Whole Foods is famous mainly for two things: having lots of organic food products for sale and being very expensive. Recently, they have been introducing a comprehensive system of conveying to their shoppers the environmental and social attributes of their food. In this system, dubbed “Responsibly Grown,” Whole Foods gives farmers credit for various features of their production process, environmental stewardship, and overall treatment of farm workers. In doing so, Whole Foods is taking an important step toward informing customers and rewarding growers. This comprehensive approach has organic farmers very upset. However, Whole Foods is on the right track and we would all win if more retailers and producers mimicked their idea.
A segment of consumers prefers organic produce because of either their environmental beliefs or mistaken ideas about organics being healthier than conventional produce. However, organic is only one of many possible attributes of food products about which consumers may care. Consumers also care about attributes such as whether the food product was locally produced, was imported, is “all natural,” contains whole grains, has added sugar, contains artificial sweeteners, contains various food additives that some people believe to be unsafe, is gluten free, is GMO-free, is vegan, is “fair trade,” and on and on.
Even caring about the environment is not a simple, one-dimensional thing. Organic food production puts fewer chemicals into the environment. However, conventional agriculture uses less land to produce a set amount of food (thus allowing more land to be preserved in its natural state) and may even have a smaller carbon footprint in many cases because of the efficiencies from operating at a larger scale. There is also a big difference between a small-scale local organic farmer growing a mix of commodities on a few acres and some of the corporate, monoculture organic operations that are now in business. In some places (say, California), water conservation (which is part of what Whole Foods is now measuring) is probably more meaningful to both the environment and people than organic production.

The produce section at a Whole Foods Market in Woodmere Village, Ohio. (AP Photo/Tony Dejak)



Whole Foods is also giving farmers credit for actions that protect farm workers. That issue has nothing directly to do with organic versus conventional production, but again seems worthy of inclusion in a summary measure of the social and environmental attributes of food likely to matter to Whole Foods shoppers. After rating its suppliers on an entire panoply of the type of social and environmental factors mentioned here, each product is awarded a simple label: good, better, or best. Whole Foods clearly hopes such a simple rating system will be a hit with its shoppers while also incenting its suppliers to adopt new practices in order to achieve a higher rating.
As reported by Stephanie Strom in the New York Times, organic farmers are very upset by this more comprehensive approach that Whole Foods is taking to communicate the positive attributes of their various food items. Apparently, organic growers believe their attribute to be much superior to any other and object to that status being simply one part of a larger set of attributes worthy of consideration by consumers.
Their reaction shows a severe lack of confidence in their product. After all, Whole Foods will still label their products with the Certified Organic label, so if that is all consumers care about then they will still buy the organics and Whole Foods’ labeling system will be a failure. It is safe to assume Whole Foods is tracking the products with good, better, and best labels to see if those with higher ratings experience increased sales. Since there has been no change in the labels that convey the organic attribute of products, if the Responsibly Grown labels impact sales then Whole Foods is correct in taking a multi-attribute approach to labeling and the organic farmers are wrong.
A wonderful thing about free markets is that they strive to satisfy the myriad of preferences that wildly differing consumers hold. Organic farmers seem to believe that consumers (at least at Whole Foods) rank organic products above all others. Whole Foods believes otherwise and is seeking to provide consumers with some additional information. The best part of this dispute is that the victor will be declared by millions of consumers voting with their dollars.