After Amazon acquired Whole Foods last fall, local producers said they have been feeling more pressure to meet higher sales expectations.
At least one Atlanta-based company recently announced it is going out of business. Industry analysts predict other small businesses that contract with Whole Foods may also see an impact from Amazon’s purchase of the grocery chain.
At an industrial office park in Norcross, AtlantaFresh Artisan Creamery founder Ron Marks shows off the facility where his employees made Greek yogurt.
“Literally overnight, we went from a $7 million to a $1 million company,” Marks said.
He said he was grateful for the support from the Atlanta-area and national fans of the product.
“It’s just torn my heart out. I’ve really been on an emotional roller coaster, especially since the decision was made that we need to shut down the company,” Marks said. “Even going through phases of sadness and anger going back to phases of denial that this really isn’t happening.”
About 20 Georgia companies are part of the local vendor program at Whole Foods.
Marco Martinez is president of 100% Artisan Foods. It’s a five-person salsa and tamales company based out of Chamblee that has had a contract with Whole Foods since 2011.
He said he has not seen an impact on sales, but more than 60 percent of his business is with Whole Foods.
He said he is now eager to diversify.
“That’s why this year, one of my projects, is to get more accounts because having all my business with one company, it could be risky,” Martinez said.
Retail industry analyst Kim Forrest said Whole Foods stood out from other supermarkets because of its focus on local vendors.
With Amazon in the picture, Forrest said she thinks there may be less of an emphasis on local produce.
“It’s been a real hallmark to bring in local food providers and that really connected the Whole Foods corporate to make a footprint and a lasting relationship with people in the neighborhood because you could go and get good-quality organics, but you could also pick up a jar of this or someone’s special cheese,” Forrest said. “That is a little too wishy-washy or not that corporate so they’ve been scaling that back.”
According to the Washington Post, suppliers have been asked to discount prices and pay more for in-store demonstrations.
Whole Foods said in a statement that it works with businesses to improve sales:
“We are always excited to bring new local products to our stores and customers, but, unfortunately, not all products meet sales expectations. When that occurs, we have ongoing conversations with the supplier to try to improve sales. In this case, we also made significant efforts across the business to increase sales, including in-store marketing, paid advertising, special promotions and expanded distribution. Despite our efforts, we are not always able to raise demand and we must occasionally make the difficult decision to discontinue products.”