For many startup food companies, the ideal situation is getting onto the shelves of a local Whole Foods and growing from there. This reliable model is about to change, however, due to the grocery chain’s new buying strategy.
According to Fast Co.Exist, local buyers used to have full autonomy, but now the chain is working under a “hybrid buying model.” What this means is that local buyers will still work with local brands, but only under guidelines set by national category managers at Whole Foods headquarters.
Now, category managers will decide what percentage of national brands, Whole Foods’ own brand and local brands will be for sale at stores, as well as placement and how products will be promoted. The new model came about as a way to combat competition and streamline the buying process. Co.Exist reports that other national chains, like Target, are making similar moves in the organic and natural market.
Some who hail from the food startup community, like Zach DeAngelo of Little Duck Organics, see this move as a way to limit the number of small businesses entering the playing field via Whole Foods.
“The messaging will be ‘We want to maintain local,’ but in the end, they’re trying to save costs…and move everything to make it more efficient for freight, transportation, item management and all that stuff,” DeAngelo tells Co.Exist. “My opinion is that there will be fewer local brands.”