Is Whole Foods Fumbling Its Marketing Play for Millennial Health & Nutrition Dollars?

Whole Foods

After losing 20 percent of their value in the last year, Whole Foods is hoping to tap into the buying power of the “thrifty” Millennial generation by opening a less expensive chain of stores in 2016.

Unfortunately, the famously overpriced health food store brand that is referred to nationwide as “Whole Paycheck” may be facing an uphill climb. Here’s why:

Millennials Shop Differently
In my last post 5 Ways Millennials Shop (and How It Affects Health and Nutrition Marketing) I explained that Millennials are less brand and channel loyal than other generations of shoppers. This is true whether they are buying household goods or organic produce. They want convenience and quality at a fair price, and they don’t care where they find it.

Many Millennials are strapped by student loans, struggling to find financial stability, and more and more often putting off marriage and kids, which means they are shopping for one. This combination of factors means Millennials must be super-savvy about how and where they shop—and they are. Millennials are not interested in conspicuous consumption, so they find no added value in buying from a trendy chain unless that chain offers something no one else does (see Trader Joe’s).

“Health Foods” Are No Longer a Luxury
There was a time when Whole Foods could afford to charge their customers a premium, because health food was considered a luxury item and loyal health food customers were fewer and farther between. Consumers who were concerned about gluten or who wanted all-organic shampoo or cleaning products had to hunt those items down, and they were happy to pay a little extra when they found them. At that time, Whole Foods made it easy for them to find them in one place, and that was what made the chain soar. But that was over 3 decades ago!! 

Times have changed, and people don’t consider health foods or organic products to be rare. Everyone knows someone who is a vegetarian or who has a nut allergy. People ask for gluten-free foods at chain restaurants on a regular basis, so “health food” stores like Whole Foods are now just another store. In my opinion, creating an entirely separate “affordable” chain simply underlines the fact that they’ve been gauging consumers. They could just be more competitively priced across the board rather than spending money on a rebranding effort.

There’s More Competition Than Ever
Quality natural, organic foods and nutritional supplements are now available almost everywhere the average consumer shops, including most grocery stores and even Walmart and Target. If Whole Foods isn’t going to win by being a luxury brand, and they aren’t able to offer unique products, the only thing left is to compete on price. And creating a “Nordstrom Rack,” outlet-inspired model is not a Millennial-only strategy. Every store that has been charging a premium for products with buzzwords like “organic,” “gluten-free,” and “hormone-free” is in for the same rude awakening as Whole Foods.

Today’s consumer isn’t wowed by the fact that a store offers health food; they are wowed when it can offer healthy products at a good price. If your health or nutrition store can’t provide value to customers of any age, they will keep walking.

Of course, no one knows exactly how the new Whole Food’s chain, 365, will perform among Millennials or any other group. And Whole Foods may have more up their sleeves than we know. Meanwhile, this Millennial health food shopper will continue shop-hopping to find the best deal.

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