Mackey, John

Chief Executive Officer of Whole Foods

B orn in 1953 in Texas; son of William S. (an accounting professor and hospital-management company executive) Mackey; married Deborah Morin (a software consultant and yoga instructor). Education: Attended Trinity University, the University of Texas—Austin, and one other college, c. 1971-78.

Addresses: Home—Austin, TX. Office—Whole Foods Market, Inc., 550 Bowie St., Austin, TX 78703-4644.

Career

O pened health-food store and restaurant, SaferWay, in Austin, TX, 1978; opened Whole Foods Natural Market in Austin, 1980, and became chief executive officer of Whole Foods Markets, Inc., with a 1992 initial public offering of company stock.

Sidelights

J ohn Mackey is the founder and chief executiveofficer of Whole Foods Markets, Inc., the largest organic and natural-foods grocery store chain in the United States. Known for their immense size and commitment to educating consumers about the foods they eat, Mackey’s stores have a devoted customer base, and his company enjoys some of the highest profit margins and growth figures in the entire grocery industry. A rather uncommon CEO, Mackey is unapologetic about his commitment to social justice and environmental causes, and he believes that companies like his can be leaders and effect positive societal change. “Business is always painted as the bad guys,” he asserted in a New York Times Magazine profile by Jon Gertner. “They’re the ones who are greedy, selfish, the ones who despoil the environment. They’re never the heroes. Business never will be accepted by society as long as business says it has no responsibility except for maximizing profits.”

Mackey was born in 1953 in Texas, and grew up in the Houston area. His father was an accounting professor but later became chief executive officer of a hospital-management company. Following his graduation from high school in 1971, Mackey attended three different schools, including the University of Texas at Austin, studying philosophy and religion because, he told Wendy Zellner in a Busi-nessWeek interview, “I was searching for the meaning of life.” He eventually settled into an experimental living arrangement known as a commune, which were in fashion in the 1960s and ’70s. At this Austin commune, called Prana, he was first introduced to vegetarianism and became a convert himself. “It was the first time I realized what you ate could affect how you felt,” he told Business Week’s Zellner.

In 1978, with then-girlfriend Renee Lawson Hardy, Mackey opened his first health-food store. Their seed money came from a small inheritance of Hardy’s, and another $20,000 borrowed from Mackey’s father, and several more thousands of dollars invested by other family members and friends. Called Safer Way, the store was located in a three-story building in Austin; the couple opened a health-food restaurant on the second floor, while the third floor served as their living quarters. “We didn’t even have a shower,” he recalled in a Fast Company story by Charles Fishman. “Renee and I would take showers in the Hobart dishwasher in the restaurant, you know, using the spray hose.”

Mackey eventually decided to scuttle the restaurant business and join forces with two other investors to open a much larger Austin store in 1980, called the Whole Foods Natural Market. It caught on quickly with local residents, partly because it offered convenient one-stop shopping—Whole Foods sold all the standard health-food store items that were free of preservatives, processed flour, refined sugars, and other additives, but the store also stocked some foods that were traditionally spurned by other health-food stores on principle, such as sugar, coffee, and even red meat. The enterprise was nearly ruined by severe flooding in Austin in the spring of 1981, which put the shelves under eight feet of water, but loyal customers stopped by to help clean up the mess, and Whole Foods reopened for business just a month later.

In the 1980s, Mackey and his partners expanded Whole Foods into other Texas cities, such as Houston and Dallas, and then moved into Louisiana, North Carolina, and northern California. The company became publicly traded in January of 1992 with an initial public offering of stock, traded on the NASDAQ under the ticker “WFMI.” The infusion of cash allowed Mackey to expand the number of Whole Foods stores, either by building new ones or acquiring competitors. Several smaller chains around the country—including Fresh Fields on the East Coast and the California-based Mrs. Gooch’s— were folded into the growing Whole Foods empire.

Rebellious and a maverick by nature, Mackey was determined to create a workplace based on the model of the commune, where all worked together, resources were shared equally, and a common goal served as an underlying principle. Intrigued by Japanese management styles, Mackey read scores of books on the subject during the 1980s and borrowed the team-based approach used by many major Japanese manufacturers for managing his workers. Each Whole Foods store had eight teams, and any new hire went through a month-long trial period before their suitability for permanent employment was put to a vote by the other team members. Two-thirds approval was necessary, and team members often sought out the hardest workers to join, because regular wage increases and bonuses were linked to team performance.

Even Whole Foods’ corporate board was called the National Leadership Team, and Mackey rarely overruled the decisions of its 24 members. He also proved surprisingly movable on certain issues: When a hardline animal-rights activist challenged him at one stockholders’ meeting, he began investigating her assertions by reading all available literature on the issue, and he came to see her point of view when she claimed Whole Foods was not doing enough to avoid the horrors that plague many farms that raise animals for food. He was stunned, for example, to learn that the supplier of ducks to Whole Foods for the past decade housed the birds inside, and at his urging the farm began to construct ponds.

Mackey’s company continued to grow, and in the first years of the new century consistently posted impressive sales numbers on a per-square-foot basis. Wall Street analysts also liked the fact that there was phenomenal sales growth from year to year even for existing Whole Foods stores. There have been a few missteps along the way, however, such as the 2006 revelation that for the past eight years Mackey had been posting messages in a Yahoo message board devoted to finance issues, consistently praising Whole Foods and deriding its competitors, such as the Colorado chain Wild Oats, which it later acquired.

Detractors and even some ardent Whole Foods loy-alists complain about the chain’s prices, and it even has an unofficial nickname, “Whole Paycheck.” “Everyone thinks we cater to the rich, but it’s really not true,” Mackey told Fortune in 2007. “We cater to the well-educated. The reason is that for people to change their dietary habits requires that they be well informed.”