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[27 comments]

Do Morons Run Whole Foods?

May 15, 2013

Forget about conscious capitalists. How about clueless ones instead? That's the assessment of Henry Miller, a Robert Wesson fellow in scientific philosophy and public policy at the Hoover Institution, of John Mackey and his Whole Foods co-CEO Walter Robb.

In an editorial on the politically conservative Daily Caller website, Dr. Miller doesn't question the financial success of Whole Foods. Instead, he argues the company's "airy-fairy New Age" business philosophy and stance on subjects such as genetically modified organisms (GMO) run the gamut from frivolous to downright foolish, making the company unworthy of his business and anyone else who doesn't want, as the editorial headline suggests, to "buy food from morons."

Dr. Miller questions Mr. Mackey's assertions that people go into professional fields or start businesses with a motive beyond profit. He took issue with an appearance Mr. Mackey made at Stanford years back where he told students that most doctors go into the field to heal people and not make money. The Hoover fellow said anyone believing in Mr. Mackey's conscious capitalism creed could also be "convinced that Bill Gates made his billions by working in a free clinic in Harlem." Presumably, Dr. Miller also has swampland and a bridge in Brooklyn that he's ready to sell to anyone who buys what Mr. Mackey is selling.

While Dr. Miller paints Mr. Mackey as a modern day P.T. Barnum, he is less charitable when it comes to statements that Mr. Robb has made about genetically engineered foods. He points to extensive research that shows the economic benefits and safety of GMOs.

"Mackey and Robb may 'talk the talk' about adhering to high ethical standards," writes Dr. Miller, "but they perform a profound disservice by opposing technology that can reduce the need to spray chemical pesticides, reduce soil erosion and the release of CO2 into the atmosphere, conserve water and farmland, alleviate famine and vitamin-deficiency diseases for millions, and even lead to the development of edible vaccines incorporated into fruits and vegetables."

FINANCIALS:     [NASDAQ:WFMI] [ ]

Discussion Questions:

Is Henry Miller correct in his criticism of John Mackey's "conscious capitalism?" Is he right in rebuking Whole Foods' stance on GMOs? Would Whole Foods be more or less successful if it took Dr. Miller's advice?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

Would Whole Foods be more or less successful if it took Henry Miller's advice related to its corporate philosophy and approach to issues such as GMOs?

Comments:

Frankly, I'm surprised to see nonsense like this see the light of day. Hoover Institute at Stanford certainly has prestige, yet regarding GMOs, the University has been heavily criticized for its near payola-inspired GMO assessment. To have Miller voice his opinion on GMOs as a continually growing body of peer reviewed scientific evidence warns against the dangers of GMOs, as more evidence about LOWER GMO yields, and LOWER profits for farmers leaks out, makes him seem foolish and degrades Stanford further on the issue.

Regarding Whole Foods, I can level plenty of criticism at the company myself, but Miller's childish rant has no meaning. Thousands of businesses are quite profitable despite having altruistic missions. I never heard that it's an either/or scenario: profit or serving consumers.

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Ken Lonyai, Digital Innovation Strategist, co-founder, ScreenPlay InterActive

See my article from yesterday. People like Mr. Miller are quite dangerous. Having said that, in a free market, people vote with their wallets. Consumers continue to shop at Whole Foods, Container Store, Starbucks and Costco despite criticism from (I am so tempted to spit the word back at him, bit I will not) short-sighted individuals like him.

Maybe Mr. Miller can take his advice elsewhere. Yuck.

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Paula Rosenblum, Managing Partner, RSR Research

The issue of GMOs aside (I think they are bad because of the effects they have on wild plants and animals among other things), it's a shame that the level of discourse on important issues like these has reached the point where we call people "morons" when we disagree with them. I see this more from the right than from the left, but it's on both sides. One thing is clear, though, Henry Miller has a very cynical world view.

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Al McClain, CEO, Founder, RetailWire.com

Amazing what we say when we feel unloved, under valued and unappreciated. Dr. Miller sounds like a sad man.

But I'm not sure exactly what Miller's "advice" is. He seems caught in the old duality mindset that one either makes money without regard to how you make it OR you do kind, meaningful and loving things with your life. That's clearly a false choice. Sounds like he's for the money and not so much for doing good.

On the GMO thing, Miller also assumes that you can solve one problem with another problem. Talk about stupid thinking. Yes we should reduce pesticides, soil erosion, etc., but there are many options for doing so. Why aren't we exploring some of them? Because the Monsantos and Millers of the world are too busy putting profit and control above all else.

I have zero time for this guy and am annoyed at myself for even responding.

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Ian Percy, President, The Ian Percy Corporation

John Mackey must be crying all the way to the bank while listening to Henry Miller criticizing—and naming—his "conscious capitalism." I'm rather certain Mackey would prefer hearing a phrase such a "magic marketing."

All good ideas, whether from a PhD or a moron can be controversial. One should decide if they prefer Ideals to Ideas and then either keep in the "L" or drop it.

Whole Foods, ethically or not, have developed a business model that is working successfully ... possibly better than the technologically-sound one suggested by Henry Miller. I am reminded that there is possibly only one quality worse than the labeled hardness of Whole Foods's heart that is the softness of the learned head.

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Gene Hoffman, President/CEO, Corporate Strategies International

I have no idea whether Dr. Miller's opinions about GMOs are accurate or not. But he chooses to turn what could have been a factual discussion about the matter into a quasi-political screed, complete with ad hominem insults about Whole Foods's management. (Start with the headline, proceed to "airy-fairy"...you get the picture.) Whether you agree or not on the GMO issue, Whole Foods is a business with a point of view about food sourcing, and that's part of its formula for success.

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Dick Seesel, Principal, Retailing In Focus LLC

Surprised such an incendiary article gets additional press. They are morons, and their quest for press deserves none in return.

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Bob Phibbs, President/CEO, The Retail Doctor

This criticism feels mean-spirited to me. I don't think it reflects the sentiment or the cultural movement of American citizens who value clean food, slow food, and the power of local economies. These are proud traditions that America was built on. We as a nation were much healthier in physical and economic ways before the industrialization of food and big grocery retailing.

I'm troubled by this disconnect with the changing tide of many American people from a supposed big thinker.

I believe Whole Foods stance on GMOs is progressive and has the better health of the nation's people at heart. Whole Foods gets support from my heart and my wallet.

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Anne Howe, Senior Vice President, Shopper Solutions, part of Acosta Mosaic Group

I think Whole Foods would be less successful if they took Dr. Miller's advice. His comments have merit, however. Mr. Mackey and Robb have found a way to get rich and create a high stock price with their business model. I would never second guess there methods.

In my opinion 99% of business people would fail following Whole Foods business model. Mackey and Robb cracked the code while most others have failed. There are a lot of regional, privately-held grocers who have been operating as conscious capitalists long before Whole Foods opened. Perhaps only 20-30 left in the country. Whole Foods is the rare exception being a publicly-held company.

David Livingston, Principal, DJL Research

Are you giggling? I'm giggling. Perhaps even guffawing. Is this a real issue?

As a pre-med student, I learned a lot about the human gastric system. GMOs are chemically broken down and digested just like anything else we consume, and nothing from them is contributed to our DNA or the DNA of our future children. It's scientifically impossible. GMOs do not become systemic in our bodies, just as Alar was never systemic in apples.

Sometimes (sometimes?) writers write weird stuff to attract attention. This is one of those times.

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M. Jericho Banks PhD, President, CEO, Forensic Marketing LLC

Mr. Miller is, to put it delicately, a moron. It's particularly cynical of him to suggest that people go into business purely to make money, with no grander goal. I'm sure he's proud of himself for understanding the motives of business leaders better than they themselves know them...NOT.

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Cathy Hotka, Principal, Cathy Hotka & Associates

Wow! Personal attacks are not related to a discussion of business issues. A discussion of the pros and cons of certain types of pesticides may be an interesting discussion, but that is not what this article is about. Clearly Dr. Miller is not part of Whole Foods's target market, so his views will only be marginally relevant.

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Camille P. Schuster, Ph.D., President, Global Collaborations, Inc.

Whole Foods is a brand. This brand is all about having a point of differentiation, even if implied, a certain culture, and and a particular ethos. It is what it is, and from a pure marketing point of view, it's well executed.

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David Biernbaum, Senior Marketing and Business Development Consultant, David Biernbaum Associates LLC

I am not sure why we have arrived in an either/or world. On one hand we argue that 'organic' is the only acceptable choice, while others argue that 'organic' is moronic.

Food "conservatives" such as Miller have some valid points about GMO, etc. and environmentalists have many true points about organic. I would prefer each camp to stress the benefits of their position rather than denigrating the other camp, and then let the educated consumer make a wise choice.

But I guess, that's just wishful thinking.

Rynder Klomp, Managing Partner, Klomp Retail Solutions

I think it would be disingenuous of Whole Foods to reverse its stance on GMOs. They'd end up losing quite a bit of credibility among their customer base, most of whom see GMOs as unsafe (at best) or dangerous (at worst). GMOs may actually be beneficial to the environment in the long run, but right now too many WF shoppers believe the dangers GMOs (may) present to themselves and their families are too great to buy them. Besides, a good deal of the issue revolves around LABELING GMOs; I may not agree with most WF shoppers about GMOs, but I would like my foods to be labeled, so I can choose what I want to buy.

My main issue with WF doesn't have much to do with the management's ethics/beliefs; instead I find the stores way too difficult to shop, the aisles too narrow and cluttered, and the prices out of line (though some of their PL products are reasonable).

I avoid WF like the plague because it's always a hassle to shop there.

'nbbauer63'

Online rants are a dime a dozen these days, and that is what I consider Miller's opinion. The world could use a few more idealists that are motivated to do the right thing, not just the right thing for themselves. The world could also use a few less vocal cynics with an agenda.

Kurt Seemar, President, Analytic Marketing Innovations

If you don't stand for something what contributions are you honestly making in the world and why would people follow you?

I strongly disagree with Dr. Miller. Mr. Mackey and his team at Whole Foods have taken a strong stance on a topic. When you do that, it builds a tribe of followers (as our friend Seth Godin would say). It was clearly differentiates Whole Foods from its competitors. If Mr. Mackey didn't take a clear unwavering position, what platform would he compete on? Price? Assortment? Convenience? All would be NO.

If Mr. Mackey's position was "wrong," he would not have a tribe and needless to say would not have a business. The free market says Whole Foods position is a solid differentiator to competitors, just like low price is for Walmart.

Keep up the good work Mr. Mackey!

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John Boccuzzi, Jr., Managing Partner, Boccuzzi, LLC

Honestly, I'm surprised to see RetailWire giving additional publicity to such fringe and meaningless criticism. Yes, I clicked on the link and read the article, so you managed the "shock value" clickthrough. But it left my opinion of RetailWire a bit tarnished as a result.

In terms of the actual content, Miller's assertions are nonsense. Whether or not GMOs are the saving grace of agriculture or the toxic destruction of the planet (or more likely, somewhere in the middle...), shoppers have strong opinions about them. Just like they do about fashion trends, flavors they like, iPhone vs. Android, etc. Asserting that a retail chain shouldn't take a position to appeal to their customers is utter nonsense, and if the point of this piece is to establish Miller as a credible expert in anything to do with retailing, he failed miserably.

He should confine his comments to topics where he has competence. Critiquing retailers is not one of them.

Jim Crawford, Principal, Taberna Retail

Dr. Miller is brutally honest, athough what he knows about running a supermarket may be called into question. He is rough on Whole Foods's senior management for saying all the right things to the demographic the company is aiming for. How long that demographic remains a viable consumer group will be about as long as Whole Foods retains its high-flyer status. We might see a parallel with the solar industry jumping on the carbon reduction bandwagon—with a lot of help from the government—and then finding that end users weren't buying the rhetoric."Conscious capitalism" is a great marketing theme and Whole Foods is using it well. That is why, as Gene Hoffman says, John Mackey is "crying all the way to the bank."

Anyone who objects to the subject matter of today's discussion apparently doesn't want to look into topics outside his or her own comfort zone. Such vituperative remarks in this forum are, fortunately, rare but still unseemly.

David Schulz, Contributing Editor, HomeWorld Business

My daughter is earning a masters in food science. I doubt Dr. Miller has much education in this space. Either way, he's entitled to his opinion. I'm amazed that he would resort to name calling when Mackey has obviously built a successful business (regardless of Miller's belief).

In addition, it's hard to be generous and philanthropic if you don't have money. If this is Macky's route to charity, kudos to him. I don't care what political affiliation you are, giving to charity is honorable and should not be criticized.

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Janet Dorenkott, VP & Co-owner, Relational Solutions, Inc.

I just really have to question who the moron really is here. Seems that Miller claims conservative yet writes liberal. When a company just posted a resounding increase in sales performance and is on a warpath in a down economy, and they don't fit the old establishment profile, some bum has to kick their tires.

WF would be less successful listening to Miller—and you can't even call it "advice."

'thunder1'

Dr. Banks' comments must be addressed. Advocates of GMOs may claim no harm to human health, and they may, in the long run, be right about that point—but it's still too soon to know. What's far more important is that GMOs are dangerous to the future of human life on earth. I wonder how any of the scientists working on GMOs for Monsanto and similar companies can sleep at night. With nearly all of Iowa and Nebraska being planted with one, and only one, type of GMO corn or soy, all it will take is one little tweak of evolution (and yes, evolution should be a familiar subject to food scientists, who, one assumes, would have a grounding in biology) to wipe out an entire crop, causing North Korea-style famine right here in America. That's the BIG danger from GMOs. We must not accept monoculture.

Unfortunately, Monsanto has such a tight grip on U.S. agriculture (including the Department of Agriculture, regardless of who is in the White House, R or D), that our doom is probably already written. But, in the name of all that is holy to the likes of Mr. Miller, Monsanto shareholders will surely not suffer when the end comes.

That such balderdash could come from the Hoover Institution should not surprise anyone. This is the branch of conservatism that represents that movement's past, not its future.

I may not agree with all of the Libertarian political views of John Mackey, but his Conscious Capitalism is a must-read for anyone who still thinks that the only purpose of business is (and should only be) profit. The world cannot be run by the likes of Ebeneezer Scrooge, not if we're to leave it a better place for our descendants. Run rightly, business can help change the world for the better—but only if it is run with a higher purpose in mind. By requiring suppliers to go GMO-free, Whole Foods Market has led the way; I sincerely hope it will prove to be the tipping point that will force the public to confront Monsanto's political machine and say "no more!"

'historymystery'

Regarding GMOs, there are arguments and "evidence" on both sides of the issue. As always, shoppers will decide with their pocketbooks. They have done so in Europe where GMO foods are clearly labeled as such. Shoppers have "choice" and there is "transparency." Isn't that what the Millers of the world preach in all things?

Whole Foods has taken a strong position on GMOs. Good for them. I saw Mr. Mackey speak at the recent IRI event. He came across clearly as a stand-up guy.

GMOs in Whole Foods? No way. Let the suppliers react and let the shoppers decide where to buy their groceries.

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John Karolefski, Editor in Chief, CPGmatters.com

I am somewhat disconcerted by the open hostility expressed here today against Miller and apparently all GMO. Almost the entire second page of Miller's opinion piece dealt with easily verifiable worldwide benefits of GMO crops including being able to feed billions more of the world's poorest people, fewer crops completely lost to pestilence, and today, because of GMO, far less sprayed poison/bug killer in the atmosphere we all breathe into our bodies. Yet few commenters seemed to acknowledge or address any of that.

I happily shop at Whole Foods for some things and utterly reject their outrageous prices for many other things which I then purchase elsewhere. So, I give Mackey full credit for identifying a specific market in certain specific geographic areas to which he can appeal and serve. He is clearly not a moron, but a very successful and savvy niche merchant. Nothing more. Nothing less.

I suspect I am in the same boat as most of us if we are being honest—I have absolutely no idea if it's just successful marketing differentiation, or whether Mackey actually believes his stance on GMO.

'Liatt'

I am saddened that the way supposed industry experts and credible academics choose to embrace a discussion is by calling someone with an opposing viewpoint a moron. When did we throw tolerance out the window and subscribe to talk show sensationalism, putting a good headline ahead of substantive conversation?

Putting aside the issue itself for a moment, I would be embarrassed if I were Mr. Miller. I discount his point-of-view based on his apparent inability to state his case in a mature and equitable manner.

As to the issue itself, I think most of us agree that living up to brand promise is good for business. Whole Foods would be expected to support natural food origination, correct? And, our free society allows people like Mr. Mackey as well as others (Ben and Jerry's comes to mind) to create a business model based on their beliefs and to stick with them.

The consumer always decides the merits of arguments such as this one and people like Mr. Miller should remain on the sidelines unless he can more professionally state his point of view.

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Bill Hanifin, Managing Director, Hanifin Loyalty LLC

Tangential to the question, about 15 years ago in a previous life, I facilitated a study of GMO soybeans with university researchers. We were measuring the impact of environmental factors on protein quality using infrared spectroscopy—looking at the light signature of each protein. The ground studies were compared to aerial infrared photographs of actual fields. We observed that GMO fields "lit up" compared to non-GMO fields; visibly different for some reason. One of the hypotheses was a "luminescent" gene may have also been inserted along with the pesticide resistance gene. That would allow for (and explain) aerial fly by to identify where farmers around the globe had planted "stolen" seed which would then be policed by on-the-ground enforcers to collect licensing payment.

There is an important need for conscious capitalism, if for no other reason, than to protect capitalism from itself... Thumbs up for Mackey.

Frank Beurskens, CEO, ShoptoCook, Inc.

Some of the comments on this forum sound like they've been taken from "Political Correctness for Dummies." I don't know much specifically about GMOs but I do think it is incredibly naive of people to think that every corporate manifesto to the effect that "we are capitalists to do good first and make profits second" is actually believable.

I have spent a lot of time going through the corporate responsibility manifestos of the world's top retailers and, sorry to most of the people on this forum, but they are mostly just window-dressing for the Gen Yers. That is not to say they don't believe in sustainability, fair wages and fire-proof Bangladeshian sweatshops, but hey, they're in it for the money. Social responsibility just helps the bottom line.

Michael Baker, Principal, Baker Consulting

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