Whole Foods Market (NASDAQ:WFM) is being increasingly pressured on price by traditional grocers such as Kroger and grocery-selling interlopers such as Wal-Mart. But while that risk can't be ignored, there's a larger concern looming. And the implications extend to suppliers of foods that are heavily dependent on pollinators, like WhiteWave Foods (NYSE:WWAV) and Hain Celestial (NASDAQ:HAIN).
The threat is called "Colony Collapse Disorder," and it's killing North America's bees at an alarming rate. The scariest part? Very litle has been done to address it, even with evidence that bee populations have been under serious threat for almost a decade. The White House only recently announced a plan of action, earmarking $50 million in the 2015 budget to fund efforts to study the disorder, and to double habitat acreage specifically developed for pollinators.
I spoke with Whole Foods Regional Forager and EcoCzar Lee Kane about the greater implications, as well as Whole Foods' "Share the Buzz" campaign to increase awareness and fund efforts to combat it.
Colony Collapse disorder is becoming more widespread, and the implications are clear: Loss of important pollinators like bees would drastically impact the production of more than 100 different kinds of plants that are grown for food, and account for $24 billion in economic activity in the U.S. each year. $15 billion of this is directly attributable to bee pollination. Globally, the number increases to $200 billion.
Whole Foods' Kane stressed one major point:
It's not like there isn't going to be any food. We can dispel the idea that we are going to starve without pollinators. But it's going to be a much more boring, colorless, and nutritionless world of food if pollinators die off.
So while we won't be facing starvation, dozens of our most healthy and beneficial foods would be threatened by the loss of pollinators. The bottom line is it's a very real -- and very serious -- problem, both ecologically and economically.
Why is this happening?
There isn't a clear, single cause of Colony Collapse Disorder, and the evidence is that a number of factors are at work. The biggest contributors include parasites, loss of habitat, and use of pesticides in commercial farming. There is a peculiar irony in that the loss of habitat and pesticide impact can be partly laid at the feed of the agriculture industry, which is heavily reliant on bees for crop production.
A large number of bee colonies in the U.S. are rented to farmers for pollination, and relocated to pollinate different crops at different times of the year. Bee rentals for pollination actually generates more total income for beekeepers than honey production, and the loss of bee populations is increasing the costs on farmers, as well as affecting crop yields. Two-thirds of the plant species grown worldwide as crops -- which make up about one-third of the food we consume -- require pollinators like bees.
Impact on the dairy aisle
It's not just foodstuffs like fresh fruits and vegetables that are at risk. Dairy products would be heavily affected, considering that dairy cows often live on alfalfa and clover, which require pollinators like bees. Whole Foods says the impact could be as much as 50% less dairy product available for consumption:
This would especially hit organic dairy producers and pasture-focused cattle producers, which rely less on mass-produced grain feed and more on plants like clover and alfalfa. Add in that yogurt and many other dairy products often contain fruit ingredients, and the impact to the dairy aisle is significant.
In other aisles, the impact will also be felt. Chocolate comes from the fruit of the cacao tree, which largely depends on bees for pollination. Coffee is much the same.
Non-dairy alternatives like almond milk are a fast-growing part of the food business, and almonds depend almost exclusively on bees for pollination.
Hain Celestial has a number of food brands that would be heavily affected by the loss of bees, including its MaraNatha nut butters, Almond Dream, and Greek Gods yogurts, all of which are heavily dependent on pollinators. Whole Foods partners including Hain Celestial have contributed $115,000 in 2014 as part of "Share the Buzz," in order to help combat Colony Collapse Disorder.
WhiteWave Foods is one of the largest makers of nondairy milk products, through its Silk brands. It also has significant exposure to the effects, through its Horizon organic milk, Land O' Lakes products, and International Delight creamers. Almond milk -- a key product for both Hain Celestial and WhiteWave Foods -- has seen its popularity surge in recent years. In 2011, sales of almond milk grew almost 80%, and it now makes up more than half of non-dairy milk sales, having surpassed soy milk sales. WhiteWave Foods' Silk brand is #1 in the category, and almond milk represents two-thirds of the company's category sales. Almond milk sales grew 52% for the company last quarter alone.
As you can see, the impact goes far beyond the produce aisle.
What's really at stake
Kane stressed that this is a larger issue than just what Whole Foods puts on its shelves:
That's what this campaign [Share the Buzz] is about as much as anything. Helping our stakeholders, including ourselves, to become more aware of all those things that are there because of the pollinators like bees. Things you don't stop and think about on a regular basis -- things you don't think about until you are confronted with a crisis, which is where we are right now. We are just trying to help people look at all of the different ways that they can take action.
It's hard to imagine a world without bees, even though it's a growing risk. It's also one larger than the potential implications for Whole Foods, its suppliers, and competitors.
Sustainable farming practices such as organic farming may not be perfect, and it's really not 100% clear what the health benefits are for consumers of organic products. However, Colony Collapse Disorder is another reminder that human activities have larger implications than we often realize, and loss of habitat and use of pesticides are two key contributors to the loss of bees.
Whole Foods and its partners are funding research and increasing awareness. Only time will tell if their efforts, and those of other organizations, will make a difference. Want to help? Check out Whole Foods' Share the Buzz website to learn about things you can do at home.
John Mackey, co-CEO of Whole Foods Market, is a member of The Motley Fool's board of directors. Jason Hall owns shares of Hain Celestial and Whole Foods Market, and holds both short and long options in Whole Foods Market. The Motley Fool recommends Hain Celestial, WhiteWave Foods, and Whole Foods Market. The Motley Fool owns shares of Hain Celestial, WhiteWave Foods, and Whole Foods Market. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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