For my conversation, I decided to imagine a conversation between Michael Rozyne and John Mackey discuss their respective company’s relationship with regional/local farmers with Farmer Zack Fisher, a small-scale local farmer looking to market his produce to supermarkets.
Farmer Zack: My family has owned this land for nearly 90 years without our farm operation ever changing, but I think its finally time to take my crops to a new market. I’m looking to bring my produce to nearby supermarkets, and I’m looking to enlist the help of one of you two gentlemen. Who do I give my crop yields to? Red Tomato, or Whole Foods?
Mackey: Zack allow me to say that we at Whole Foods don’t see any inherent reason why corporations cannot be just as caring and responsible as small businesses. 78% of our farms are independent or family run. In fact, our-
Rozyne: I’m gonna stop you there, John. If we’re talking about ‘caring’, then how do you think you benefit the farmers? I want a future in which the region’s supermarket chains actually depend on the region’s farms for fresh produce. I want a future in which
growers sit at the bargaining table when deals are made and prices are set!
Farmer Zack: Well what do you say to that John? Has Whole Foods bought into this picture? It sounds nice to me!
Mackey: Well Zack, and Michael, as a businessman I have to tell you that an all-local supply chain is just not sustainable for a supermarket chain of my size, and others of similar stature. This is not to suggest that Whole Foods is not fully committed to helping out small-scale local farmers, who believe are key stakeholders. We require each store to buy from local farmers, sometimes host farmers markets in our store lots, and give nearly $10M in loans to local farmers annually. Our customers value locally sourced products as well, and we do our best to align our business strategy with the needs and desires of our stakeholders. We even give money to Red Tomato!
Rozyne: So is your desire to have locally-sourced food motivated by customer demand or company values?
Mackey: Well, both.
Zack: What does that mean?
Rozyne: Do you, John Mackey, and the executives at Whole Foods not personally care about local farmers?
Mackey: Well gentlemen, a strictly local foods philosophy is not a very compassionate philosophy. It prioritizes regional farmers over other suppliers! Now, I myself would much rather have a locally grown Apple over one from California, but it is impossible to run a successful national food business with only local ingredients.
Rozyne: So what then, you resort to factory farms? Industrial organic?
Mackey: Like I said before, we are a caring business. We care deeply about each of our stakeholders, and act to uphold our Declaration of Interdependence- I have a copy for you here Zack. We understand ethical considerations in each business decision we make. We care about local farmers, but understand that we as a business cannot rely solely on them.
Rozyne: You hear that Zack? You’d be so low on Whole Foods’ priority list!
Mackey: Why does that matter if I’m returning value to these farmers?
Zack: That’s what I’m after in the end, value for me!
Rozyne: Zack I can assure you that we at Red Tomato have that at the heart of our strategy. On a barrel of tomatoes for example, we return you over three times more than the traditional broker system.
Rozyne: Also Zack, by using Red Tomato as a partner, you will gain one more thing which Whole Foods does not provide- representation. Using Red Tomato gives you our bargaining power over larger food chains like Whole Foods (sorry John).
Zack: No offense, John, but I think I’m going to have to go with Red Tomato- its just more money in my pocket at the end of the day.
Mackey: While I’m sorry you didn’t come straight to Whole Foods, your produce may still actually end up on my shelves! Red Tomato is one of our strategic partners in helping us provide locally grown food.
Rozyne: Zack, this may be the start of a beautiful friendship.