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How Whole Foods Transformed Its Relationship With United Natural Foods

http://www.fool.com/investing/general/2013/02/19/how-whole-foods-transformed-its-relationship-with.aspx

Brian Richards
February 19, 2013

Two weeks ago, I interviewed Whole Foods Market (NASDAQ: WFM) co-founder and co-CEO John Mackey in front of a live studio audience at Motley Fool headquarters. Mackey had just published Conscious Capitalism: Liberating the Heroic Spirit of Business with co-author Raj Sisodia and stopped by our Alexandria, Va., offices on his book tour.

I recommend Conscious Capitalism. It's part philosophy, part memoir, and part management theory, and it includes Mackey's own anecdotes of turning Whole Foods into a $16 billion business with more than 70,000 employees (called "team members" at Whole Foods).

The aim of business, argue Mackey and Sisodia, is not merely to profit; it is to serve all key stakeholders, including customers, employees, suppliers, local communities, the world, and, yes, shareholders.

One candid section (pp. 116-117) in the book comes when Mackey recounts his experience with one of Whole Foods' key suppliers, United Natural Foods (NASDAQ: UNFI). In the following video clip, someone from our live studio audience asks Mackey about the evolution of the Whole Foods-United Natural relationship. (Run time: 3:49; there's also a lightly edited transcript following the video.)

Audience question: I know you talk in your book about United Natural Foods and your relationship -- it seems to have progressively gotten better as time goes on, which is interesting to me because they hold such a market-leading position in the distribution of most of what you sell. So I wondered, first, could you talk a little bit about that relationship, maybe shed some light into managing your relationship with management there? And then from a long-term perspective, where do you see your relationship with United Natural Foods going in the long term?

John Mackey: Well, I'll talk a little bit about it but I'm not completely comfortable talking about it too much, for lots of reasons. ...

UNFI, for a long time we had a typical relationship with them which is not unusual, which is somewhat of a mistrustful, adversarial relationship, which -- think about, say, the W