Whole Foods debuts good, better, best rating system for produce

Discussion
Oct 17, 2014

Whole Foods wants to tell you what you should consume. The natural and organic grocery chain introduced a new rating system on Wednesday known as "Responsibly Grown," which labels the produce and flowers it sells as good, better or best based on its assessment of the farming practices of the companies that supply its stores.

The goal of the Whole Foods program is to qualify the products it sells with reference to their impact on the environment and human health. The company is initially rating products from key suppliers that make up more than 50 percent of the produce it sells with plans to reach 100 percent over time.

"After three years of research and planning, Responsible Grown is the result of our collaboration with suppliers, scientists and issue experts to continue our strong commitment to organic, while embracing additional important topics and growing practices in agriculture today," said Matt Rogers, global produce coordinator at Whole Foods, in a statement. "We are excited to broaden the conversation to recognize additional growing practices and drive more transparency in the industry."

Vendors can earn a good rating by passing 16 steps established by the chain. Suppliers from outside the U.S. must adhere to the U.S. Environmental Protection Agency’s rules for pesticide use. The use of irradiation is not allowed and suppliers must agree to be transparent on GMOs.

[Image: Responsibly Grown]

Earning a better or best label includes higher scores in categories such as:

  • Pest management (using good bugs to eat bad ones)
  • Farmworker welfare (providing workers with equipment to protect their health and safety)
  • Water conservation
  • Soil health
  • Waste reduction
  • Renewable energy

Altruistic tendencies aside, the goal of Responsibly Grown is to provide Whole Foods with a point of difference with other grocery stores looking to grab share in the organic foods market. The company has been pushing back against competitors with more aggressive pricing, a national marketing campaign, home delivery in concert with Instacart, as well as the continuing rollout of a loyalty program.

What do you think Whole Foods will accomplish with its Responsibly Grown rating system for produce and flowers? Is it realistic to try to encapsulate all sustainability concerns in a useable ratings system?

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16 Comments on "Whole Foods debuts good, better, best rating system for produce"

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David Livingston
Guest
3 years 2 days ago

When your worst rating is “GOOD” it seems a bit misleading. If it was me I would rate every item as “BEST.” If it’s good enough to be sold in Whole Foods that alone should be good enough. Why make the customer over-think their purchases?

Ken Lonyai
BrainTrust

This new program has spread across the media like wildfire, but my feeling is that Whole Foods’ customers’ buying habits won’t be that affected by it. It’s unlikely that the rating system will be a driver of new customers to their stores. The company already serves the demographic that seeks out organic, “healthy” and green-minded vendors, so while they will appreciate the added information and it may change the make-up of their basket, it won’t particularly increase purchase size.

As a differentiator amongst competitors trying to cannibalize Whole Foods customers or as a tool to attract shoppers away from rivals, meh. Managing price and selection are likely to have far better impacts than this.

Steve Montgomery
BrainTrust

Whole Foods’ Responsibly Grown label’s first impact on their produce business will be with its existing customer base, who may change their buying habits. Admittedly I am not a Whole Foods shopper so am unaware of its current produce pricing but it would appear there could be up to four product/price levels (high-grade conventional offerings and good, better, best organic items) that all look the same. Depending on the price differential Whole Foods may find its customers are hesitant to pay the price that come with its higher rankings.

I doubt the Responsibly Grown label will have any significant impact on customers looking for lower-cost organic produce. In many (if not most) cases they are not part of Whole Foods’ customer base and this program will not be sufficient to attract them.

Roger Saunders
BrainTrust

Impossible to completely answer the second question, as the Environmental Protection Agency seemingly issues a new regulation each week.

However, Whole Foods’ efforts deserve applause for meeting their own consumers’ interests and requests. Whole Foods continues to grow their allegiance among adults with household income of $75,000-plus, as well as married Millennials on a year-over-year basis, based on the August Prosper Monthly Consumer Survey, as they have increased their share in those respective audience segments.

That loyalty extends to the produce area. 90.2 percent of Whole Foods shoppers state that they buy their produce most often at the store they do most of their grocery shopping. While holding these folks in the store for produce, it is important to note that 80.4 percent of Whole Foods shoppers say they regularly buy organic products, and 70.1 percent of their shoppers buy organic produce.

Whole Foods is both listening to the consumer and offering them what they want with this move. That establishes loyalty and long-term trust.

Naomi K. Shapiro
Guest
Naomi K. Shapiro
3 years 2 days ago

Gosh, I think it can be confusing. And what effect will this have on the suppliers? A bad name and bad feeling if they don’t meet the highest standards, or will they not do business at all? And what effect will this rating system have on the prices—high, higher, highest?

Alan Lipson
Guest
Alan Lipson
3 years 2 days ago

Based on what I have read about the new rating system it focuses on the processes that the farmer uses as well as their impact on their environment and treatment of their employees, rather than on the quality of the produce itself. Note that all of the grades have to meet the minimum requirements for the following: 16 farming practices to protect air, soil, water and human health, no Whole Foods Market-prohibited pesticides, GMO transparency, no irradiation, no biosolids.

This will allow their consumers to make decisions on what produce to purchase much like investors that want to purchase stocks/funds of companies that have certain characteristics.

I’m not sure that this will draw many new customers to Whole Foods that aren’t already there. However for those consumers already shopping at Whole Foods it provides another layer of transparency and helps them feel good that they have made what they consider the right decision as to where they shop.

Kelly Tackett
BrainTrust

With the new ratings, Whole Foods is looking to differentiate its assortment from that of mainstream grocers who have entered the organic and healthy living space.

Although Whole Foods has the authority and credibility to make the rating system meaningful, once again the retailer is playing catch-up. Walmart’s recent announcement around food sustainability comes to mind.

Additionally, I already have concerns about whether the current supply of organic product is sufficient to meet swelling demand. Asking suppliers to comply with additional guidelines to participate in the Responsibly Grown scheme has the potential to drive production costs higher and further accentuate the disparity (both real and perceived) about the price of Whole Foods organics versus that of the competition.

Gajendra Ratnavel
BrainTrust

I think this will help the staff out a great deal. I am shocked by the amount of time the staff gives to each customer. They literally walk with you for as long as you need answering questions. They are very knowledgeable as well. I think the rating system will help customers pick the product without involving the staff.

This also helps enhance the image of their commitment to providing the highest level of products to their customers.

This has to be annoying to their suppliers though.

Carol Spieckerman
BrainTrust

This we-did-the-homework approach should come across as being quite customer-centric to Whole Foods’ loyal shoppers and helpful to the rest. Any consumer familiar with Whole Foods will get it that their “good” is better than most others’ “best” and this is a great way to make room for various suppliers without forcing all of them to adhere to stiflingly stringent requirements. I like it.

Ben Ball
BrainTrust

What do you think Whole Foods will accomplish with its Responsibly Grown rating system for produce and flowers?

They will aggravate and confuse both customer and supplier.

Is it realistic to try to encapsulate all sustainability concerns in a useable ratings system?

No.

Lee Kent
BrainTrust

This campaign certainly shows Whole Foods’ commitment to their products and the level of vetting they go through. To the consumer who is serious about their organics, this would be very reassuring and a differentiator that would set Whole Foods apart from the also-rans.

Here is an aside that might help. I was recently looking for a nutriceutical and asked my Doctor what brand he would recommend. He said that there are many great products available but he suggested I go to Costco. Why? Because of the level of vetting they do on their products. They have done the homework.

With that said, I think this is a very good move for Whole Foods and would expect them to go the extra distance.

… and that’s my two cents!

Gene Hoffman
Guest
Gene Hoffman
3 years 2 days ago

Whole Foods wants to set itself further apart
With Responsibly Grown produce and flowers.
Great! – but if the Best produce is no Better than Good
Will the buying process create guilt and take hours?

Bettendorf ‘s, the grand lady in old St. Louis, sold fresh product
Graded Good, Better and Best and priced them thus.
Consumers decided three grades weren’t really there
And the program of that fine retailer was a small plus.

To wit: What customers will see and seem
In Whole Foods new rating system scheme
Will possibly be but a dream within a dream.
But to many it will be all they want it to seem.

Warren Thayer
BrainTrust

Many consumers will feel guilty if they don’t buy “best” for their families, so it might help raise Whole Foods’ dollars and margin. But mostly it will make consumers over-think their purchases and confuse them, adding a touch of angst to the shopping experience. Vendors, already unhappy about the hoops they have to jump thru to get on the Whole Foods shelf, will be, well, unhappier. Expect shortages and price increases. All rating systems so far have been open to interpretation and indignation, so I expect nothing different here. Yes, some shoppers will in fact like this, and it’s done with the best of intentions, but all in all, it won’t have any significant effect one way or the other.

George-Marie Glover
Guest
George-Marie Glover
3 years 2 days ago

If this is customer driven, it will work. If not, it’s a waste of time.

Robert DiPietro
BrainTrust

It will simplify the selection process for the consumer with new rating system, but will the rating system change over time and the underpinnings be too complicated to understand for the consumer?

It won’t address all the concerns, but I think of it this way: Google has a healthy rating system in its office *when I was visiting* for snacks—green label healthy, yellow not so much, red label junk. If that system works for some of the brightest in that space, why not for Whole Foods consumers?

gordon arnold
Guest

Many of their customers expect only the best and are not looking for an education in anything. This may backfire a bit in a way they will regret.

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