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Green Grocer

Fresh taste, better nutrition, environmental awareness, healthy profits—can Walter Robb and Whole Foods get them all in the bag?

Photo: Michael Winokur

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By Joan O'C. Hamilton

Plenty of male executives sport a scruffy chic. Think Larry Ellison’s finely trimmed stubble or Steve Jobs’s iconic mock turtlenecks and faded jeans. But there’s nothing affected about Walter Robb’s open-necked cotton shirt and work boots as he sits in his office at Whole Foods Market Inc. in Emeryville, Calif. His look is consistent with a guy who loves roaming produce markets and talking to farmers, and who’s been tilling his own organic gardens and harvesting fresh carrots for dinner since he was a Stanford undergrad.

In fact, Robb, who graduated Phi Beta Kappa in 1976 with a degree in history, is far more apt to quote environmental philosophers and sustainable-development economists than management gurus. Robb, 53, uses phrases like “deep purpose” and “right livelihood” with unapologetic passion. As co-president and COO of Whole Foods, he is part of an unusual six-person management team in which each earns an equal amount. The company explicitly caps that salary at 19 times that of the average Whole Foods worker’s when, in recent years, CEO pay typically is several hundred times average-worker pay.

For all that, Robb and the Whole Foods team are card-carrying capitalists and fearless seekers of profits, and their story is one of remarkable business success. The company grew from a single Austin, Texas, store opened in 1980 to the 190-store chain that now operates in the United States, Canada and England. It’s attempting to get regulatory approval on the acquisition of the Wild Oats grocery chain, with its 100-plus stores. Whole Foods earned $200 million on sales of $5.6 billion last year.

More than anything, Robb says he’s proudest that the success of Whole Foods has fostered a growing appreciation and demand for fresher, more healthful foods. “I do this work because I really believe we’re making a difference. We’re leading the food industry. Whole Foods is a mission-driven business. We’re here to change the way the world eats and to create a workplace based on love and respect. You don’t run a business for shareholders. That model is broken.”

But with the growth Whole Foods has enjoyed, it’s no wonder competitors like Safeway, Wal-Mart and others have been increasing their organic product offerings—and threatening Whole Foods’ healthy margins. The company is entering a challenging period, and Robb is anything but California mellow about that. “We may have more mindshare, but we have 191 stores; Safeway has 2,500 to 3,000. For everything we’ve accomplished, we still have a long way to go,” he says.

Whole Foods was started by John Mackey, a Texan who remains CEO today. (He originally called it “SaferWay” as a jab at the Pleasanton, Calif.-based grocery behemoth.) The business both tapped into and helped stoke a growing population of food-conscious consumers who increasingly reject pesticides, herbicides and food additives, and who care about the environmental impacts of their foodchoices.

“We’re at a moment of change in our culture about food,” says Julie Kaufmann, ’83, a food editor at the San Jose Mercury News. She points to the increasing number of reader queries that ask not about recipes, but about organic produce sources and the pros and cons of shrimp farming. “We’ve gotten so much more sophisticated about food as a culture. A growth in ethnic diversity has brought new foods. You see the rise of celebrity chefs. You see companies like Kaiser Permanente sponsoring farmers’ markets,” she says. Wal-Mart’s announcement in 2006 that it would begin offering organic foods “is a marker of how far the conversation has gone.”

“Conversation” is a big part of the Whole Foods experience, and Robb pays attention to the store design and ambience—he calls it the “art and theater of retailing”—that encourage it. “I’m a grocer and I love it,” he says. “I have learned to appreciate the opportunity I can provide on a busy Saturday morning. It creates community and connection. The store becomes a canvas on which you can paint your deeper purpose and values.” Mackey calls Robb “the most talented food retailer I have ever known.”

Most Whole Food stores are not radically different from those of other big modern chains—they have large, open, fresh produce bins (although, depending on the season, they contain 40 to 70 percent organic produce), gleaming bakery cases, extensive salad bars and take-out meals, even in-store cafes and kitchens set up for cooking classes. What is different is the amount of information served up alongside the free samples of organic teas or hormone-free cheese. The background, farming methods, political and humanitarian issues of the food for sale are as much a part of the Whole Foods experience as the price tag and calorie count. “Bananas with a Conscience,” reads one of dozens of pamphlets, posters and shelf signs around the store. “When you buy Earth University bananas,” the pamphlet continues, ”you support sustainable agriculture, ethical business practices and a sustainable living for farmers in poor, rural areas.” Signage shows pictures of local food growers and the stories of their farms; what’s fresh and local on any given day is often written on chalkboards throughout the store. Other material illuminates issues ranging from animal compassion to methylmercury in seafood.

The price for purity is evident as well. At the Las Vegas store in March, the conventionally grown asparagus from California cost $2.99 a pound and the organic asparagus was $5.99. Whole Foods’ prices typically exceed those of other grocery chains (earning the store the nickname “Whole Paycheck”), although it has been expanding its “365” brand of organic products, which are more competitively priced.

That Whole Foods has won over a growing number of shoppers who will pay that kind of premium for organic produce, held tight to its unusual management structure, consistently ranked high on the Fortune list of the best companies to work for, and still produced earnings that made it a Wall Street darling since it went public in 1992, is quite a feat. But as Whole Foods learned in the past year, darling is one of the most dangerous endearments in high finance. Despite steady sales growth, the company’s stock is trading in the low 40s after topping $70 in 2006.

Some of the blame for that drop, Mackey and Robb contend, comes from what they consider an unfair broadside from food writer Michael Pollan, a UC-Berkeley journalism professor. In a chapter of his 2006 bestseller, The Omnivore’s Dilemma: A Natural History of Four Meals, Pollan dubbed all the storytelling that takes place in the marketing of Whole Foods wares “supermarket pastoral.” He also accused Whole Foods of vaguely misleading customers, suggesting that more and more Whole Foods food is coming from big or “industrial” organic farms that are not necessarily better than conventional farms in terms of food quality, worker experience, animal health or impact on the environment. “Supermarket Pastoral is a most seductive literary form, beguiling enough to survive in the face of a great many discomfiting facts,” Pollan wrote. Robb says Pollan’s book also triggered journalistic piling-on: a spate of media articles such as a February 28 New York Times story whose headline asked, “Is Whole Foods Straying From Its Roots?”

Such criticisms have been hard to swallow for a company that made its name as an advocate for health and the environment and family farmers. Mackey handled Pollan’s charges head-on. He published a lengthy blog entry on the company’s website, and he appeared with Pollan, who had not interviewed executives at Whole Foods in advance of the book, at a Berkeley journalism school event in February that drew a crowd of 2,000 on a rainy winter night. “You’ve exaggerated the idea of ‘industrial organic,’” insisted Mackey, adding that more than 70 percent of his stores’ organic produce is purchased from family and independent farms. Pollan was mostly genial at the event, praising Mackey’s “willingness to engage with critics.” He wrote a letter to Mackey, published on their respective websites, that said, “Nothing would please me more than to conclude that I owe you and the company an apology. I’m not quite there yet.”

“Michael Pollan showed a stunning lack of historical perspective,” Robb says. “As recently as 1989, there was no organic industry the way we understand it now. Whole Foods had 11 stores. The Organic Food Act was only signed in 1990.” He notes that only 2.5 percent of the nation’s food supply is organically grown, and that the industry’s hope to make it 10 percent by 2010 represents a significant stretch.

Were Whole Foods not providing a distribution and marketing channel for organic producers, producers would have little incentive to convert conventional farming to organic, or start new organic enterprises. Whole Foods is the biggest client at medium-sized Happy Boy Farms in Freedom, Calif. Bekki Bolthouse, coordinator of sales and distribution, says that because Whole Foods is willing to buy heirloom tomatoes, herbs and leafy greens directly from Happy Boy, “We get a higher price point for our produce. This contributes to our viability as a company, our sustainability, and our capacity to supply more and more stores, restaurants and farmers’ markets with high quality, fresh, local and organic produce.” However, the United States is not filled with Happy Boys. Any grocery chain that wants to achieve nationwide scale must ensure a consistent supply of products customers want and expect. For Whole Foods that means it also must buy from “industrial” organic producers, giant concerns such as California’s Earthbound Farms or Washington’s Cascadian Farm (owned by General Mills).

That said, Robb acknowledges that Whole Foods took some of Pollan’s criticisms to heart. It now pays closer attention to updating store signage so that it reflects a store’s current suppliers. It set up a $10 million loan program for family farmers, and a $30 million venture fund to invest with food artisans. “Whole Foods continues to evolve. The challenge,” Robb insists, “is to keep raising the bar. There is more competition than ever and we have to keep focused on standards and transparency, raising the bar for local food, animal compassion . . . . We have to keep being willing to lead from integrity.”

It’s hard to question Robb’s long-term commitment to healthy foods. Born and raised on the East Coast, Robb was a dedicated student and soccer team captain at Stanford, but among his friends and professors (who knew him as “Robbie”), he was known for his interest in ecologically sound eating. At Stanford, Robb became interested in the work of economist E. F. Schumacher (Small Is Beautiful), activist Francis Moore Lappé (Diet for a Small Planet) and biointensive gardener John Jeavons, founder of Ecology Action of the Mid-Peninsula. He started growing some of his own food, and his former roommate and soccer teammate Bob Geiger, ’76, says he had to endure some pretty gnarly meals until Robb gained expertise in the kitchen. “He would make the most horrible things,” Geiger says, laughing. “At one point I think he put a whole trunk of ginger in something. But he was so passionate about wanting to do this. Once it took hold of him there was never any doubt it would become his livelihood.” Robb “once caught me eating a hamburger in Tresidder and insisted on cooking, with his girlfriend, a more healthful lunch for me,” says William Todd, who was Robb’s honors thesis adviser at Stanford and now is a professor of Slavic languages and literature at Harvard.

After Stanford, Robb’s first stop was Atlanta, where he and his former wife, Emily Wilkins, ’76, taught high school to inner-city kids—and planted an organic garden that the students helped tend. They came back to California and worked in his wife’s family’s almond-growing business, eventually moving to Trinity County, where Robb started a health food store called the Mountain Marketplace.

Robb’s three children, Ted, Abigail and Chris, recall those years fondly, although they joke that theirs was the house where pals rarely wanted to stay for dinner, thanks to their parents’ devotion to organic food. “We were the kids eating cod liver oil and bee pollen. We’d have to go to my friends’ house for Cocoa Puffs,” admits Ted Robb, 27, a filmmaker. “There was a famous family story involving squash soup,” recalls Abigail Robb, 25, who works with her mother in a business that imports organic oils from jungle regions. “I had several friends over and I think one of them actually cried about having to eat it.”

After 10 years running the store, Robb and his wife divorced. Moving to the Bay Area with his children, he managed a small natural foods chain for several years and in 1989 started to open his own store in Mill Valley. But his longtime friend John Mackey convinced him to swap the lease of his new store for equity in Whole Foods and sign on as store manager. “I had no idea at the time we acquired the lease and hired Walter that he was going to be as great a retailer and leader,” said Mackey in an e-mail. Robb soon became president of the Northern Pacific region. He became the corporation’s co-president in 2004.

Originally, as Robb explains, the challenge was simply to convince buyers of the desirability of organic food. It took years to get certification standards developed—most focused on keeping things like pesticides, herbicides and additives out of food. Over time, however, the issues have broadened. For example, animal rights activists increasingly oppose the conditions under which cattle, chicken and other food animals, even those designated “organic,” are raised. (Mackey, a vegan, startled the Berkeley audience by showing a video about abusive animal conditions in the food industry. He has been pushing for new forms of certification that would reward the most compassionate producers.)

But the rise of the “local food” movement represents one of Whole Foods’ most interesting challenges. Using only local suppliers, proponents argue, would decrease the fossil fuels used in shipping; support diversified agriculture and family-farm culture; and improve nutrition because foods would not need to be bred for their keeping qualities or their ability to withstand shipping. Brian Halweil, a senior researcher at the Washington, D.C.-based think tank Worldwatch Institute, also perceives a “desire by people everywhere to develop a closer connection to their food.” Halweil, ’97, is the author of Eat Here: Reclaiming Homegrown Pleasures in a Global Supermarket. He says he has been impressed with Whole Foods executives’ willingness to try to expand local food efforts, including setting up farmers’ markets at many stores. “The most progressive companies tend to get criticized,” says Halweil from his home in Sag Harbor, N.Y. Whole Foods has “changed the way we think about food . . . and they can do more.”

Buying local can be very difficult for all the stores in a nationwide chain. Certainly there is no local crop of asparagus in the desert at Las Vegas. Long Island is bursting with fresh vegetables in the summer—but not the winter. “It’s clearly a utopian view that local food can feed the entire world,” Robb says. Or at least a developed world that’s grown accustomed to eating a wide variety of foods year-round.

According to Professor Hau Lee of the Graduate School of Business, large companies grappling with conflicting pressures like these are driving attention to “green” supply-chain management, the science of analyzing all the different environmental inputs that go into a given product. “Farming method is just one input,” he says. “You have to count transportation, containers that need refrigeration, spoilage, water usage. You may excel in one dimension and lose in others.” Such analysis involves always offsetting benefits and drawbacks. There are virtually no “simple” choices, he adds.

So when, earlier this year, Time magazine published a cover featuring a red, ripe apple and the headline: “Forget Organic. Eat Local,” Robb felt a familiar frustration. The story was one reporter’s journey to sort out whether it was better to buy organic or support mainstream local farmers. “I don’t accept that fundamental premise,” Robb says. Rather than pit one group against another, he says, producers and grocers need to work together to convert as much food production as possible to organic. Halweil, who notes that New York has lost more than 70 percent of its family farms in the past 50 years, makes a different point: “If you have the choice, buy local, because if you don’t support local farmers, you’ll lose the opportunity to help that grower go organic later.”

For Robb, grappling with these questions is part of a life of questioning that he first embraced during the 1970s on the Farm. “It was one of the richest times of my life. Stanford was such a stimulating place, with different cultures, people, and thoughts from all directions.” Robb still recalls the test question on his senior final for Professor Jerry A. Irish’s religious studies class. “ ‘In what or in whom do you find guidance for the conduct of your life?’ . . . Talk about an education that challenges you to live your life by your principles.” For that, his son Ted gives him an A: “He’s the real deal. He’s very efficient and he’s not a pushover by any means. But he really cares about love and compassion in the workplace, and it thrills him to connect with people. I can’t tell you how many times I’ve gone into a store and had the assistant butcher or somebody come over to me and tell me about the note my dad sent him the day his daughter was born 12 years ago.”

Robb recently was asked to join the Stanford Humanities Center’s Advisory Board. Former mentor Todd recommended him for the job, mindful not only of Robb’s accomplishments at Whole Foods, but also the depth of thinking Robb showed as a student. “In those days relatively few Stanford undergraduates wrote senior theses, and his took on a philosophically challenging subject, tripartition of the soul [into reason, will and emotion] in Plato, St. Thomas Aquinas and Dostoevsky,” Todd recalls. He cites some of Robb’s conclusions to his students even today.

Whatever insights Robb has offered Harvard’s Russian lit students second-hand, there’s no denying he’s part of a revolution in food retailing that will impact us all. Robb says he’s energized by the growing interest he sees in more ecologically sound food choices and business practices. “It falls on this generation to take sustainability and really mainstream it. I see that in the idealism of [young people today] and it’s really exciting. It’s like landing in a conversation that feels very familiar again. It makes me feel hopeful.”


JOAN O’C. HAMILTON, ’83, is a frequent contributor to Stanford.

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