Whole Foods Market Inc. has pioneered the upscale world of better-for-you food retailing.
The company is taking a bold step further into foodservice as both a competitor and as a partner that will bring known restaurant brands into its stores.
The restaurant industry has watched the Austin, Texas-based grocery chain as an indicator of consumer trends, but the chain also turned itself into a destination for grab-and-go meals.
John Mackey, co-founder and co-chief executive of the 435-unit retailer, did not set out to create a foodservice brand when he opened his first store in 1980. But the stores have evolved to include a full-range of prepared food options, including hot and cold self-service bars, pizza, tacos, craft beers and even an in-house distillery producing organic spirits at one location.
Restaurant operators that share the chain’s emphasis on natural, organic and sustainably raised ingredients are also becoming part of the mix.
In October, Whole Foods made a minority investment in Los Angeles-based Mendocino Farms Sandwich Market, a fast-casual better-sandwich concept that will use the capital to continue expansion in Southern California.
In 2016, Whole Foods is scheduled to test the opening of Mendocino Farms outlets in select stores.
In November, a new Whole Foods market in Los Angeles opened with an outlet of the fast-casual restaurant Chego, a concept by famed chef Roy Choi.
Whole Foods is also launching a more value-positioned grocery concept dubbed 365 by Whole Foods Market, which will include more “friends of 365” restaurants renting space within the stores.
In a November call with Wall Street analysts, Mackey said the grocery chain’s focus on prepared food and exclusive brands will expand as the chain attempts to redefine the shopping experience.
“We are operating some of the highest-volume restaurants in the country, and no house brand comes close the quality standards of our exclusive brand products,” he said.
“Totalling close to $5 billion, or one-third of sales, our exclusive brands and prepared foods are key differentiators for us, and we plan to partner with our suppliers to widen our competitive advantage in those areas.”
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