Issues Faced by Whole Foods in Selling Organic Foods
Whole Foods is the chain of the supermarkets which concentrates on the natural and organic foods. It sells local as well as national brands along with some of the private brands as well. It depends on the selection of the customers as to what they are looking to buy. Some of the products which Whole Foods sell are flowers, beverages, apparels, household items and other nutritional products. It also sells some luxury products like handmade products and bulk organic honey. The stores also give a huge selection of the prepared food products (Wholefoodsmarket, 2018). These products are developed by the similar ingredients and quality which the firm’s own suppliers generally held to. Whole Foods also involve itself in selling of whole Food stocks. This function sets the firm to be very different from other companies. It is considered to be one of the most mission driven firms. This firm believes in not just earning profits but also wants it customers to be healthy by using whole Foods and organic foods. Its desire is to maximize the happiness of the customers by serving in the communities which are local and by not harming the environment at all.
Purpose of the Report: The purpose of the report is to identify the issues given in the case study and then identify the way to mitigate those issues.
There are several issues found in the case study like shipping cost issues, pollution in long journey transport, labeling of products etc. are discussed in the report.
Contextual Issues Whole Foods Were Facing
There are some issues which Whole Foods faces in terms of selling the organic food Products. No doubt the selling of the food products done from the firm is in good amount and the company earns a lot of profit. Yet in producing and the management of those organic products comes with some of the issues.
- Shipping Costs: Organic food is considered to be the exotic foods of all. This organic produce is perfect due to its properties that it is produced with no pesticides and chemicals. These pesticides and chemicals make the food no more organic. It also degrades the environment and also is very harmful to consume too. Still the food costs too much due to the environmental shipping that is done very frequently from distant locations around the whole country(Atanasoaie, 2012).
- Pollution: While pesticides are not there in the organic foods at all. It is very essential s that it does not harm the human body. But the pollution which is caused from the transports vehicles which comes distantly carrying the produce to the stores is so much that it clearly harms the organic foods a lot( Demir & Demir, 2014).
- Product Labeling: Whole food’s list of banned ingredients is quite long. The chain does not carry or sell any of the items which have banned items in them. Some of the banned products are Corn Syrup, Hydrogenated Oils, aspartame, Coloring in food products etc. This creates the issue in the labeling of the products. A few of the users might have this belief that if the products are from the Whole Foods, it will be healthy. But then they will fail to also consider the fats and the calories a few items would have. Some of the house made items might also have high calories. Many of those items are not even labeled with complete nutritional information on the foods. For example: The ingredients in the Pesto pizza might be organic yet it still has a few blends of cheese and oils which can harm people as they are fattening. While it is very obvious that the users must be aware of the nutritional information of the items which they buy but they are also equally responsible for the dietary mix that they are consuming(Garibay, 2003). There are evidence where people have criticized the firm for developing the brand which looks absolutely wholesome yet they carry food with Oils, Fats and sugars (Essoussi & Zahaf, 2012).
- Food Retailing: Whole Foods though have seen the huge growth in the market, the food retailing is critical industry which has multiple competitors and has some tough rules. The organic food market is also very highly competitive and there are several changes like regulations of the government on the food products, the recessions which comes and go in the economy and the edgy turns in the taste of the consumers can have unbelievable effects on the low profit margins of the retailers in the food industry(Lukic, 2011).
Cost Saving Strategies
There can be several strategies with the help of which the costs in the organic foods processing can be reduced. They are as follows:
Produce More: As it is the demand of the organic foods is very high. Hence, the firms should produce a very huge amount of organic foods or in huge bulk. Due to this, the cost of the transport would also become less and the cost of manufacturing in whole sale would be good enough to save good amount of money (Ahuja, 2017).
Strategies to Mitigate Issues in Selling Organic Foods
Focus on the products which sells high: The firm should emphasize on the food products which are bought by a most of the people. Irrespective of the season, there are some organic products which are bought by variety of consumers due to their nutritional benefits. When the company would focus on those products, the cost of manufacturing of those particular products would reduce to some extent (Dolezalova, 2009).
Decrease Expense: Some other expenses can be decreased so that the remaining amount of money can be used in the manufacturing of the organic foods (Post, 2012).
Redefining the Niche: If packaging of the products is done in various sizes, it might help the firm to get away from the similar volume as competitors.
Pollution Reduction Strategies
There are some of the strategies which can be used to reduce the pollution in the organic foods while being transported. One of the best strategies which can be used is that the manufacturing of the organic foods should be done in the same city and country as much as possible. The environmental cost is too much to bear for the firm as it is too much and the air pollution causes the organic foods to also deter in their sustainability (Dimitri & Oberholtzer, 2009). While Whole foods sells organic foods for the happiness of their customers, it also desires to not harm the environment at all. Hence, the cost of environment could increase a little so that there is less pollution created from the vehicles. That is the only possible strategy for the environment to not get hampered as well as the transportation of the organic foods too.
Labeling Strategies
The labeling of the product is one of the important issues which the consumer faces and hence, it is faced by the firm too. Though the packing and the labeling of the organic foods sold by Whole Foods is done nicely yet there are some issues which still remain in the labeling part. Some strategies which can be used for effective labeling are:
- Organic Certification: There should be organic food certification marked on each and every organic product of the firm. With this, at least the consumer would find it easy to judge that the product is organic or not(Albert, 2010).
- Putting every ingredient: There are some products which are labeled nicely and has all the information about the ingredients. For example: Pesto Pizza. It has all the ingredients written on it and it is an organic product. Yet, the oils and the sugar content are not labeled which can be fattening for the consumer. This type of information should be put in small sentence that it has oils and some fattening ingredients too. It would then become easy for the consumer to buy the product having all the details on the package of the product.
Food retailing
There can be some strategies which the retailers can use to mitigate the issues that comes in the retailing of the foods. They are:
- Food Sourcing: Any retailer should identify the optimal place in the value chain of every category of the product. For doing it, the retailer must be able to create a good understanding of the landscape of the supplier and also the economics. After knowing all this, the retailer can decide the ways to decrease the total costs and also improve the power of negotiating(Lyons, 2007).
- Clear Vision: Whole food for having new strategies must have a clear vision to make it all work. It should be able to link itself with the core consumer groups. There is a clear vision about the offering, the identity of the groups to be targeted and also value proposition(Buck & Minvielle, 2013).
- Updated with the rules: The retailers should always stay undated with the new governmental rules which keeps on changing from time to time in terms of organic foods and whole foods. This way the firms and the retailers would be able to identify the issues and mitigate them even before they occur(Martinez & Rodriguez, 2018).
Impacts on Firm being Socially Responsible
There are several impacts on the firm who are socially responsible. They are as follows:
Sustainability: Sustainability refers to the usage of the alternate energy sources for the production of power. It is of great benefit since it reduces the effect of the fossil fuels on the atmosphere (Fontaine, 2013).
Corporate Social Responsibility and Its Benefits and Challenges
Meeting Needs in Future: The social responsibility is also connected with idea that industries are required to promote the benefit of the public via making sure that the business atmosphere which will favor the development of the future (Ismail, 2009).
Usage of the Resources: Social responsibility always refers to the reasonable usage of the resources. The idea is just to promote the usage and the re usage of the resources which are partial and they are not renewable due to the exhaustion might indicate to strict outcomes impacting the people. Due to this reason only the business act in agreement of the rules of social responsibility objectifies the promotion and the growth for more effectual usage of the resources.
- Clarify the values: Firstly, the reason as to why the firm is in business should be clear in the stakeholder’s mind. When firms have clear aim, it automatically leads to the set of related values. Values clarifying process is required on the first place for connecting the business with the community. The firm is needed to support the initiatives which are continuous with the aims and values. In addition to that the firm should ignore the things which are not consistent in relation to the same. This will help the firm to improve the brand name and image (Asemah, 2012).
- Assess the skills: The very next step is to reveal on the major skills and the essential capabilities of the firm. The reason of doing this is to know about the most passionate things a firm can do. For example: Whole Foods’s have this passion to benefit not only themselves but their customers and also the environment. They do not want to harm the environment and save it as far as it is possible.
- Potential Projects: When the business starts to grow, people who have good initiatives visit the company to connect with it. It is always great if the firm can help those people with initiatives yet it is still better to select the projects which have the potential in advance and which are based on aim which the firm also has.
- Best Matches: As soon as the firm gets the projects after googling, searching and when the firm finds the apt projects which are related to the same initiative the firm stands for, it should make the marches with those projects and in the end the social responsibility is paired with the business(Glauser, 2016).
There are some of the challenges which can cause issues in the implementation of the CSR in business. They are:
- Employees: The salaries of the employees take the huge amount of percentage in the business. Most of the firms attempt to keep the salaries low in terms of maximizing profits. The firms which are socially responsible understand the fact that they should be able to pay the firm fairly and this might cost the firm more than usual(Burchell & Cook, 2004).
- Supply Chain: The firms which work with the multiple suppliers can easily find the challenges in addressing the business which are irresponsible socially.
- Users: When the users give negative review of the product which was meant to benefit the users, it is a big blow for the firm. For making sure that the customers are satisfied and the products are meeting the safety standards, a firm goes through very challenging things.
- Sustainability: The recycling of the bottles, reduction of the usage of paper and the consumption of energy are the ways in which the business can involve the sustainable practices in their functions. Yet, it is challenging for the firms to involve this social responsibility with the operations(Williams, 2018).
Though Whole Foods is doing great in its business yet it had some issues it was facing and still faces sometimes. One of the major recommendation for the firm would be to stay active in the social responsibility as far as possible. With this, the firm would be able to sustain in the market for the longer time irrespective of its competitors coming in the market (Jan, 2006). The firm should also be able to improve the costs spent in the manufacturing and the procession of the organic foods. By doing this, the saved cost could be used in the pollution created by the transportation vehicles which brings the organic foods from distant lands.
Conclusion
This report talks about the firm named “Whole Foods” which does great in the market by selling the organic products and various other items. It is very popular in public as the costs are reasonable and the firms makes sure that it sells as good organic products as possible. However, the firm faces some issues when it comes to selling the organic products. The case study talks about the issues that the firm faces followed but the strategies which can be implemented to mitigate those issues. In the second part of the report, the discussion about the corporate social responsibility is talked about as Whole Foods is very much into the social responsibility. The process of pairing the social responsibilities is discussed with the challenges the business faces in implementing the CSR. A few of the recommendations based on the above discussions are given to the firm
Recommendations for Whole Foods
References
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