speeches. I am a big fan of yours John and you were one of the pioneers in this country to raise national awareness about eating well ..eating right. All the best.

Rohit Bhargava says …

John, This is a great post and way to try and set the record straight on what has become a favourite example for many people who work in marketing and social media (including myself) about the dangers of not using full transparency. For my part, I intend to share your update anytime Whole Foods comes up in the events and will blog about it on my marketing blog. I also recently wrote a book about the need to have a personality when building a brand called Personality not Included. There is a companion site to the book called The Personality Project (www.thepersonalityproject.com) that I would like to invite you to submit a contribution to as another way to get your message out there. Let me know if you'd like to participate in the site (all I need is a single blog post), and I'm glad to see you getting back to blogging!

Joe Johnson says …

Actually, Vitamin Cottage opened in Colorado in 1955. Whole Foods has not single handedly raised national awareness. They've helped, and it's great, but quit taking all the credit. You don't deserve it all. It's great to have competition! I wouldn't equate dignity to posting propaganda under a false identity, but we all have our own personal opinions of what's right and what's wrong. WF has some serious competition right now. I'm finding a lot of similar products at your competitors for 30-40% less. Maybe WF should reconsider the fancy fixtures and the amount of money spent moving displays around to help decrease cost because your prices are getting high! Something to think about. I still shop at Whole Foods, but I find the prices going up, and the quality going down and it worries me. Get back on track guys!!!

Lila I. says …

John, This is very helpful to hear your side of the story (not that I placed any weight on the "other" side ;-). It's amazing and just wrong how the media can manipulate things and make them appear so far from the truth! Congratulations for "the board affirming their complete support for you and the SEC recommending that no enforcement action be made against Whole Foods Market or you." Also, congrats for handling this whole thing with patience and dignity. It's great hearing about your parents in your past two posts. I bet they would be very proud of you.

Jini says …

Everyone is entitled to their own opinion and that is what freedom of speech is about. I do however think that this long message was quite unecessary. I mean why go off on a tangent about creativity and competitiveness, I mean really, Whole Foods is a upper-middle class organic food store. I'd understand that statement if it were in reference to music or art, but c'mon now, we are talking about everyday food you put on the table to feed your family. I understand it takes perseverance to keep pushing your company further, but in reality, that is not a 1 man job, that is a job of a compilation of people, including the consumers that buys your products. If anything you should be even thankful that there are actually people out there that don't mind paying an arm and a leg for groceries. But that is just my opinion, and I am entitled to one just like anyone else. Anyhow, although I don't agree with everything said. I don't think anyone should be punished for blogging. All in all, it's your choice if you want to read on or close the webpage. I really don't believe that reading a blog or a reply can change up a stock price, unless you take everything read on the internet literally (which you shouldn't anyways).

Maryel Mckeown says …

Dear John, It is with great delight that I discovered that you were back to blogging again. I often read your words and find them to be insightful, inspired and always interesting. I am also proud to be a teammember of a company that is socially responsible, and one that places teammember excellence and happiness, along with satisfying and delighting our customers as a basic core value. As for those posters who continue to insist that we are an over priced store, I suggest that they go to the nearest WFM and ask for the concierge or the marketing person to show them around the store pointing out the true value of our private label 365 products. The quality of our personal store brands is stellar and the price point frequently the best price for that particular item. The level of customer service is unequalled, this being the true benefit of shopping WFM. Knowledgable teammembers who are willing and able to answer questions, to offer suggestions, and to go out of their way to ensure that the customer gets an unforgettable shopping experience, this is what makes WFM the leader in natural and organic foods. Thank you for leading the company forward, for your passion & vision, and for creating a company where we as teammembers truly have a hand in our shared fate. Looking forward to your next blog. Peace.

J.Peron says …

Your comments in reply to the accusations make perfect sense. The very idea that an anonymous "nobody" could either inflate one stock or deflate the value of another is, on the very face of it, ludicrous. It was the anonymous nature of your posts which made them ineffective for that purpose. To then try and turn them into a campaign of some sort is absurd. Your point is persuasive.

Lord Westfall says …

Ha! I had wondered why you had remained silent while all this nonsense was going on...it seems in your nature to confront such absurdities. Anyone who has even a hint of critical thinking skills would realize that posting on a stock message board has no effect on the stock price of a major company...it is truly amazing that anyone can even think this. Of course this whole issue wouldn't have even came up if the FTC hadn't placed absurd demands on WFM and then gone on a fishing expedition trying to find something negative about you. What was that all about? Anywho, I have a question for you. If you were posting on OATS' board claiming the stock was overvalued, why then would you turn around and pay a premium to aquire it a few months later...and a large premium at that? As a shareholder, I'm a bit concerned that OATS wasn't worth $18.50/share, and some of the posts I've read indicate that you felt the same way earlier. Did the value of OATS really change that dramatically in such short time? Regards, Lord Westfall

chris macrae says …

Your business and leadership is one of the few that wholly excites curiosity among students and practitioners of future capitalism -let's hope it becomes a favourite open source case when Paris' unlearning MBA starts this fall http://www.hec.fr/hec/eng/news/news-detail.php?cle=74916&num=1213

Debi A says …

Has being a public figure or just your life experience brought you any clarity on this issue that I bring? I have noticed just how much I adore and embrace validation... and how bruised and hurt I get from being judged 'unfairly'... when in all reality, neither should affect me one way or another. And in all reality either one can give false feedback of what is right and true. Correct? (an example being the Enron finance people were being immoral and getting validated, and the people within the company trying to do the right thing were being villianized. ) What has having the spotlight on you, and being in this regulation laden arena brought you on this?

Brian Johnson says …

Hey John: Great post! I'm thrilled you're back to blogging as your posts completely transformed my consciousness as an entrepreneur when I first started reading them a few years ago. Can't wait to see what's in store (no pun intended :)!! -bri

John Mackey says …

To Bragi Valgeirsson, No deal was cut between the government (the SEC) and either Whole Foods or me. After investigating my posts they concluded that no enforcement action against either Whole Foods or myself would be recommended. My blog posting wasn't reviewed by a "team of lawyers" as you claim. For the record: I am sorry and I am moving on. To Chistopher Andrew, You seem to still be confused about the rahodeb postings. I strongly urge you to spend some time reading what I actually wrote instead of simply judging me from media reports that you read or heard. "Mackey" did not openly criticize Wild Oats on Yahoo! A small number of posts by a character named rahodeb criticized Wild Oats. Those criticisms had absolutely no effect on Wild Oats stock price. I seriously doubt that any postings by anyone on Yahoo! has any effect on any company. No one took my comments on Yahoo! seriously because no one knew who I was. I wasn't "hiding" my identity on Yahoo! I was participating in an on-line community the same way that everyone else does who participates on those Yahoo! does--with a screen name. That is the normal custom and I see no reason why that custom applies to everyone else but not to me. To Bryan Bergmann, I look forward to meeting you when I visit the Nashville store. I believe that will be next March when we have our Annual Meeting, but perhaps before. To Maryel Mckeown, Well said. I agree with you about Whole Foods pricing. We are competitive with anyone out there when comparing products of equal quality. Unfortunately our critics see what they want to see instead of the way things really are. To J.Peron, Thanks for seeing things clearly and sharing your clarity here. To Lord Westfall, I urge you to go back and read my detailed reasons for acquiring Wild Oats that I made a year ago and posted on my blog under the title of: <a href="http://wholefoodsmarket.com/socialmedia/jmackey/2007/06/19/whole-foods-market-wild-oats-and-the-federal-trade-commission/#2" rel="nofollow">Whole Foods, Wild Oats, and the Federal Trade Commission</a>. I won't repeat the reasons here again. The main point for you to understand is that Wild Oats had a certain value as a stand alone company and a completely different value as a part of Whole Foods. As an independent stand alone company Wild Oats had lost $97 million over a 20 year period. Think about that--in 20 years they not only didn't make any money, but they lost $97 million. By almost any objective valuation metric Wild Oats stock wasn't worth that much IMO. What held the stock price up, despite its continued losses, was the collective belief of the Market that someone else would eventually buy it. Indeed, the billionaire supermarket takeover expert, Ron Burkle, had bought 17% of the company and the Market believed there was a good chance that he would buy the rest of the company as well. The Market also believed that someone like Whole Foods, Safeway, or Kroger might buy them. So why was Whole Foods willing to pay $18.50 a share if I believed (posting as rahodeb) that Wild Oats was worth considerably less? The answer is what Whole Foods will do with the OATS stores under our management. Whole Foods intellectual, operating, and cultural capital in managing natural food stores are all huge. We've already shut down most of the Wild Oats stores that were losing money and we are systematically improving and upgrading the stores that remain. Whole Foods stores average $917 per sq. ft. in sales while Wild Oats stores only average $450 per sq. ft.--only 50% as much. We believe that we will be able to increase Wild Oats sales per sq. ft. over the next 3 to 5 years to be approximately equal to Whole Foods stores. If/when that happens then the Wild Oats stores are going to be exceptionally profitable and the acquisition will be strongly accretive to Whole Foods profits. Was Wild Oats worth $18.50 to Whole Foods? We think it was or we wouldn't have done the deal. However, it takes Whole Foods superior store operating abilities to unlock the hidden value that exists within Wild Oats. That hidden value was not realized by Wild Oats previous management as their $97 million in cumulative losses clearly demonstrates. Would we like to have paid less than $18.50? Of course! However, that was the best price we were able to negotiate.

John Mackey says …

To chris macrae, I've spoken at about a dozen MBA programs around the United States over the past several years. Without exception the students were quite excited about my message about Conscious Capitalism (see my blog posting on Conscious Capitalism). I believe that 21st century business is going to undergo a tremendous transformation on the lines of the message that I outline in my blog on the subject. These young MBAs as well as thousands of young entrepreneurs will transform our society for the better over the next couple of decades. Hopefully young entrepreneurs in France will be part of this larger movement of transformation. To Debi A., I have Zero desire to be in the public spotlight and avoid it as much as possible. I do not need or seek "validation" from the public. I urge you to read my <a href="http://wholefoodsmarket.com/socialmedia/jmackey/2008/05/21/bentley-college-commencement-speech/" rel="nofollow">Commencement Address at Bentley College</a> on my blog, which gives many of the lessons I have learned over the previous 12 months.

C says …

Gosh, using a moniker in an online forum. What will people think of next. =)

Reed Burkhart says …

Hi John, Welcome back. In the "<i>other topics</i>" column, I wonder, John, if you may like to comment on other current Conscious Capitalism-related happenings -- especially the current Ebay suit against Craigslist. Craig Newmark appears to use his personal profits, in part, to promote truth-telling to power. In one interview, Craig mentions (paraphrasing from memory), "<i>and then there is this idea that what we are doing [our approach to business] is part of something bigger.</i>" If a common understanding is to come about of what Conscious Capitalism might best mean, it will likely happen from dialogues between and about those who are making the new waves -- perhaps such as you and Craig Newmark. Incidentally, the universe seems to be set up in an amazing way. It seems, perhaps, to direct energy in just the right direction for each of us: a) pushing Mackey towards his humbler side (a quality that Newmark appears to exhibit well)* b) pushing Newmark to consider and discuss his own practice of capitalism with deeper articulation (where Mackey has perhaps shown unparalleled leadership)** * I wonder if humility may be a key prerequisite for advancing a coherent movement towards an evolved practice of capitalism – and I wonder if cultural evolution (and business culture evolution) might be inextricably tied to both personal, and collective personal, growth. ** I wonder if collaborative refinement of concepts and practices of Conscious Capitalism may be prerequisites to Conscious Capitalism, because prerequisite to establishing winning arguments for economic theory, public policy, etc., which may be required to support the collective advance to truer and more durable business culture (and general culture). Thanks, John, for being you. A friend once asked why I would ever try to change anything in the universe, on the grounds that everything was already perfect. It seems to me that while there is perfection in all of us today, that today’s perfection cannot equal tomorrow’s perfection – if life, itself, would have any meaning. So here’s to a practice today that works towards more perfect practices tomorrow: more perfect practices in business culture, and more perfect practices in human culture – acknowledging that with all our latent imperfections today, there is still something perfect about it all, even today. Regards, Reed

Zhjondon says …

Hey John, it's good to have you back on the blogging scene. I must say that I really respect the fact that you have taken out time to respond to most comments on here, even the malicious. I personally don't see why you have to justify your actions to anybody in a capitalist economy where words seem the closest we'll ever come to any moral or ethical substance. The internet has created a forum of equality (of sorts) and if all user ID's or internet monikers where real names, only then would we have justifiable grounds to question your motives. You have built a dynasty I can swear most of these haters can only dream of, so its only natural that the Bragi's, Jay's and Chris' question elements they don't understand. As long as WFM keeps up with the core value of giving back to the community and environment (the Green Mission, The Whole Planet Foundation, The Race for the Cure, 5% Tuesdays, etc) all is well. As a matter of fact "YEKCAM" would be a nice moniker to take on next. Good luck John and may the force be with you! Peace.

Robert White says …

I learned and got real value from this post. While I'd prefer to not create the media firestorm you endured, should I ever make the kind of unintentional mistakes you made, I believe I'll be better prepared to take responsibility and to communicate the lessons learned. Good modeling here--thank you!

Laura says …

And as we say on the floor "thats how we here at Whole Foods Market like it".This explanation right here... this is why we work for you! Let's continue to educate our team members and guests why it's important to demand knowledge on where, how, and what our food is grown from. For that is the issue at hand.

Daniela Papi says …

Dear John - I am impressed with your belief in transparency and your commitment to openly expressing your ideas and opinions. Perhaps those who argued "why such a long post" have never worked to create something that they believed in so passionately that attacks against is almost seemed like personal attack and of course call for a defense when they are undue. I have followed your work through FLOW and other material and I believe that this open dialog is the key to changing opinions and attitudes. If we all left our arguments with "I'm sorry, I'm moving on." or "I'm right, you're wrong." and didn't ever express the WHYS and HOWS of our opinions, how could we all learn from each other? I believe that my generation (I'm turning 30 this month) is in a position to propagate huge shifts in actions: what we eat, what materials we consume, how we pollute, where we shop, where we give - but shifting the ATTITUDES of the consumers and givers, shoppers and polluters, that is where these next generations need to focus their energies in order to make these action choices stick, in my opinion. Your blogging, openness to criticism, admissions of mistakes, and willingness to engage the public in open dialog is a part of this necessary attitude shift. At the NGO I founded (<a href="http://www.pepyride.org" rel="nofollow">www.pepyride.org</a>) and affiliated volunteer tours which fund our work, we have found that the times when critics voice concern over our actions, pricing, and policies are the times we are able to reflect, revise, and revisit our decisions. Criticism, openness to it, and admission of failures and setbacks which are of course inevitable, breath life into new developments and innovations. Organizations and people who openly admit mistakes while also engaging in open dialogue over criticism, rather than ignoring it, are much more trustworthy to me than those touting a clean bill of actions. Finally, when it comes to critics of pricing, something many organizations working to offer quality products and services, human capacity building, and thoughtful decision making face, I will now defer them to <a href="http://www.youtube.com/watch?v=cdrCalO5BDs" rel="nofollow">http://www.youtube.com/watch?v=cdrCalO5BDs</a>. "Some things cost more than you realise" and higher prices aren't always a bad thing. Thank you for sharing with us John. I admire the model of transparency and dialogue you are setting and I hope it influences others to follow your lead. - Daniela PS - To be fair, I don't even consider your actions a "mistake" as, had you blogged with your real name, THEN you would perhaps have been able to influence markets slightly. Changing attitudes towards the belief that "the successful businessman is always in the wrong" might be where we need to start ;-)

Tony Kvale says …

Thank you for taking time to explain this situation, we've been wondering about it. It is rare to see authentic humility and apology in today's leaders, and I applaud your bravery. The thing most striking is that I think I might've been doing the same thing in your situation! (uh-oh, now I've alerted the SEC to watch me closely!) Best wishes to you, John! Kvale Good Natured Games

Millie Serat says …

Yeah everything here is sugarcoated and Yahoo terminated your ID for abuse of terms of service didn't they? Next time abide by TOS.

chris macrae says …

It may sound melodramatic to say that the sustainability of the human race will ultimately depend on whether we can reinvent true media, but 2 generations of my family have pretty well made that our life's exploration. When it comes to critising sugarcoated uses of media, we'd propose making a hall of shame out of mass media incident abuses before we rush to judge who are the shames and the fames of new media's use. It amazes me that here we all are nearly a decade into century 21 and we have no transparent and cross-cultural educational curriculum to help kids debate the differences between the whole truth, the inconvenient truth and the downright evil uses that mass media has been repetively put to. Where is the olympic games of 21st C reality competitions instead of ones where tv image-making conquers the world spun by arbitrary games ruled by balls, sticks and short-distance timelines?

Boake Moore says …

Subject: Conscious Capitalism: Creating a New Paradigm for Business Dear Mr. Mackey - I own and started a coffee company 2 years ago to help local homeless children in Atlanta and orphans around the world. Since it is a "side" business we decided there would not be any overhead or salaries all the profits would go to help the impoverished children. For the past 2 years my business has grown through both on line orders and through the sale at churches around Atlanta Georgia. I recently approached WFM - Southeastern Corporate Office about selling my coffee in the local stores. The easy answer would have been no - I don't have any brand recognition and WFM already has so many great coffee vendors. However I was pleasantly surprised to get the response: you are a small local vendor and we like to support the small guys; and you are helping our community with your projects and we are an active member in helping our community so we would like to partner with you. I can proudly say I received my purchase orders this past week and my organic coffee will be on display this week at the 7 Whole Foods Markets in Atlanta. Doug Alvarez and John Simrell have been tremendous at helping me set this up and very supportive in believeing in my vision to help homeless children. All the proceeds from the sales will go to a Family Crisis Center in Atlanta - where moms and children are left homeless due to spousal abuse. So your customers get to try a great new organic coffee while we get to help hundreds of homeless children. Doug and team are helping me setting up samplings and marketing so people will try a coffee that no one knows about - because as he says weat WFM are all about community. Thank you. But it gets better. While we were going through setting up the paperwork and them teaching me about the WFM - John Simrell told his financial team about our new partnership. Well your employees on their own had a quick on the spot "lets help" campaign. Your employees brought in hundreds of clothes, books, shoes and toys for the Family Crisis Center - so much I have carried 2 large truckloads so far. We haven't sold the first bag of coffee yet but WE are already making a difference. So many companies talk the game of helping community but its been truly amazing to see the WFM culture and spirit at work. I recognize the risks your SE Office is taking in giving me an unknown some shelf space but its so refrshing to see a company do what they preach. Again thanks for your new "Conscious Capitalism: Creating a New Paradigm for Business" - its very alive in Atlanta Georgia. Sincerely, Boake Moore Mission Grounds Gourmet Coffee "The Coffee Helping Children"

Eric Pinckert says …

This "BlogGate" is a tremendous distraction to the business of running global company that pioneered many industry best practices we now take for granted. Instead of addiing to the war of words, Whole Foods needs to sharpen the saw to maintain its brand and market leadership against competitors fine-tuning strategies straight of the WF playbook. My two cents: http://www.brandculturetalk.com/2008/06/06/

Peter says …

John The concept of a "do over" is fruitless and distracting from the fact that one always reaps what they sow. In other words, each of us controls the energy we put forth and it's important not to have any pre-conceived notions about what will blossom. The trick is to learn from whatever is reaped and keep on going. The biggest mistake one can make is not to learn from so called failures.

Red Elk says …

Welcome back to blogging John! I appreciate the challenge of vigorous debate that you have offered in the past, as I have read nearly all of your past posts, but more importantly, I look forward to your future conversations. I've never responded to your conversations in the past, but I want you to know that I have appreciated your thoughts and learned much about the core values in action from you. Thank you for offering the transparent communication --Red Elk

Mary Harris says …

Thanks John. We all knew it was hokey pokey:) See you next time in CHP. Faithful Team Member It's awesome believing in this bigger thing:)

Joshua Wallis says …

Great reading your posts again. I can't wait to see what Whole Foods is going to look like in 10 years with you at the helm.

Arobind says …

Hi John, First time reader of your blog. I have recently become a vendor to Whole Foods (La Jolla. Will be in Hillcrest soon). Well, I did not know that you had a blog and that all this has happened! Probably was living under a rock. I'm sure that it was not a pleasant experience, but now that it's over, it makes a rather interesting read. I hope to learn more from your experiences and comments in the future. Keep chugging, mate.

Gayla Dreith says …

I am in upper management also, I believe in Freedom of Speech and no better way than the internet. So, continue on my friend.... I find it so interesting that I am going to make a point to stop in at a Whole Foods Store and shop. Have a great day!!! P.S. Let the Board know that you have gained a new customer......

New Cars India says …

Hello John, I was looking for blog marketing and I came across your blog. When I read your blog I was shocked that how much time you people spend on the blogs. How can you manage to reply for the blogs with your busiest schedule? All the best for your future.

Voyle Glover says …

Like your style, John. More, I like your ethics and what you've done. Winston Churchill summed it up for you: "History will be kind to me for I intend to write it." You're writing your own history by your good work. Keep on keeping on.

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