The Whole Story: Organic foods market goes online to expand customer base

Whole Foods Market – a purveyor of organic foods, healing remedies and the down-to-earth lifestyle such things engender – is taking a decidedly synthetic approach to direct marketing: the Internet.

The cataloger and retailer recently put up a Web site (www.wholepeople.com) and lined up $35 million in financing to facilitate its first public stock offering early next year.

The nearly $80 billion organic foods industry is no small potatoes. Wholepeople.com was formed by the merger of two existing businesses: Amrion Inc., publisher of the Physiologics vitamin and nutritional supplement catalog, and WholeFoods.com, interactive marketing director John Fischer points out.

Big Ambitions

The new site will offer some 6,000 non-perishable house-brand items, shipped nationwide from a central distribution center. There also will be more than 20,000 pages of content related to natural foods.

If it seems profitable and customer interest is apparent, perishable items may be added to the online offerings.

Despite Wholepeople.com’s big ambitions, the company doesn’t have a huge DM promotion plan in place. An incentive program will encourage Whole Foods’ more than 14,000 retail employees in 88 stores to publicize the site. The company will supply workers with buttons, T-shirts, coupons and business reply cards to spread the word to some 5 million retail customers, notes Fischer. Separately, the company, which recently relocated from Austin, TX, to Thornton, CO, bought a minority interest in fellow alternative lifestyle marketer Real Goods Trading Co. for $3.6 million. As part of the deal, Real Goods is looking to open as many as 20 stores adjacent to Whole Foods Markets during the next five years and will experiment with retail kiosks in existing stores.

First-Year Goals

Whole Foods hopes these ventures and the IPO will lead to the site becoming profitable in two years.

“Our time line make sense because one $100 purchase per year by only 1.5% of Whole Foods Market’s customer base will allow us to meet our internal first-year revenue goals,” says Fischer, adding that the company will continue its focus on print catalogs as well.