By Heather Omand, MOFGA Organic Marketing and Business Coordinator
April 20, 2015
On March 26th, 2015 MOFGA and Whole Foods Market hosted the Whole Foods Market Mixer, which proved to be a very informative event. Whole Foods brought several representatives, including three folks from the Portland store. They provided information about the process of becoming a vendor, their expectations and needs for vendors, and their emphasis on relationship building with local farmers. The main theme of the meeting was their commitment to working with farmers to build mutually beneficial relationships. With other wholesale buyers we often hear primarily about the challenges of working with local producers: lack of understanding of quality expectations, of consistency and delivery needs, and of packing and packaging requirements. These factors are important to Whole Foods, but the company is committed to playing a role in helping Maine certified organic farmers to "scale up" and reach a point where both sides are happy with the relationship. "If we can make the price work for both sides, and the quality is there, we will always choose local first. Local and organic is a win-win" said Mike Bethmann of Whole Foods.
The example Matt Whitten, Portland Produce Team Leader, referred to in order to demonstrate his commitment to Maine producers was his relationship with Ian Jerolmack at Stonecipher Farm in Bowdoinham, Maine. Whitten and Ian worked together to help Stonechipher reach and exceed Whole Foods' delivery, packing, and quantity expectations. When I asked Whitten to elaborate on how this had worked, he said, "We got mad. Sometimes Ian was mad at me, sometimes I was mad at him. We communicated, invested in the relationship, and we figured it out."
What is driving Whole Foods to not only seek out local, certified organic products, but to put so much investment into those relationships? "Our customers are looking for the types of products they find at farmers' markets, but they want it every day of the week. They want the variety, the quality, they want to recognize farmer names." Robert Maxwell, Portland Store Team leader, said that, "on a bad week" 30,000 customers came through the Portland store. In August 2014, 20% of the produce those customers purchased came from local farmers and producers. Mike Bethmann, (Associate Coordinator, Product, North Atlantic Regional Produce Team) said, "In the season, ideally, we shouldn't be buying anything from the distribution center: it should all be coming from local farms."
All this is not to say that there are not challenges to working with Whole Foods. Some products, such as baby greens, have to be treated differently than other produce because they have had caused national food safety scares. To sell those products at Whole Foods you have to meet the same standards that large scale California or even international producers meet, such as tracing product back to a 3 foot by 3 foot plot. They also require a HACCP plan and interacting with the Whole Foods Global Team in California. However, it sounded like only a few, specific types of produce are subjected to that level of oversight such as mushrooms, sprouts, and baby greens.
It is important for certified organic producers to understand what the folks at Whole Foods need, and why, so that both sides can get a better sense of where the other is coming from. Here are a few things to consider:
• Whole Foods turns over such a high quantity of product in a single day that it is not possible for them to store product on site. They need ideally two to three deliveries per week (although this is not to say they wouldn't take one, depending on the product and relationship) because of the lack of storage space.
• There are no written contracts. Whole Foods is committed to building relationships and consistent communication with their producers. They spoke to some examples from Stonecipher Farm where an agreement had been made to take a lot of one product, and only a small amount of radishes. The first product had a bad season, but the farm had a bumper radish crop. Whole Foods agreed to try selling a larger amount of radishes than promised. It worked… that time. This isn't necessarily a typical scenario, and it can't be: the reality is that Whole Foods customers expect consistent product availability and the store has to be to able to offer that as much as possible. In that way, not having contracts allows both sides to have the needed flexibility their business requires.
• The quantity and scale Whole Foods is interested in purchasing depends on the product. They made it clear it is worth reaching out and communicating with them to see if there is potential for a mutually beneficial relationship. Even if you do not produce the volume that they desire OR even if you have a product they are not currently selling consistently; they are interested in exploring new opportunities.
• They are committed to honoring existing farmer relationships. If you are offering a product they are already getting locally, they are likely not going to be interested, unless there is more demand than supply. This can be a wonderful thing if you are a local vendor with Whole Foods. Jeff Spear from Spear Farm and Greenhouses attended to share his experiences working with Whole Foods. Whitten said of this relationship, "Spear pointed out to me that last year we actually purchased less from him than the year before. We really took note of that and we want to make sure that doesn't happen again. We value that relationship."
Many producers in attendance wondered what the application process is for new vendors. Whitten recognized that it is a process that takes patience. Luckily, Whole Foods have people on staff to help you with the process. For example, if you are interested in selling to the Portland store, your first step is to contact their Local Forager, Kristen Bartlett. The one-time process of becoming a vendor can take a few months, occasionally more, from start to finish. The process starts with a conversation with Bartlett and the local buyers at the department you would be selling to, an informal site visit or two on-farm to make sure you aren't doing anything that is grossly out-of-line with Whole Foods standards, paperwork, pricing negotiation, and then if all goes well; approval. The paperwork for most vendors (depending on products offered) requires insurance, an online questionnaire, and creating an identifying number for traceability.
Pricing is often a tough hurdle to get over when considering moving from direct marketing or small volume wholesale (to restaurants or natural food stores) to a supermarket environment like Whole Foods. One farmer, a current vendor with Whole Foods, talked about how there were occasions when they just couldn't reach agreement and therefore some things were not sold to Whole Foods. Whole Foods has pricing guidelines that allow them to pay a certain percentage above what they would pay elsewhere, for example their distribution center, for a product. Depending on customer demand, quality, uniqueness of product or similar factors, they can occasionally go above and beyond those guidelines, but it doesn't happen often. It becomes a process of mutual education between Whole Foods and their local vendors; what can the store do to become more flexible or to educate consumers and what price can the farmer accept and remain profitable? As a general guide for a farmer considering applying to be a vendor, about 50% of the Whole Foods retail price is the price you would receive.
There are other realities of working with a large supermarket store, some great, some challenging. Whole Foods reliably pays for their local product within 30 days, direct deposit. Additionally, all ordering and communication is done by phone call, and you will know who you are talking to and have a relationship with that person (more on that in a bit). Typically, local vendors call the day before to deliver the following day, but if you need more time than that, call 2 or 3 days before. They are flexible with what works for you. However, you should plan on calling by 10 am to put in orders and deliveries have to get to the store by 2 pm, by noon on Saturdays. This is because Whole Foods has to be able to sort and prepare that product to go out on the floor the next day.
Quality is paramount. Local is very important to Portland consumers, but local and organic is preferred. Whitten talked about how in Boston, their consumers perceive anything from New England as "local", but in Portland, their consumers want it to be from Maine. This creates a lot of demand and pressure for Whole Foods, and a lot of opportunity for farmers, but it has to be a high quality product.
This likely seems like a lot of information, but the takeaway from the March event was how willing to work with you the folks at Whole Foods are. Matt Petros, Portland Produce Buyer, will typically be the person you call every week to make delivery plans and he truly understands the realities of farming in Maine. He was a farmer in Maine; he worked for 5 seasons at Annie's Pride Farm in Ellsworth, finishing his last two years there as farm manager. There he participated in the production of a variety of fruit and vegetables sold direct-to-consumer through a farm stand and farm store. He said of the experience, "It was there that I learned what the value of work truly means and how personal work can go great lengths to influence something larger than yourself. I know what it takes to grow the products we carry at Whole Foods. I think my prior farming experience gave me an understanding that few have, and true appreciation for what goes onto our sales floor." Since becoming the buyer, Matt's experiences with farming have come full-circle, allowing him to talk to vendors, mainly farmers, about their product and how much work goes into it. He says, "Farming isn't a fool-proof science, there are always going to be issues, or unforeseen occurrences that can really throw a wrench in things. I know what this loss looks like on the farmers end as well. I remember a time in 2009 at Annie's Pride when we had a really rainy summer, and we had to pull up $30,000 worth of tomato plants that had been stricken with blight. That's when the loss becomes tangible." Matt feels that his role as Produce Buyer at the Portland Whole Foods has the potential to make a positive impact on the agricultural climate in Maine and represents a major opportunity for Maine farmers. "There is an ever growing desire for local produce, and as a store that plays such a large role within the community, I feel it is our duty to give the people what they want."
In closing, I have heard some concern from some certified producers about Whole Foods' "Responsibly Grown" labeling. Certified organic farmers have expressed concern that this would replace the organic label in the consumer's eye, that it would only serve to further confuse customers. I asked Bethmann about this to see what he had to say. "Our customers get certified organic; they demand it, they understand what it means, the value of organic is not going away. However, they also demand other information and transparency that is not covered by organic certification; such as labor management, water conservation, and waste management." While this is not completely true; the National Organic Program rules do require certified organic farmers to manage plant and animal materials in a manner that does not contribute to contamination of soil or water, still Mike saw Responsibly Grown as supplying consumers with additional information, not as undermining organic certification. He clarified, "There are many facets of our food system that could benefit from improvements and emphasis on quality practices, like the kind of improvements organic certification has brought to production. Most certified organic farmers and producers come in to the Responsibly Grown metric at least at the 'Good' level" (the label offers Whole Foods products either a "Good", "Better", or "Best" rating). He also clarified how Responsibly Grown ratings will be displayed in comparison to organic certification: product labels typically portray the item name, the farm name, the price and unit, organic certification if obtained, and the Responsibly Grown rating is demonstrated by a sticker at the top corner, no larger than the organic certification label.
I hope this has provided certified organic farmers with some additional information about both the process of becoming a Whole Foods vendor and what that relationship might look like. Please feel free to contact Heather Omand at MOFGA with questions (email@example.com), or consider reaching out to Kristen, the Whole Foods Portland location's Local Forager at 207-774-771 or firstname.lastname@example.org.