John Mackey's Blog

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.