During his time at Whole Foods Market, Mike Schall participated in opening over 2 dozen Whole Foods Stores, including the smaller format 365 by WFM stores. He launched Whole Foods Market’s Engine 2 Plantstrong brand and has seen countless food companies and brands start small and scale smartly. He’s a living legend in the consumer space, and we were honored to speak with him as part of our series, ‘Retail Tomorrow’.
Mike served on wide ranging projects for both Global and Regional teams, responsible for implementing sourcing, launching and merchandising an Exclusive Brand product line (Engine 2 Plantstrong–the chain’s and maybe the industry’s first plant-based private label). In addition to his merchant role, Schall was part of the Global Growth and Business Development Team and collaborated on Friends of Whole Foods Market partnerships, conducted due diligence and recommended investments and strategies to grow emerging brands, and even led the consolidation of Whole Foods Market regional sushi businesses. A true “Renaissance man”, Mike sat down with us to answer four burning questions about his time at Whole Foods Market and what the future of retail looks like from his perspective.
Q: During your time at Whole Foods Market, how did you think about your consumers?
A: When you think about win-win relationships that emulate John Mackey’s vision of conscious capitalism, the company is an ecosystem that serves–and is served–by all its stakeholders. Of course, the brand relationship with its customer is most crucial. Without customers, a business has no ability to generate profits, which are required for growth, expansion and prosperity. It becomes instinctive when you’re a WFM team member to think of how Whole Foods approached its relationship with the customer. Make it fun, fulfilling, and easy to shop.
The best way to look at it is to boil it down to Whole Foods Market’s core values. They are pillars that support the company’s purpose (“Nurturing People and the Planet”) and they’re critically important and actually posted uniquely in every store (look for them and you'll find them).
Two of the most critical pillars – 1) satisfy and delight the shopper & 2) unequivocal commitment to quality–selling the highest quality natural and organic foods. These values are immutable core values.
As a result of those standards, Whole Foods Market shoppers don’t even have to read the labels on products – and that kind of trust is only achieved through decades of dedication to putting core values into action.
Q: What did that work look like over the years? How did it evolve?
A: It starts with people who are passionate and always seeking out great products. Setting aside the core values–which with some modest revision over the last 40 years– virtually every national brand of natural foods likely passed through Whole Foods Market doors at one time or another. The merchants and buyers who nurtured those brands are the heroes.
It took many years of collaboration between the Regional and Global teams seeking out (today known as “foraging”) and sourcing unique brands that met rigorous quality standards AND that consumers could enjoy. Whole Foods Market became not only the place to discover exciting new products and cool brands, but also served as the trusted mentor in quality for many of these early stage businesses and brands.
From my experiences at Whole Foods, the venerable ‘old guard’ of team members not only sought out products and local, regional (and what became national) brands, but also held firm on quality standards. We got to stand on the shoulders of team members like Margaret Wittenberg and Edmund Lamacchia and so many who worked tirelessly and relentlessly for 10 years–with their teams– to help establish organic standards. So, for example, in 2003 Whole Foods Market became the first certified organic national retailer, following the launch of the USDA’s National Organic Standards in 2002. Team members Errol Schweitzer, Joe Dickson and John Burns, to name a few, are iconic thought leaders in Global Quality and Food Safety–they helped maintain and strengthen that immutable core value of quality and establish nonGMO standards.
Ultimately it's about holding ourselves accountable, holding steadfast to those standards and identifying brands that not only resonated with consumers who were discovering natural foods, but who placed their trust in our merchandise assortment. Those standards become codified. In fact, we often referred to our standards as “the rock” –immovable values against which we measure ourselves and our success in serving our customers and our community.
When Whole Foods was acquired by Amazon, the company’s leadership began a thoughtful journey to combine those core values and the leadership principles of Amazon .It took nearly a year. Even with changes in technology, store expansions, and overall scaling of the business, by and large today Whole Foods has really held its ground on its standards. That will always be the North Star for Whole Foods. And the Core Values are ever present.
I see Whole Foods as a microcosm of today. There are lots of DTC businesses that focus so much on metrics to measure success, but the reality is before this we have to build a foundation. A brand can go out and put energy into promotional spending, sales lift, etc. – but really, in today’s omni-channel environment, how do you engage a shopper at the right price and build a relationship? I'm convinced it’s about brand ethos. People want to belong to something that’s meaningful to them and they seek brands that make them feel like they belong.
Q: What is your approach to the retail experience?
A: The retail experience should make you feel like you’re welcomed and not too crowded. Lighting matters, the right assortment, color breaks, inviting and plentiful perishables and aroma all should contribute to being literally appetizing. And the store needs to be easy to navigate–aisles uncluttered, end caps attractively merchandised to be, well, your store. Where you can find stuff.
Before being a grocer, I used to perceive those relationships with retailers, brokers, buyers like a ‘Wizard of Oz’ experience–you never really knew what was behind that curtain and how decisions were made. You’d live and die by what “your broker told you”. But once you're backstage as a retailer, you realize it's just people retailing and merchandising groceries and prepared foods, albeit talented and immersed in their craft, trying to figure it out and find the best possible “win-win” for their customers.
I really became a merchant at Whole Foods Market. I learned so much–from the Global Grocery Merchandising Teams, to the Regions and most importantly visiting the stores. I got to go behind the curtain and I was able to see the brands, the categories, the shelf merchandising through the lens of a retailer. Prior to that I was an operator, selling and marketing to retailers. But I’m smitten by grocery retailing, and Whole Foods Market for me was the adventure of a lifetime.
So for the retail experience–and because the customer is such an important stakeholder–everything in the store should speak to them. Each Whole Foods location has its own personality, from decor to assortment to local favorites and engagement with the community they serve.
And you want them to feel comfortable, stay a while and fill the shopping basket. I remember once quite some time ago, when Peter Roy (then President of Whole Foods Market) shared with me why they added a big national not-so-natural brand to the set that competed with my brand in the store. My first thought was, ‘That’s crazy!’ So at lunch one day, I asked him, “Why would you place a product like that on ‘our’ shelves?” His response was ‘When you go to a party where you don't know anyone, how long are you gonna stay? But what about when you go to a party where you know someone, or everyone? You hang out. We (Whole Foods Market) need to bring people in and make them feel comfortable, stay and shop – they need to see their friends.’
Selectively bringing brands that are familiar to consumers makes shoppers feel comfortable shopping an assortment and then discovering brands and products they might not know. They will also be encouraged to explore. Having the right displays is important, but even more so you want to make certain your assortment of products are fulfilling a strategic role (transaction builder, loss leader, etc.) on your shelves.
Q: What new trends are you excited about in retail?
A: Fulfillment centers and profitable rapid delivery. Rapid delivery that's micro-fulfilled, prepared foods from ghost kitchens–either stand alone or in the back of a retail store, etc. anything that functions as a hyper localized, micro-community serving delivery.
I’m not necessarily talking about goPuff tech and dark stores–they have a tough row to hoe. I'm talking about the future of markets like Whole Foods in a functional, smaller footprint (3,200 sq ft store). It's like if Whole Foods Market and 7-11 got married and had a baby. Go Grocer in Chicago is a great example of this and a smart business model for the future of this movement to localized retail.
Go Grocer, The Goods Mart and other small, nimble formats have speed to market to their advantage–no category review calendars, cut ins, resets. When a retailer can get a product to market in seven to 10 days, that's the future. You can open up a 34,000 sq ft store with a huge assortment, or a 3,200 sq ft store with a local, curated assortment and mix of convenience–and have groceries delivered in 30 minutes. A small format, with the right assortment, is the future.
Outside of traditional retail businesses redefining and disrupting, my interest is piqued by companies leveraging social media and performance marketing and advertising to create digitally native brands, go to market and engage the consumer and end up in omni-channel locations. They’re meeting the consumer where they are. I’m plant-based so I’m very passionate about innovation in plant-based and fermented foods, regenerative agriculture and businesses that respect the planet.
We as a population have become spoiled with cheap, available and not so nutritious convenience foods. The planet has a finite amount of water and air, and with large scale animal agriculture we’re depleting resources indiscriminately and at an astonishing rate. We’re filling our oceans with islands of plastic, overfishing the waters and raising their temperatures. We need to use our resources smarter, continue aggressive disruption for innovation and do everything we can to mitigate the impact on the environment and reduce waste–conventional packaging, plastics and other materials. I also see coming down the road of innovation in other areas of the supply chain, like with Purcell.eco - a package-less food, pet food and house goods.
Innovation and disruption serve our food industry well—and always has. From field to fork, everything is ripe for continued change. I see a very bright future for our people and our planet to be nourished and engaged with exciting new brands and ways for consumers to shop. Food is the medium—flavor is the message, and consumers will be the ultimate in deciding the future.