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Whole Foods CEO John Mackey has promised to add $10 million to his chain’s annual budget to be used exclusively to support the growth of local and small organic farms.

"We believe this financial assistance of $10 million per year can make a very significant difference in helping local agriculture grow and flourish across the United States and in parts of Canada and the UK as well," Mackey wrote on the company’s web site late last week. The money will be used to make low-interest loans to farmers who have been concerned that Whole Foods’ use of larger organic farms threatened to put them out of business. While Whole Foods has come in for some criticism because of its use of larger organic farms, Mackey has maintained that the company buys less than a quarter of all its products from large corporate farms, and that it sources product from more than 2,400 independent farms.

“Whole Foods Market needs to do a better job of helping more local growers sell directly to our stores without going through our distribution center,” Mackey wrote, adding, “I know that over the years some smaller farmers have stopped selling to us and have been frustrated with our Regional Distribution Centers. We should and will do a better job of this in the future because we are making it a company priority.”

In addition to buying produce from local farmers, Mackey also said he would use the parking lots of at least some of his stores for open-air markets where these farmers can sell their wares.
KC's View:
Maybe we’re naïve, but this strikes us as Whole Foods putting its money where its mouth is…especially since Mackey essentially is going to allow open-air farmers markets to compete with the products he is selling inside the store.

Mackey isn’t just selling product. He’s selling an approach to life, and playing hardball and creating even the impression that he’s putting little guys out of business doesn’t do a lot to help his company’s image. So $10 million a year in loans is cheap, especially because Whole Foods creates more sources for more products that it can sell.

(Besides, it wouldn’t do for Whole Foods to be perceived as treating lobsters better than farmers.)

We think that consumers are more and more open to these kinds of narratives – stores that represent something more than just product on the shelf.