The Wall Street Journal reports that Amazon-owned Whole Foods is mulling a return to the use of company-owned centralized commercial kitchens that would make food sold from its food bars and refrigerated cases.
The story notes that “Whole Foods said in early 2017 it was closing three commercial kitchens, part of a broader effort to streamline operations and cut costs before Amazon acquired the company later that year. One of the kitchens had previously received a warning from the U.S. Food and Drug Administration for potential contamination and microorganism growth.
“After the FDA warning, Whole Foods closed the kitchen temporarily for a deep clean and discontinued the processing of meat, poultry and raw seafood in that facility.
“The company said in 2017 that the decision to shut down the kitchens wasn’t related to food-safety issues. Since the closures, the grocer has used outside suppliers to make most of its prepared foods, a practice common in the grocery industry.”
Now, the Journal writes, the retailer seems to believe that “operating its own kitchens could help Whole Foods better control the quality of its multibillion-dollar prepared-foods business, and the grocer is also considering buying existing kitchens.”
Some context from the story:
“Whole Foods’s prepared foods, such as pizza and soups, traditionally have been a draw for shoppers, and the Austin, Texas-based company has a team that formulates recipes for ready-to-eat and prepackaged meals. It sells some region-specific items, and its prepared foods follow the company’s quality standards that prohibit ingredients such as high-fructose corn syrup.
Partly by using suppliers, Whole Foods has expanded its prepared-foods business in recent years, launching catering services, expanding its bakeries’ cake lineups and selling meals online. The company also runs in-store eateries such as coffee bars and wine bars … Whole Foods executives have signaled plans in recent months to improve the shopping experience for its customers. The company is expanding in-store demo and sampling programs, according to a memo sent in February to grocery brands. Executives recently told suppliers at a virtual summit that they want to bring back excitement to stores as the company plans to open about 50 locations.”
KC’s View:
I’d be curious to know if this is about quality and availability, or if it is about reining in costs.
I’ve never been a big fan of Whole Foods’ prepared foods. I think they’re okay, and better than some supermarket prepared foods, but that’s not exactly a high bar. It is like they’re just a better version of vanilla, not anything unique and challenging and innovative.
So mark me down as skeptical. Willing to be convinced, but not yet persuaded.
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