No Company is Perfect


It is sometimes difficult to find fault in the trendy supermarket chain that has revolutionized the grocery industry by creating a progressive shopping experience. Whole Foods, similar to Lululemon has encapsulated the “Apple Effect” @benoberfeld in which it is adored by the “trend seeking” market that is willing to forego low prices for an all-immersive experience. Whole Foods revolutionized the organic and fair trade industry by directing its marketing strategy towards people of many ages that identify as “health conscious” and have a heightened awareness of the role that food plays in long-term health. The popularity of Whole Foods came at a time where consumers strongly believed that organic and fair trade farming has positive environmental effects in contributing to more sustainable agricultural practices. However, similar to reports of Apple and Nike, “sexy” companies are not always without fault.

After researching Whole Foods, two issues seemed to be at the forefront of the corporate social responsibility controversy. The first being, the alleged price scandal at established stores. During its weakest period of growth, New York City officials accused of “mislabeling weights of freshly packaged foods like vegetable platters and chicken tenders, leading to overcharges of under $1 to nearly $15.” While management made several efforts to combat the PR nightmare, the market, as well as consumers ran with the image of Whole Foods as an overpriced grocer. Similar to other premium priced brands, Whole Foods relies on its superior market segment as a “value” leader. After reading news like this, will consumers be more hesitant to trust the value that Whole Foods has to offer? I think controversies such as this act as a serious threat to Whole Foods’ core values as well as their merchandising strategy.

The second issue raised by consumers is the use of cheap prison labor in the production of expensive cheeses. Shortly after the release of price deception activities mentioned earlier, labor advocates raised awareness of unfair wages paid to suppliers of Whole Foods. “The low wages paid to produce goods that sell for much higher prices to consumers has drawn sharp critiques from prison and labor advocates.” Under the supplier arrangement inmates are paid as “little as 74 cents to as high as $4 a day” for the production of many popular goods. It is not difficult to connect the practice of labor outsourcing used by companies like Apple and Nike to the sourcing of work to prisons that offer cheap labor. How do you compare the ethical treatment of these workers? Dennis Dunsmoor, the director of the program stated, “A lot of these guys never worked a job, never clocked in, never worked eight hours, and [teaching] just that skill alone is very valuable. Do you believe that forced labor through incarceration is ethically just? Are there other issues at play besides the low wages paid to workers? Does the use of incarcerated workers take away from the “sex appeal” so commonly associated with Whole Foods’ products? In class on Wednesday, we will talk about the difference between organic and fair trade in which organic refers to the overall quality of the product, and fair trade refers to method in which it was produced. Is this a good example of fair trade? And, does this method of production taint the overall quality of the product?

An example of ridiculous pricing:

Screen Shot 2015-08-05 at 09.27.30

 

Article links:

http://www.wsj.com/articles/whole-foods-results-add-to-growth-concerns-1438202546

https://news.vice.com/article/whole-foods-expensive-cheese-and-the-dilemma-of-cheap-prison-labor

I admit, I had a hard time finding “ground sources”

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2 thoughts on “No Company is Perfect

  1. I find the question you raise about the method of production tainting the overall quality of product interesting. With low wages paid to workers coupled with the steep prices in Whole Foods stores, I find their image hurt more than the product itself. We hear about Nike and Apple having similar issues, but Whole Foods added to public controversy over cheap labor makes the issue so much larger than we would like to admit. People will continue to shop at Whole Foods, just like people still buy Apple and Nike products. I continue to hold these companies accountable for their actions, but I think it is our responsibility to understand where our products come from.

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  2. wow. The prison labor is troubling. I wonder if Whole Foods cut that out. It is like two steps back in their supply chain. Still, the use of prison labor to undercut other firms is growing as the private prison industry has grown. And, it just seems flat out messed up.

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