When you think of your typical Whole Foods (NASDAQ: WFM) location, what type of neighborhood comes to mind? For most people, the answer is easy, whether it's in the city or the burbs: wealthy.
Not surprisingly, these types of neighborhoods have helped Whole Foods grow from an industry outsider two decades ago to the most important grocer on the country's landscape. And perhaps no city is a better blueprint for what Whole Foods hopes to accomplish than the greater Chicagoland area, where there are currently 19 Whole Foods locations.
Here's what the breakdown of each location looks like, given their unique zip codes.
Even outliers can be explained away, like 60626, which is located in South Evanston. It should be pointed out that this particular location used to be a Wild Oats before Whole Foods acquired the chain. Its close proximity to the wealthy zip code just to the north accounts for a large base of business.
As a whole, these locations clearly represent a better-off demographic than the average American community, and help explain at least some of Whole Foods' success.
But lately, many are worried that the company has become a victim of its own success. "The company is simply running out of wealthy neighborhoods, and competition will take away the lower-end customers," the bears say.
Time will tell if that's true or not. But for those looking for a crystal ball into the future, one location in American Southeast could be the closest thing we have to glimpsing into Whole Foods' future.
Welcome to Savannah, Georgia
On Aug. 13, 2013, the city of Savannah, Georgia, opened its very first Whole Foods location. The store is located on what used to be a lot for car sales, but had since been abandoned following the Great Recession.
Though it's still early in the game for the company, any success that Whole Foods experiences in Savannah could be a huge deal moving forward. That's because the location isn't anything like what many think of as a "typical" Whole Foods location.
And in case you were thinking that this location could benefit from some wealthy neighbors, consider a few key facts. Though Hilton Head is just 30 miles from Savannah, the wealthy South Carolina tourist hub already has a Whole Foods.
What's more, the three zip codes that share a physical border with this particular Savannah Whole Foods location are similar in makeup. The median household income across the three averages to roughly $36,000, with 27% living in poverty, and 32% having obtained a college degree.
How to succeed in unlikely areas
There are lots of strategies and assumptions underpinning Whole Foods' plan in Savannah. It might surprise some to know that, typically, Whole Foods has focused far more on an educated population rather than a wealthy one -- though the two tend to be highly correlated.
But with this move, the company is deviating from the plan. One possible explanation is that the healthy food movement has become so prevalent -- it's the champion cause of our First Lady -- that those without a college education are also well aware of the benefits of healthy eating.
The company is also creating a highly tailored experience for patrons in Savannah as well. For instance, the building reflects the historical Victorian architecture of the South, there is a mural on the side of the building painted by local college students, the Parlor -- a beer and wine lounge/bar -- serves many local specialties, and a mobile kitchen stands outside to offer food for those on the run.
The company itself does not break out sales for specific locations, so its difficult to get an immediate reading on how well the store has fared in its first full year of operation. And by being located in Wisconsin myself, a trip to Savannah -- tempting as it sounds in autumn -- isn't in the cards.
If you do live in the Savannah area, leave a comment in the box below to let us know about your experience. The most important thing for investors to watch is if the company keeps the store open or -- even better -- if it rolls out more locations in Savannah because of its initial success.
John Mackey, co-CEO of Whole Foods Market, is a member of The Motley Fool’s board of directors. Brian Stoffel owns shares of Whole Foods Market. The Motley Fool recommends Whole Foods Market. The Motley Fool owns shares of 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.