Whole Foods Market (NASDAQ: WFMI) is a foods supermarket chain based in Austin, Texas which emphasizes "natural" and organic products. As of September 2009, the company operates 302 stores: 291 stores in 38 U.S. states and the District of Columbia; six stores in Canada; and six stores in the United Kingdom.
The company is consistently ranked among the most socially responsible businesses and placed third on the U.S. Environmental Protection Agency's list of Top 25 Green Power Partners.

Whole Foods Market, Inc. is the leading chain of natural food supermarkets in the United States. The company's stores average 28,500 square feet in size and feature foods that are free from artificial preservatives, colors, flavors, and sweeteners. They also offer many organically grown products. Many locations include in-store cafes and juice bars. Whole Foods has also developed a growing line of private label products such as organic pasta, freshly roasted nut butters, oak-aged wine vinegars, and aromatic teas. After the company was founded in 1980 with a single store, it grew dramatically into a chain of more than 130 stores in 25 states, the District of Columbia, and Canada. It is a Fortune 1000 company, ranked as the 41st largest U.S. supermarket and the 730th largest U.S. company overall.
In 1978, 25-year-old college dropout John Mackey and his 21-year-old girlfriend Rene Lawson, borrowed $45,000 from family and friends to open a small natural foods store called SaferWay in Austin, Texas (the name being a spoof of Safeway). When the couple were evicted from their apartment for storing food products in it, they decided to live at the store. Because it was zoned for commercial use, there was no shower stall, so they bathed using a water hose attached to their dishwasher.
Two years later, John Mackey partnered with Craig Weller and Mark Skiles to merge SaferWay with their Clarksville Natural Grocery, resulting in the opening of the original Whole Foods Market on September 20, 1980. At 12,500 square feet (1,160 m2) and with a staff of 19, the store was quite large in comparison to the standard health food store of the time.
Less than a year later, on Memorial Day in 1981, the most damaging flood in 70 years devastated the city of Austin. Caught in the flood waters, the store’s inventory was wiped out, and most of the equipment was damaged. The losses were approximately $400,000, and Whole Foods Market had no insurance. Customers, neighbors, and staff pitched in to repair and clean up the damage. Creditors, vendors, and investors all assisted in helping the store recover, and it reopened 28 days after the flood.


In the spring of 1997, in a move designed to contain costs and improve productivity, Whole Foods began to roll out a centralized purchasing system. Installed systemwide by the end of 1997, the system enabled the company to track product movement and prices. Also that spring, Whole Foods launched a low-priced private label called 365, which was meant to denote value every day of the year. The 365 line differed from the Whole Foods line in that 365 did not feature organic products and the 365 products were priced about 20 percent cheaper. The new label was meant to attract more value-conscious customers, people who typically shopped at conventional supermarkets.
In June 1997 Whole Foods acquired Amiron Inc.--a manufacturer and marketer of nutritional supplements and natural medicinals based in Boulder, Colorado--in a stock swap that translated into about a $138 million purchase price. Amiron was formed in 1987 by Mark Crossen and his father, Henry Morgan Crossen. The father had read about a compound that was supposed to strengthen the heart muscle; the Crossens then ordered some and found that it relieved their genetically caused irregular heartbeats. Amiron was founded to market this compound to others and the company expanded into other nutritional supplements, eventually producing more than 200 such products. The Crossens took the company public in 1988 and by 1996 posted net income of $4.5 million on sales of $54 million, 85 percent of which was generated through direct mail and catalog orders.
In 1996 the Crossens decided that it was time to sell Amrion or merge it with another firm, since they wanted to reach a broader market and knew that they had to step up their retail presence to do so. By joining forces with Whole Foods, Amrion would gain dozens of outlets at which its products could be sold. Amrion would take over the manufacture of the Whole Foods brand of nutritional supplements and further expand this line. Whole Foods would also gain Amrion's expertise in selling these items through catalogs and the World Wide Web. Following the acquisition, Amiron became an "autonomous subsidiary" of Whole Foods and Mark Crossen remained Amrion's CEO and also joined Whole Foods' board of directors.
Whole Foods ended 1997 with two additional acquisitions, both in December. It entered the Detroit area with the purchase of Merchant of Vino for $41.2 million in stock. This company owned four natural foods supermarkets and two wine and gourmet stores with 10-month sales of $42 million. It also acquired its longtime supplier, Allegro Coffee Company, for about $7.5 million in stock.
By 1998, Whole Foods and its sole major competitor, Wild Oats Markets, Inc., had purchased most natural foods businesses that had a significant number of stores. The company therefore slowed its pace of acquisition. It further expanded its Boston-area holdings in 1999 with the purchase for $24.5 million in cash of Nature's Heartland, the owner of four natural foods supermarkets. Later that year, Whole Foods spent about $3.6 million to buy 16 percent of Real Goods Trading Corporation, a retailer of environmental and renewable energy products by means of retail stores, catalogs, and the Internet.
In 2000, Whole Foods purchased Natural Abilities, the operator of three stores in Sonoma County, California, for $25 million. This transaction brought the company's Northern California presence to 12 stores. The 2001 acquisition of Harry's Farmer's Markets for about $35 million brought Whole Foods to Atlanta. This purchase also contributed to what Chairman Mackey called the company's "intellectual capital." The three stores were much larger even than Whole Foods', averaging over 70,000 retailing square feet. More important was the business' focus on perishables, with about 75 percent of its sales fitting that category. Mackey expected to "leverage" Harry's large store and perishables experience "across the Company."
Not only did Whole Foods expand geographically, it also tried to add the Internet to its methods of distribution. In March 1999, it launched Wholefoods.com, with the stated intention "of being the number one retailer of natural products online." By September further plans were announced to merge Amirn, the company's natural supplement subsidiary, with Wholefoods.com to create Wholepeople.com. This venue would combine Whole Foods offerings with those of Amiron, Real Goods Trading Corporation and other businesses focused on "the natural lifestyle." The company hoped to create a site that would "become the homepage for a community of people who share common values about healthy lifestyles and supporting the environment and who are looking for a wide range of high-quality products at competitive prices that are consistent with those values and interests." Whole Foods hoped to be able to spin Wholepeople.com off as a separate public company within a year.
Before Wholepeople.com could be launched, however, the bottom fell out of Internet stocks. Moreover, Amiron itself was suffering from a downturn in the natural supplement market. Whole Foods quickly exited both businesses, selling Whole people.com to the successful Internet company Gaiam.com in exchange for Gaiam stock in 2000, and selling Amiron (then named NatureSmart) to NTBY for about $28 million cash in 2001.
As Whole Foods entered the 21st century, it was by far the dominant natural foods supermarket in the United States. With the opening of a store in Toronto, Ontario, Canada, in May 2001 and plans to open one in Vancouver, it became an international company. It was also making plans to compete more directly with traditional supermarkets.
Principal Subsidiaries:Whole Foods Market Services (100%); WFM Beverage Corp. (100%); Whole Foods Market Southwest I, Inc. (100%); Whole Foods Market Southwest Investments, Inc. (100%); Whole Foods Market California, Inc. (100%); Mrs. Gooch's Natural Foods Markets, Inc. (100%); Whole Foods Market Group, Inc. (100%); Allegro Coffee Company (100%); Whole Foods Market Distribution, Inc. (100%); Whole Foods Market IP, Inc. (100%); Whole Foods Market Finance, Inc. (100%); Whole Foods Market Purchasing, Inc. (100%); Fresh Fields Markets Canada, Inc. (100%).
Principal Competitors:Wild Oats Markets; Trader Joe's Co.


OVERALL
Beta: 1.10
Market Cap (Mil.): €10,846.08
Shares Outstanding (Mil.): 173.57
Annual Dividend: 0.40
Yield (%): 0.64
FINANCIALS
WFMI.BE Industry Sector
P/E (TTM): 36.12 18.37 38.04
EPS (TTM): 48.32 -- --
ROI: 9.17 6.64 8.61
ROE: 12.27 8.84 13.81


Statistics:
Public Company
Incorporated: 1980
Employees: 20,800
Sales: $2.3 billion (2001)
Stock Exchanges: NASDAQ
Ticker Symbol: WFMI
NAIC: 445110 Supermarkets and Other Grocery (except Convenience) Stores

Key Dates:
1980: Whole Foods Market incorporates; opens first store in Austin, Texas.
1985: The company owns three stores in Austin and one in Houston.
1986: The company buys Bluebonnet Natural Foods Grocery in Dallas, converts it to a Whole Foods Market.
1988: The company buys Whole Food Company of New Orleans, its first venture outside Texas.
1989: The company opens store in Palo Alto, California.
1990: The company launches a private label, Whole Foods.
1991: The company acquires Wellspring Grocery of North Carolina.
1992: The company buys Bread and Circus of Massachusetts and Rhode Island.
1993: The company launches a Midwest Region with the opening of a store in Chicago.
1995: The company buys Bread of Life in San Francisco area, the Unicorn Village Marketplace in North Miami Beach, and Oak Street Market in Evanston, Illinois.
1996: The company acquires the 22-store Fresh Fields chain.
1997: The company buys Amiron, a manufacturer and distributor of natural supplements, and acquires Merchant of Vino of Detroit and the Allegro Coffee company.
1999: The company buys Nature's Heartland of Boston and acquires a 16% interest in the Real Goods Trading Corporation; also launches Wholefoods.com, which is soon transformed into Wholepeople.com.
2000: The company purchases Natural Abilities of Sonoma County, California, and Harry's Farmers Markets of Atlanta; sells Wholepeople.com.
2001: The company sells Amiron.
2002: The company opens a store in Toronto, Ontario, Canada.

Address:
601 North Lamar Boulevard, Suite 300
Austin, Texas 78703
U.S.A.
 
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