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- [00:00]
David Brown
Wondery plus subscribers can binge all episodes of Business War's the Whole Foods Rebellion early and ad free right now. Join Wondery plus in the Wondery app or on Apple Podcasts.
- [00:18]
Market Analyst
Let's talk about the speed with which we are watching this market deteriorate.
- [00:21]
John Mackey
It was the worst day on Wall street since the crash of 1987.
- [00:26]
David Brown
Lehman Brothers is going bankruptcy and financial markets from Asia to Europe are doing their utmost to prevent Monday from turning from dark to black.
- [00:35]
John Mackey
This could be the most serious recession in decades, and that means life as most Americans know it is about to change, in some cases dramatically.
- [00:47]
David Brown
It's March 2009 inside the Nashville Marriott Hotel. Whole Foods annual shareholders meeting is underway. Usually it's a day of celebration, but thanks to the tanking economy, not this year. From the stage, CEO John Mackey looks out at the sea of grim faced shareholders listening to his State of the Business address.
- [01:10]
John Mackey
While we're disappointed to report the first decline in same store sales in our history, we are working to contain costs to get through this difficult period.
- [01:19]
David Brown
Mackey can't rely on his mission to get people eating organic and ethically farmed food to win over this crowd. These people invested in Whole Foods because of its track record of delivering good returns. But ever since the economy crashed, the company's growth streak has been slowing. Mackey opens the floor to questions. One investor questions his plans to revive growth. Mr. Mackey, you talked about more cost controls, but what about prices in store? I'm wondering if you could do more to get those prices down. Now that shoppers are watching their spending more closely, other people in the audience nod in agreement. The chain's nicknamed Whole Paycheck for a reason many customers can no longer afford high price organic groceries. Mackey reassures the room that the core business is still strong.
- [02:06]
John Mackey
We have a loyal customer base that is aligned with our values. The market for natural and organic foods continues to grow. Our profit margins remain strong.
- [02:16]
David Brown
But that's little comfort for shareholders who've watched the company's stock price collapse 77% during 2008. And that fall puts the business in danger. A low share price leaves Whole Foods vulnerable to opportunists, the activist investors and hedge funds that buy depressed stocks and then use their stake to push companies to maximize profits at all costs. If that happens, there's no guarantee that the values Whole Foods was built on will survive. But is it too late for Mackey to regain shareholders trust? And if he can't, will he be able to find a way to defend Whole Foods and its values.
- [03:02]
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- [03:35]
David Brown
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With Zoho, you're not just licensing apps, you're licensing Peace of Mind from Wondery. I'm David Brown, and this is Business Wars. In the last episode, John Mackey bought Whole Foods rivals and turned the company into the country's top natural foods grocery chain. But now the nation's in recession and with growth fading, Mackey has to adapt to survive. This is episode three, Harsh Realities. It's March 2009, and at Whole Foods headquarters in Austin, Texas, Mackey is dealing with a crisis. But it's not the financial crash. It's one of his own making. This Crisis was seeded 10 years earlier when Mackey got a new hobby, posting on Yahoo. Finance message boards. Using pseudonyms, he wrote posts talking up Whole Foods while dissing its closest competitor, Wild Oats. He painted a picture of a hapless Wild Oats being outsmarted at every turn by Whole Foods. He found it fun. He likes arguing with people, and now he gets to do it online whenever he wants. There's also something satisfying in knowing that those who challenge him have no idea who they are arguing with. Then, in 2007, Mackey struck a deal for Whole Foods to buy Wild Oats. A deal worth more than a half a billion dollars. And once it's approved by the ftc, the US Anti monopoly regulator, Whole Foods will be the only big organic grocery chain in the country. But then, in July 2007, the Wall Street Journal reveals Mackey's secret online life and his attacks on the rival he hoped to buy. And now those online posts are one of the reasons why the FTC is considering stopping Whole Foods from buying Wild Oats. Mackey is shock the regulators are taking his trolling so seriously. He didn't invent the figures he quoted and he stopped posting six months before offering to buy Wild Oats. But the securities and Exchange Commission, which regulates American Investments, is not amused. It's investigating Mackey for market manipulation. It suspects Mackey of trying to use his posts to influence the stock prices of Wild Oats to make it cheaper to buy. And that's illegal. Whole Foods board members are livid. They feel Mackey's tarnished the company's reputation and jeopardize the acquisition of Wild Oats. Let's pause for just a moment here. Mackie may feel it's all overblown, but the company's good guy image is now dented, that's for sure. It's bad enough when your company's caught red handed doing something questionable, but if you're the very face of your company, it can be a lot worse. Your actions, especially as a founder, can make or break trust. Ethics and transparency matter. And today that's certainly more true than ever. Social media can magnify missteps into bigger narratives that can undermine the success story you've been working so hard to build. The SEC investigation clears Mackey, but it still recommends that Whole Foods board fire him for unbecoming conduct. The ftc, however, isn't backing down over its antitrust concerns. Soon, Whole Foods and the FTC are locked in an expensive court battle that threatens to derail the Wild Oats buyout. As a free market libertarian, Mackey is furious at the regulator's intervention. He considers fighting the federal government all the way to the Supreme Court. But then Whole Foods attorneys tell him that doing that will take two years and cost something like $120 million. It's a whole paycheck. And then Mackey blinks. He settles with the FTC to make them back off. Whole Foods agrees to sell 13 stores and the Wild Oats brand. But Mackey's outspokenness soon causes more bad publicity when President Barack Obama attempts to widen access to government funded medical insurance. Mackey criticizes the policy in the Wall Street Journal. He argues that health care is no different from food or shelter. Humans need those things, too. But in the US Those needs are largely met through a capitalist marketplace. His objections to Obamacare upset Whole Foods progressive customers. Some even boycott the chain. Mackey feels there's no contradiction between being a capitalist and being a hippie. He believes in free markets and free minds. But many of his customers disagree with his stance and belief that capitalism allowed humanity to prosper. They shop at Whole Foods in part because they assume it shares their political outlook. Now they're realizing that Mackey's views don't match their own, and they find it difficult to separate his views from the company's. Once more, Mackey's given customers a reason to shop elsewhere. And increasingly, there are plenty of other places where they can buy organic food. By 2014, as the economy recovers from the 2008 crash, the rest of the grocery business has joined the organic bandwagon. In a way, it's vindication for Mackey. He started Whole Foods in the hope of encouraging Americans to eat natural foods, and now the trend's taken root, in part because of Whole Foods success. Bigger rivals like Walmart, Kroger, Albertsons and Publix now have organic food on their shelves, too. But because these supermarkets are bigger, they have more purchasing power than Whole Foods. And they're using that leverage to sell organic food for less. Organic food sales totaled some $30 billion.
- [11:06]
John Mackey
In the US last year, and suppliers can barely keep up with demand.
- [11:10]
David Brown
Earlier this week, the nation's largest retailer, Walmart, announced that it would slash prices of some of its organic products by 25%. To add salt to the wound, Walmart's licensed the Wild Oats brand for its own range of organic produce. Yep, the same brand Whole Foods ended up relinquishing to settle the FTC's antitrust concerns. Now it's being used to undercut Whole Foods in price comparisons. Shoppers find Whole foods charges around 25% more than Walmart does for similar organic products selling natural foods used to set Whole Foods apart. Now that differentiator is gone, and the chain needs to find new ways to stand out and grow sales. It starts a wine club and proposes adding beer gardens and mini golf courses to stores. It creates a rating system for how food is grown to help shoppers make purchases that align with their own values. It also runs its first national ad campaign promoting the chain's values compared to its latecomer rivals. Investors are unimpressed. They want Whole Foods to be competitive on price with rivals like Walmart and Trader Joe's. But Mackey and his executives don't want to do that. Whole Foods is used to living off high profit margins. Cutting prices means foregoing that markup, and they doubt the price reductions will attract enough extra shoppers to compensate for the lost profits. Now, everything is obviously easier with hindsight, and it's no different here. Years later, Mackey himself would concede that Whole Foods should have cut prices when the recession started. It's natural to try and hold on to what you have when things are good. But that unwillingness to change can sure come back to haunt you. Just ask Kodak. Remember, it used to be one of the biggest brands in photography, but it dragged its heels when it came to digital cameras because it feared losing the fat profits it was making from photo processing. End result? Kodak lost out in the shift to digital. And for Whole Foods, its high price image problem is about to get a whole lot worse. It's May 2015, and an undercover investigator is roaming the aisles of a whole Food store in New York. He works for the city's consumer affairs team, and in his basket, he's got some prepackaged berries, vegetables, and chicken tenders. And now his investigation needs some cheese. The server at the deli counter smiles at him. Hey there. What can I get you? The investigator noticed some pieces of cheddar that have already been sliced off the block, wrapped and priced. Get me that piece of cheddar over there. Yeah, yeah, that one. Thanks. This investigator's job is to check whether the city's grocery stores are using tricks to overcharge customers. Tricks like tipping the scales or mislabeling prepackaged food. With his shopping list complete, the investigator returns to the office and begins to weigh everything he bought. But he already knows what he's going to find. When he picked out his chicken tenders, he noticed the label said every package weighed the same. But it is almost impossible for all those packs of chicken to weigh exactly the same, and the price customers pay should reflect the accurate weight. When the investigation's findings are released, the story catches fire. This is really adding up to hundreds of dollars, potentially a year for consumers. The overcharges, DCA says, range from 80 cents for pecan panko to $14.84 for coconut shrimp. The violations are so pervasive and so extensive that we've had to expand the scope of our investigation. Whole Foods, the grocery store that sold itself on its ethics, has been Caught conning its customers, Mackey makes a public apology and the company pays a fine of a half a million dollars. The company puts the problem down to under trained staff verifying the waits, which also means it undercharged as well as overcharged customers. But it's not the first time the company's done this. A year earlier, Whole Foods got fined for doing the same thing in California. The scandal shakes COC confidence in the brand Sales dive Nationwide same store sales had been growing at more than 3% a quarter, but after being exposed for overcharging, that growth collapses to less than half a percent. All of which adds to the sense that Whole Foods has lost its way. It's struggling to cling on to once loyal customers. Its high prices, outspoken CEO and overcharging have slowed its growth to a crawl. Investors are losing patience and this time something will have to give. We've all been there sitting through another mind numbing presentation. You know the kind, tiny text you can barely read. Templates and slide transitions straight out of the 90s. But here's the thing. Your presentations don't have to put people to sleep. With Canva presentations, you can create something that actually keeps your audience engaged. We're talking stunning templates you can customize in minutes, not hours. 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- [17:35]
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- [18:41]
David Brown
It's May 2016 and in Redmond, Washington, the Microsoft CEO Summit is underway. Every year this tech giant brings together business leaders to discuss economic trends. And this year, Whole Foods CEO John Mackey is on a panel with Amazon founder Jeff Bezos. As they wait to be called on stage, the two CEOs strike up a conversation. They chat about their shared love of fantasy novels and scuba diving. Bezos suggests some places for Mackey to go dive. Then he suggests he and Mackey get together sometime and talk about Whole Foods. Mackey knows Amazon wants to get into groceries. It already owns a fresh food delivery service called Amazon Fresh. It recently launched a same day delivery service called prime now that sells fresh food. And it's about to start a chain of grocery stores called Amazon Go. Mackey likes and admires Bezos, so he says, sure, let's meet up. But Bezos never calls. Mackey soon forgets about his brief encounter with the Amazon CEO. After all, he's pretty busy trying to get Whole Foods out of its funk. And he's got a plan to get the company back on track. The company's going to open a new kind of Whole Foods store starting in Los Angeles, hip Silver Lake neighborhood.
- [20:03]
Market Analyst
Jana Limblom got here early to be one of the first through the doors of Whole Foods newest store. Whole Foods is calling it 365. After 365, their well known value price line. Inside, lower prices are posted everywhere like $3 for a watermelon and $4 for a barbecue chicken salad. At the same time, the company wants to hook a younger, hipper crowd. There's also hot coffee and cold beer grab and go items and a vegan restaurant.
- [20:29]
David Brown
Whole Foods thinks its smaller 365 stores will bring in younger customers with its lower prices. The company's stock rises on the news, but growth remains weak. In summer 2016, Whole Foods reports another three months of sluggish growth. And as 2017 begins, it's clear that the 365 stores won't provide the sort of transformation Wall street is craving. With no turnaround in sight, tensions flare inside Whole Foods. Some board members and executives agitate for Mackey to step aside. He refuses, and most of the board refuses rally behind him. But the bad News keeps on coming. In March, a Barclays analyst claims that since 2015, Whole Foods has lost 14 million customers to rivals like Kroger. And with the stock price down and investors downbeat, a fresh threat to Mackey's leadership swoops in. In April 2017, the activist investor Jana Parton buys nearly 9% of Whole Foods. It cost Jana close to $800 million, but it's sure it can turn that investment into big profits if it can push Whole Foods into putting itself up for sale. It's a few days after Jana Partners bought into Whole Foods. And in Whole Foods headquarters in Austin, John Mackey and his top team are face to face with Jana's representatives. Maggie listens as a Jana executive explains their plan to profit from Whole Foods. Whole Foods stock price is in the dirt. The company's headed in the wrong direction. We've spoken with other big shareholders and they agree with us. It's time for a change. Mackey fumes. Whole Foods is his baby. He built it. Now they stand here in his office telling him how it's going to be. He tries to stay calm.
- [22:29]
John Mackey
Can you share with us the presentation you showed our investors? We would like to address the concerns you laid out in that we can fix this.
- [22:37]
David Brown
You've had your chance to fix it. We've not invested nearly $800 million in Whole Foods to keep things as they are. We're here to take over, to take control of your board, to replace your management team. And once we've done that, we're gonna sell this business to the highest bidder. Mackey snaps.
- [22:54]
John Mackey
You're putting up propaganda to our investors. You're trying to destroy my reputation and Whole Foods reputation for your own self interest. You're only interested in making money.
- [23:04]
David Brown
That's generally the idea in business, Mr. Mackey.
- [23:07]
John Mackey
No, business isn't about a bunch of greedy bastards running around, exploiting people, screwing over customers and taking advantage of employees. You don't have to be a sociopath to run a business.
- [23:18]
David Brown
You finished?
- [23:20]
John Mackey
No. This isn't over. I'm not just gonna roll over.
- [23:24]
David Brown
But Mackey no longer gets to decide what happens to Whole Foods. Its shareholders do. So Mackey needs to convince them to stick with him. And to do that, he needs to offer a compelling alternative to selling the business. So Mackey and his team make changes fast. They replace longtime directors with independent outsiders, add new faces to the executive team, and promise to make the supply chain more efficient so in store prices can be lowered. The changes buy time, but little else. Jana is not backing off it's lining up potential buyers, including supermarket giant Albertsons, and Mackey can't be sure that the new board members will support him over Jana. He realizes that no matter what he does, Whole Foods is going to be sold. So he switches tactics. He and his executives consider their options. They could try taking Whole Foods private, but to do that, the company would have to borrow billions to buy out the shareholders. That much debt could break the business. So they look for potential buyers, hoping to find someone who aligns more with Whole Foods corporate ethos. Mackey meets the Albertsons team. They're keen, but he doesn't want to entrust them with the business he built. He calls up Warren Buffett, but the cherry coke swilling billionaire passes. He doesn't think he and Whole Foods are a good match. Mackey soon finds himself at a loss. A sale feels inevitable. Jana Partners is advancing talks with Albertsons and private equity firms, and Mackey's hunt for an alternative has stalled. He spends days hiking and meditating, hoping to figure out a solution. But none spring to mind. Until one morning he wakes with a start he knows exactly who to call.
- [25:32]
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- [26:22]
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- [26:59]
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- [28:01]
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- [28:12]
David Brown
I.com April 2017 Seattle, WA In a rental car, John Mackey follows the directions he's been given. They take him and his team through the city, over Lake Washington and into the tree lined suburb of Medina. As he reaches his destination, he realizes this just might be the end of the road for his Whole Foods journey. Everyone he started the business with is gone. His former girlfriend, Renee Lawson, left before the second store opened. Mark Skiles went next. Craig Weller retired. Mackey's father died 13 years ago. He is the last one standing. He reaches the security gate of a large lakeside property. The guards check him and the rest of the Whole Foods team for weapons. Then they direct him to a building where the team from Amazon are waiting. A few minutes later, Amazon CEO Jeff Bezos enters the room and the meeting begins. Mackey and his team make their case. They want Amazon to buy Whole Foods. Mackey stresses how the company is still the nation's leading premium grocery chain. It's got around 450 stores delivering gross profits of more than $5 billion a year. And despite its recent challenges, the brand is a recognized pioneer in organic food, animal welfare and healthy eating. The Whole Foods team then set out how the business would be better off as part of Amazon. They admit they've struggled with technology and loyalty programs. Amazon's a cloud computing powerhouse. In its prime loyalty program has 100 million members. Amazon could transform Whole Foods technological base. It could also integrate it into Prime. Next, they discuss Whole Foods high prices. As an independent company, the chain can't slash its profit margins without upsetting shareholders. But Amazon is big enough that investors won't freak out about that because those reductions would be barely noticeable in the earnings reports. And with lower prices, Whole Foods could grow again. Bezos asks what's in it for Amazon? Mackey says Amazon can benefit from Whole Foods grocery expertise and their affluent customer base. Their stores could become a brick and mortar platform for Amazon's wider ambitions. Finally, Mackie presses home the urgency. Albertsons is close to striking a deal to buy Whole Foods. If Amazon wants the company, it's going to have to move fast. Bezos promises they'll be in touch. Mackey and his team leave, hoping they've done enough to convince Amazon to make an offer. 48 hours later, Amazon comes back to Whole Foods. And one month later, a deal is struck and Amazon makes a major move. The online giant is buying whole foods for $13.7 billion. The upscale grocery chain known for its fresh and organic options will continue operating stores under its name. The company's CEO will also stay on board. The buyout stuns the markets. Amazon's move on the grocery business sends supermarket stocks tumbling, even in Europe, where Whole Foods presence is just nine stores. In Britain. Jana Partners is thrilled its move on Whole Foods has delivered it a profit of roughly $300 million. And Mackey himself makes about $40 million from selling his remaining stake in the business. Let's take a beat to look at what's just happened here. Faced with an inevitable sale, Mackey strategically pitched Amazon as the best buyer, beating out Albertsons, a buyer he was dead set against. If you're going to lose control of your business, it'd be best to make sure it's to someone who aligns with your vision. No, Mackey couldn't stop Whole Foods from being sold, but he could influence the outcome. In the year after the acquisition, Amazon makes rapid changes. Prices are slashed to make Whole Foods more competitive. The reductions erase the price gap between standard stores and the new 365 stores. So the chain abandons the 365 concept. Whole Foods checkouts integrate with Amazon prime so that members get extra savings and other benefits. The stores become pickup and delivery hubs for Amazon Fresh and Prime now there are changes behind the scenes, too. Stock options for lower level employees are eliminated. Store operations get centralized. This saves money, but ends the regional autonomy that Mackey thought encouraged innovation. The company also changes how it stocks shelves. In the past, stores received shipments on pallets. Employees would then spend hours in the back room preparing the products to be put on the shelves. But soon after the buyout, Whole Foods switches to a new approach called order to shelf. Under this approach, products arrive at stores ready to be put straight onto the shelves. And stores only get enough product to fill those shelves. The idea is to reduce labor costs, avoid excess inventory, and shrink the size of the back room, all while keeping those shelves stocked. But that's not how it plays out at Whole Foods. Instead, across the country, shoppers are confronted with lots of empty shelves.
- [33:47]
Whole Foods Customer
Here in Boston, people are complaining they haven't been able to get their English.
- [33:50]
David Brown
Cucumbers or their sweet onions.
- [33:52]
Whole Foods Customer
They haven't had tofu in one store.
- [33:54]
David Brown
For an entire week. Many customers blame Amazon for the shortages, but the change actually predated the takeover. It was part of Mackie's attempt to convince shareholders not to sell the business. It just happened to come into effect after the takeover. Whole Foods blames the shortages on unexpected weather and a jump in customer traffic after the price cuts. But there was another factor at play, too, because as part of the change, Whole Foods banned store employees from refacing. What is refacing, you ask? Well, you know how supermarkets always seem to have full or nearly full shelves. That, at least in part, is because of refacing. When items run out, grocery stores often fill the empty spaces on the shelves with items that are in stock. This is known in the business as refacing, and it creates an illusion of abundance for shoppers. Whole Foods thought stopping refacing would better alert its employees to the need to order more stock and reduce customer confusion about what items the stores carry. Instead, customers were shocked to find those barren shelves. Amazon promises to fix the shortages quickly, but it adds to a sense among some older customers that Whole Foods just isn't the brand they once fell in love with. The increased centralization means the stores all feel the same. Shoppers now battle with Harry delivery drivers to grab items off the shelves. And the checkouts ask for their prime membership details. But the sales figures tell a different story. One of a remarkable comeback. When Amazon bought Whole Foods, it had annual sales of $16 billion. But with lower prices bringing customers back, sales rise by more than a billion dollars in just two years. And the changes keep coming as the 2000 and twenties begin. Amazon pushes Whole Foods to expand the products available through its private label brand 365. By selling more private label items, Whole Foods can reduce prices by lowering production costs instead of shrinking its profit margins, something it can't do with outside brands. Amazon also starts selling the 365 range in its online store. But as Amazon grows the profits, Mackey's growing frustrated with his reduced status. It's February 2021 and Mackey is in Whole Foods headquarters in Austin. Thanks to Covid, the building is deathly quiet. Most headquarters office workers now work remotely. Mackey sits at his desk and logs onto his video call. Dave Clark appears on the screen. Clark's the bespectacled CEO of Amazon's Consumer Business division. He's been with the company since 1999 and is credited as the architect of Amazon's E commerce warehouse operations. He's also Mackey's boss. Mackey used to answer to a board of directors. Now he's an Amazon employee and he needs Clark's sign off on big decisions. And today, Mackey has an ask that needs Clark's approval.
- [37:08]
John Mackey
Dave, I want our corporate team back in the office. It's been almost a year of remote working. There are vaccines. Now it's time to get people back.
- [37:17]
David Brown
Clark looks skeptical. But let's Mackey continue.
- [37:20]
John Mackey
This work from home policy is hurting our culture. What message are we sending store workers when we tell them they must go back to work while the corporate team stays at home? It says we're not in this together. It says we value them less. That undermines our culture and creates resentment.
- [37:34]
David Brown
Clark sighs. John, we've been over this. It's too soon. We're not ready to sign off on this. Amazon's not doing this yet. But Mackie won't let go.
- [37:44]
John Mackey
Dave, I can't speak for Amazon, but I can speak for Whole Foods. I know what makes our culture work. Remote work is not good for us. It creates a two tiered system within our company.
- [37:54]
David Brown
John, I told you, we're not doing it, okay? I am fed up with arguing about every little thing. The answer is no. Sometimes, John, you just need to be a team player and do what you're told.
- [38:06]
John Mackey
I don't think that's fair. I don't argue about everything. Give me another example of when I've argued with you.
- [38:10]
David Brown
John, you are literally arguing with me about whether you argue with me. And I don't have to list any examples. I work with you. I know it's true. And everyone at Amazon knows it's true too, John. If you didn't want to give up control of Whole Foods, you shouldn't have sold the company. The words hit Mackie like a slap in the face. It's a wake up call. He might be the guy sitting in the CEO's office, but he's no longer in charge. Whole Foods isn't his baby anymore. It's all grown up and maybe it doesn't need him anymore. Mackey is left torn and anguished. Should he stay or should he go? Can he really let go of the company he nurtured from idea to multi billion dollar success? He wrestles with these questions for months. Eventually, in September 2021, he announces he will retire from Whole Foods the following year. But the Decision brings the 68 year old executive no relief. As his departure day nears, he wonders if he's made a mistake. Eventually, in the summer of 2022, he goes on a week long spiritual retreat in the mountains. There, alone with his spiritual guide and her two cats, he seeks answers by taking mdma. As the drug softens the world into dreamlike euphoria, he feels ready to explore his tangled feelings about Whole Foods. He longs for love and to feel at peace. Instead, he feels anger. An anger that's festered in the shadows of his heart since Amazon bought Whole Foods. He realizes that since the sale, he's felt disempowered, disrespected. Then he dives below the anger to the subtler emotion that lurks beneath. And that emotion is something very much like guilt. Guilt at his own failure to protect Whole Foods from being sold. Guilt at being unable to defend his creation. After more rituals, breath work and psychedelics, he experiences a revelation. He concludes he's being too hard on himself and he has to forgive himself. He leaves the mountains at peace with his decision. In September 2022, Mackey leaves Whole Foods. His 42 year entrepreneurial journey is over. He set out to change how America eats. And he succeeded. Organic food is no longer rare. It's now in every major supermarket. What used to be a hippie curiosity is now mainstream. And Whole Foods played a critical role in making that happen. Now, Whole Foods story will continue without him. Just over two years later, January 2025, Whole Foods workers at one Philadelphia store are now unionized, making them the first organized labor within the Amazon owned grocery chain. More than half of the employees at the 21st street and Pennsylvania Avenue location who cast ballots voted in favor of unionizing. Whole Foods released a statement saying it's been more than 20 years since the Whole Foods store in Madison unionized. Now the union's back. Employees at the Philadelphia store voted 130 for the union, 100 against. Those voting for the union hope it will lead to higher pay and a return to the benefits package and staffing levels that existed before Amazon took over. It's another sign of how the fuzzy feelings people had about Whole Foods in the noughties have dimmed. It's not hard to find folks talking about how the chain's lost some of its charm, especially when everyone from Aldi and Albertsons to Target and Walmart stocks organic food. But in business, consumers vote with their dollars all day, every day. And on that ballot, Amazon's Whole Foods is thriving. Sales are up more than 40% since 2017. The chain now has revenues in excess of $20 billion a year and more than 530 stores in the U.S. canada and the U.K. the stores are leaner and more efficient and more affordable. The values are still there, too. Whole Foods still demands higher than usual standards of its suppliers, and in 2019 it became the first national grocery chain to ban plastic straws. No, it's no longer the rebel supermarket with a swashbuckling CEO who dabbles in New Age mysticism and psychedelics. But it has made the transition all successful rebels seem to make. It's become the establishment. And you can see that on the streets of my hometown of Austin. Now, these days, only longtime residents can remember where the first Whole Foods store used to be, and many of those long timers are gone. But in an intersection with a vinyl record store on one corner and a progressive leaning bookstore on another, you'll see the Whole Foods flagship store and world headquarters inside, with an accent on local vendors, fresh locally grown food and groovy artwork. The curated Austin cool illusion is shattered a bit at the checkout scanners where you're prompted to enter your Amazon prime information or use a pre registered fingerprint. But the crowds keep coming, many just to say they've shopped there. No, you tell visitors this isn't where it all started. This is just where it is today. A few Fourths of July ago, I stood with a friend overlooking Ladybird Lake at night, marveling at the Austin skyline as colorful drones formed the shape of the Texas flag and simulated fireworks to dazzle the crowds. We both stood there in awe of how different Austin looked from how it did just a few years back. And then my friend said something that stayed with me. Yeah, Austin keeps on growing and growing, but I wonder what for? I've thought about that many times sitting in my truck in traffic, watching a train lumber by on its old route down to Mexico, just as it has for generations. You know, some days it's hard not to think that train just might get to Mexico before I'll ever make it home from Wondery. This is episode three of the Whole Foods Rebellion for Business Wars. We've used many sources for this season, including the whole story by John Mackey. A quick note about the recreations you've been hearing. In most cases, we can't know exactly what we're said. Those scenes are dramatizations, but they're based on historical research. I'm your host. David Brown. Judy Cooper and Tristan Donovan of Yellow Ant wrote this story. Research by Marina Watson. Sound design by Kyle Randall. Fact checking by Gabrielle Joliet. Voice acting by Chloe Elmore and Brent Williams. Our managing producer is Desi Blaylock. Our senior managing producer is Callum Plews. Produced by Tristan Donovan of Yellow Ann. Our senior producers are Emily Frost and Dave Schelling. Karen Lowe is our producer emeritus. Our executive producers are Ginny Lauer Beckman and Marshall Louie for Wondery.
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Lindsey Graham
As a contractor for the nsa, Edward Snowden had access to a range of top secret government programs. But as he learned more about these clandestine operations, he came to understand a devastating secret the government was conducting mass surveillance on its own citizens. Hi, I'm Lindsey Graham, the host of Wondry show American Scandal. We bring to life some of the biggest controversies in US history. Presidential lies, Environmental disasters, Corporate fraud. In our latest series, Whistleblower Edward Snowden changes the national conversation about privacy on the Internet as he risks his own freedom and his family's well being. Follow American Scandal on the Wondry app or wherever you get your podcasts. Listen to all episodes ad free and be the first to binge the newest season only on Wondery. You can join Wondery plus in the Wondery app, Apple Podcasts or Spotify. Start your free trial today.