At Whole Foods, New Ventures With Locals

MINA WILLIAMS

SEATTLE — Whole Foods Market's Northwest group recently set out to search for potential vendors, hosting a grower and supplier seminar that detailed how the chain is working with small local vendors.

The chain “is actively searching for Pacific Northwest vendors who are interested in partnering with us to create future natural food and product retailing experiences for our customers,” according to fliers for the event. “Specifically we're looking for companies that are passionate about producing the highest quality, unique, natural and organic foods and produces made in the communities we serve.” The group has units in Washington, Oregon and Vancouver, British Columbia.

Growers, manufacturers and suppliers who attended were asked to provide product samples, the story behind their businesses and facts about the business, including where products are currently sold, the volume of production and whether they had UPCs.

The daylong session opened with a description of data handling and Whole Foods Market's general system. Attendees were walked through how to acquire and manage UPC coding, labeling regulations, insurance, organic standards and the states' and province's weight and measure requirements.

Executives talked about growers, manufacturers and suppliers delivering product to two or three stores, or working out a relationship with wholesalers Whole Foods Market currently uses. “We can take on products in a strictly local sense, if you can get product to our back door,” one said. However, when it came to the one-on-one vendor and buyer meetings, one buyer indicated that he was looking for consistent sizes of grown products in consistent quantities for the entire region.

At the gathering of about 100 potential vendors, buyers discussed category management. Whole Foods' staff identified categories with potential, singling out East Asian and Indian foods. Baked goods and prepared foods are also areas where buyers are actively seeking regional suppliers. They gave a “not so good” rating to hot sauce, salsa and goat cheese, saying that those markets had become saturated.

They encouraged the attendees that if their product could help to differentiate Whole Foods from other stores, they wanted to hear about it. “We want to know your story,” one buyer said. “What is local and in season.”

An Austin, Texas-based executive also explained the chain's eight-month-old local producer loan program and shared profiles of previous borrowers.

“We are offering just under $10 million, divided into 11 regions. So far, we have $750,000 loaned out,” she said. Loan interest is between 5% and 9%.

Funds are limited to projects for expansion, not ongoing operations. Grants for projects like expanding a dairy herd, upgrading water recycling systems and pursuing organic and animal welfare certifications have been made in the amount of $50,000. One farmer has received $80,000 to buy additional acreage and add irrigation.

The program was inspired by the Whole Planet Foundation of providing small micro-loans in developing countries and working with producers not selling to Whole Foods Market.

Decisions for loans will be made regionally. “This is in the pilot stage, but it speaks to our strong commitment to support local producers,” the executive said. “Capital cannot be a barrier to success.”