Bloomberg News

Whole Foods Co-CEO Says Capitalism Needs to Be Redefined

January 15, 2013

Few CEOs would say too many companies “focus on solely maximizing profits.”

Then again, Whole Foods Market Inc. (WFM:US) founder John Mackey is no ordinary corporate chief. He’s a self-styled “conscious” capitalist and has a new book in which he tells all about it.

“The time is now to redefine capitalism if we want to continue to flourish as a society and to reverse the decline that we are currently in,” said Mackey, whose book -- yes, “Conscious Capitalism” -- comes out today.

Mackey and his co-author, a Bentley University marketing professor named Raj Sisodia, discuss ways to create value and lift people from poverty. Mackey’s bottom line: Making money need not be a zero-sum game.

“Let’s face it, most businesses’ purposes have been distorted,” he said in an e-mail interview.

Mackey, 59, has long been a maverick. In 1978, the college dropout opened a natural-foods store in Austin with then girlfriend Renee Lawson Hardy. They called it Safer Way, a spoof on Safeway Inc. (SWY:US), which operated grocery stores nearby. Two years later, Mackey and Hardy partnered with two other grocers and merged their stores to form the original Whole Foods.

In 1984, the company began expanding beyond Austin, gobbling up regional grocery stores and chains until it became the largest natural foods store in the U.S. There are more than 340 Whole Foods locations in the U.S., Canada and the U.K. Along the way, Mackey has funded small farmers and food makers, educated customers about organic food and over-fished species and created a preservative-free house brand.

Money Machine

None of this prevented him from turning Whole Foods into a money machine. Sales rose 16 percent to $11.7 billion in the year ended in September, the third straight year Whole Foods generated revenue growth of at least 12 percent. Since going public in 1992, the shares have soared more than fivefold.

Mackey says he practices what he preaches at Whole Foods by capping executive pay at 19 times the company’s average hourly wage. For the four years up to 2011, he earned $1 in salary and received no bonus. Whole Foods has no corporate jet.

Mackey hasn’t entirely escaped controversy over the years. In 2007 he was outed anonymously criticizing competitors online. At the time, Whole Foods said Mackey made the postings under an alias to avoid having his comments associated with the company and to avoid having others place too much emphasis on his remarks.

In the book, Mackey and Sisodia laud Costco Wholesale (COST:US) Corp., Google Inc. and Southwest Airlines Co. (LUV:US) for also practicing conscious capitalism.

“Corporations are widely seen as greedy, selfish, exploitative and untrustworthy,” they write.

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net


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Companies Mentioned

  • WFM
    (Whole Foods Market Inc)
    • $37.64 USD
    • -0.78
    • -2.07%
  • SWY
    (Safeway Inc)
    • $34.5 USD
    • 0.02
    • 0.06%
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