Whole Foods on Tuesday will hold a summit for as many as 200 of its different suppliers amidst worry over how its business revamp is going to play out with Amazon.com its new owner.
Amazon’s purchase for $13.7 billion of the supermarket chain last summer shook the industry, creating great worries that the giant of e-commerce would create a disruption in groceries as it did with toys, electronics and books.
In its effort of restructuring prior to being acquired, Whole Foods earlier began requiring its suppliers to use a company of its choosing for restocking shelves and running promotions.
Whole Foods charges some of its suppliers between 3% and 5% of sales to cover costs of the broker services.
In addition, the grocery chain adopted a style similar to Costco Wholesale for sampling in-store, asking companies to pay a fee when Whole Foods offers free samples to customers, of their products.
The changes caused some of the small brands to become upset, but industry analysts say it should not be a surprise that under new ownership the grocery store chain is starting to act like a mainstream business.
A number of suppliers considered “mid-sized” have expressed support for the effort of Whole Foods since Amazon took over.
A spokesperson for Whole Foods said that the changes made directly address feedback that supplier partners shared during the years over challenges of the company’s decentralized purchasing structure and the inconsistent practices across different stores and regions.
Whole Foods, said the spokesperson, has worked the past two years streamlining processes across regional and global purchasing teams in order to ensure all suppliers are supported in a consistent company-wide group of protocols.
Whole Foods CEO John Mackey and members of the merchandising and marketing teams of the chain will host Tuesday’s summit.
The explosive growth at Whole Foods slowed after competitors Walmart, Kroger and other retailers began charging less for several of the organic, natural and niche products that at one time set apart Whole Foods from the rest, giving it an ability to charge higher prices.
Since its restructuring, Whole Foods replaced or has stripped power of regional foragers who first identified then nurtured smaller brands. Without the champions, several of those products have been and are being eliminated to create more space for faster-moving, bigger brands.