The Pencils IRA Project is dedicated to building a portfolio of promising businesses that can be followed and replicated by both young and new IRA investors. Each holding of the Pencils IRA Project must meet the five pillars of a "megagrower" business -- purpose-driven business, innovative products, visionary leadership, increasing cash-flow production, and strong company culture -- with significant potential to create stakeholder value and substantially beat the market over the long haul.

Whole Foods Market (WFM) has had a rough go of it lately. Whole Foods shares tumbled nearly 20% earlier this month after the company reported mediocre quarterly results. While the market has lost interest in Whole Foods in the short term, I see tremendous potential for the company to beat the market in the coming years. 

1. Purpose-driven business
Founded in Austin, Texas, in 1980, Whole Foods has long strived to exemplify its motto: Whole Foods, Whole People, Whole Planet. Whole Foods co-founder and co-CEO John Mackey literally wrote the book on conscious capitalism, serving as a key proponent of the notion that a business should include the well-being of all stakeholders -- customers, employees, shareholders, community, environment, suppliers, and so forth -- in its definition of success. Says Mackey: 

We want to improve the health and well-being of everyone on the planet through higher-quality foods and better nutrition, and we can't fulfill this mission unless we are highly profitable. Just as people cannot live without eating, so a business cannot live without profits. But most people don't live to eat, and neither must businesses live just to make profits.

2. Innovative products and services
Today, Whole Foods is the premier national brand when it comes to the offering and selection of high-quality natural and organic foods. With 379 grocery stores in the U.S., Canada, and the U.K. -- each averaging 38,000 square feet in size -- Whole Foods has a big and expanding base to serve an ever-growing demographic of health-conscious consumers.

According to the USDA, U.S. organic-food sales grew 11% in 2012, and a recent report from TechSci Research projects that the organic-foods market will grow at an average annual rate of 14% through 2018. 

With its growing national and global presence, Whole Foods has helped bring organic and natural foods to the mainstream market. The company's decentralized business model encourages innovation and an entrepreneurial spirit, leading to some wild (but oftentimes successful) ideas such as adding bars to some stores. This innovative culture has played a major part in Whole Foods' success and current annual sales of $13.6 billion.

3. Visionary, experienced, involved leadership
Much of Whole Foods' innovative environment owes to the leadership of co-founder and co-CEO John Mackey, who operates with the understanding that purpose inspires people. Fellow co-CEO Walter Robb joined Whole Foods in 1991 and, along with Mackey, is among the top five insider owners. In 2003, Mackey was recognized as the "Entrepreneur of the Year" by Ernst & Young, and in 2011 Businessweek named both Mackey and Robb "Businessperson of the Year."

With a record 114 stores in the company's development pipeline, Mackey and Robb maintain a long-term outlook with Whole Foods. The company now expects a total of 500 stores to be opened by 2017, representing just under 10% annual store growth over the next three years. Management believes the company can open and support 1,200 stores in the U.S. alone. In addition, Mackey and Robb have set the goal for Whole Foods to bring in $25 billion in revenue by 2019. 

Experienced and innovative management with a proven record of delivering results is exactly what I like to see. We get all of this with Mackey, Robb, and the leadership team they have assembled at Whole Foods. 

Foolish final thoughts
Whole Foods has an exceptional leadership team with decades of combined experience in the industry. Whole Foods is leading the way in the growing retail field of organic and natural food, exemplifying a purpose-driven business spearheading innovation. For these three reasons, I am excited to add Whole Foods to the Pencils IRA Project.