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November 16, 2008
Selling Through Distribution.
I was in Whole Foods last night, buying food to prepare a dinner at my daughter's apartment. Whole Foods is not like a standard grocery store/supermarket. It is a cross between a gourmet specialty shop and a high-end supermarket. I bought golden beets, organic baby lettuce mix, lamb sausage, fresh swordfish, French picholine olives, Pyrenees cheese with green peppercorns, flaxseed crackers, and a decadent carrot cake.
I went to Whole Foods knowing it would be more expensive, but drawn by the wide selection, the variety of natural and organic products, and the freshness of its food. The staff there is friendly. They think of little things like having tape handy to secure the lid on the olive container before bagging. The experience at Whole Foods is something I look forward to.
For manufacturers whose products are on the shelves, Whole Foods attracts a consistent and motivated set of buyers. At the same time, it pits you against tough competition including the house brand in many categories. It represents both the promise and the challenge of selling through distribution in today's marketplace.
Whole Foods is under duress in the tough economy. Not as many people can afford the price premium that Whole Foods and the organic/natural category dictate. And more competitors are emerging, as chains like Safeway and Trader Joe's cut into the market. Whole Foods is looking for manufacturers to help it promote its baseline message of healthy, natural living to help drive in-store traffic. This symbiosis is essential in all channel distribution, but has been stripped away in many/most markets.
I was in Whole Foods last night...and in addition to a great dinner, I got a real reminder of the battle that is underway in channel distribution, as markets continue to evolve, e-commerce penetration increases, and brands struggle with innovation, cost control and distirbution efficiency.
Posted by jcioban at November 16, 2008 10:51 AM
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