Part 2: Is Whole Foods Destruction Assured?

Part 2: Is Whole Foods Destruction Assured?

[Part 2 of a 3 Part Series – read Part 1 here]

Let’s get a little further into what will either bring about the end, or a complete revolution of Whole Foods. In my last blog, I talked about how changes in the organic industry and the expansion of Whole Foods lead to too little differentiation in the quality of organic produce offered at Whole Foods versus stores like Wal-Mart and Costco, because these stores now offer similar quality at lower prices. Amazon could save the company by providing the “better than organic” many of their customers crave (not just organic certified but a small farm, regionally grown and biodiverse). However, it seems to be moving in the opposite direction in an effort to provide lower prices. The problem is, a premium brand will never win a price war. 

In this blog, I want to cover something near and dear to my heart, the future of small brands at Amazon Whole Foods. I have so much to say here that I decided to cover my next topic–how Amazon Whole Foods could become the largest cannabis banker in the country virtually overnight—in the third blog of this series. It’s worth the wait. Not only would it be an incredible evolution of the company, as you will know by the end of the third blog, it could be easy for them to do.

The Whole Foods Experience: Getting to Know Small Brands

Part of the value-added proposition of Whole Foods has always been a better shopping experience. Their stores are beautiful in comparison to most supermarkets. And, you could always count on meeting the founders (or people who knew so much about the brand you mistook them for founders) of small, new brands from your area. They would be doing demos and chatting with you about how the company started and what makes their products special. The personalization of it made the sampling experience much better than the lunchtime rush at Costco.

Small brands and Whole Foods

Colleen demoing our new mix-ins with one of our favorite customers 🙂

Whole Foods Started Changing Small Brand Rules Before Buy-Out

Whole Foods had already set into play some new rules that were squeezing small brands before the Amazon buyout. Consider this shipping change in 2016. If a small brand located in California is asked to ship one, small box of product to a store in NYC, the brand is required to do that and to pay the shipping cost. In the past, the brand could set a minimum amount a store had to order, which allows brands to spread the shipping costs over a minimum number of items. The new “no minimums” rule might be okay for a very high cost, lightweight item, but if your coconut hand cream sells to Whole Foods for $10 (your profit is $5) and the shipping is $12, you’ve just gone in the hole big time. However, if you could set a minimum order of 12 units, the shipping might average to closer to $1 a unit, even with the extra weight, which still leaves you with some decent profit.

Impact of Amazon and Whole Food on food industry

Amazon Has New Discount Requirements That Will Cost Small Brands Big Bucks

Fast-forward to the post-buyout era. Amazon needs small brands at Whole Foods so it keeps its promise of a premium shopping experience, otherwise, it becomes a smaller version of a traditional supermarket. And yet, it is talking about and testing new rules that will threaten the financial health of small brands and interfere with their ability to market to their customers. On the cost side, let’s first consider discounts. All brands are required to discount their products four times a year at Whole Foods. That discount is tricky because if you have a long shelf life, customers will sometimes “forward buy”, which means they only buy at a discount. This takes much of your margin. But that’s not new, I just wanted to complain for a minute.

What’s different now is Amazon is looking to assess a fee of $7,500 to set up that sale (also called a “temporary price reduction” or TPR) for all “national” brands. It defines a “national” brand as selling in 4 or more Whole Foods regions. That may be okay if you are a large company selling a staple such as sugar or ketchup, or even organic cheddar bunnies. But if your product is lower volume, say walnut butter or fennel olive oil (okay, I made that up but doesn’t it sound good!), or you are new and building brand recognition, that TPR fee could be many multiples higher than you anticipate your revenue would be from the product sold, even more so after the discount.

Financial Analysis Whole Foods and Small Food Brands

Another hit from Amazon is that companies with $300,000 in sales to Whole Foods per year (translate that into maybe $80,000 in gross profit after taking out the cost of making the product and discounts) are now required to cut their prices 3% so Whole Foods can permanently discount products. Three percent may not sound like a lot but that could equate to 10% of the gross profit on $300,000 in sales. That is money they would use to pay employees, utilities and the sales team.

In-Store Demos May Become Even Less Common

Demos have always been a very expensive and inefficient marketing method when you look at the cost per person reached. And, the value of in-store demos declined significantly with the rapid growth of shopping and delivery services like Instacart.

To make demos worth the cost, the person doing the demo has to be extremely well-versed in your brand and all its nuances. It’s best to use your own employees, but that isn’t workable for most companies (most small brands have very few employees and they are all located in one city). So instead, they use a 3rd party company that ideally is specialized in natural foods and understands the link between health and food, and how your brand fits into that picture. Otherwise, your $125 demo turns into nothing more than a manned snack station for hungry shoppers.

But now Amazon is rolling out a new rule where brands, with some exceptions, have to use one demo company under contract with Amazon for in-store demos. Here we have a conflict of who is boss and who is paying because their goals are clearly different. The brand pays for the demo, and its goal is to have people buy its product. But the demo company wants its boss, Amazon, to be happy. Amazon generally wants shoppers to be happy, which means they may be less committed to seeing your brand do well, and more interested in shoppers generally having a good in-store experience. We will see how this unfolds in the coming months as the first couple of regions get started on this new system. I was recently part of a webinar where a broker reported that many smaller brands have stopped doing in-store any demos at Whole Foods because of this change.

ZEGO focuses on whole food for children and families

What Are Small Brands Going to Do?

As I said, not all of these changes have been rolled out yet, but some smaller brands are pulling out of Whole Foods already. They are quickly being replaced by well-known, national brands more often associated with a supermarket. In fact, some brands are pulling out of retail altogether and putting all their efforts on online sales. A broker told me last week that several of her brands that did just that in 2017. The problem is, margins are so low for food companies in retail stores due to the cost of making the sale (sales team, brokers, required discounts and extra fees distributor fees) that some companies are deciding the extra hassle just isn’t worth the small profit the yield.

What impact will Amazon and Jeff Bezos have on Whole Foods and small brands

What Would Get You to Start, or Continue Shopping at Whole Foods?

I’d love to hear from you. If you’ve been a Whole Foods shopper, why do you or don’t you still shop there? Would you be more or less likely to shop there if they decreased the number of small brands in favor of large ones but also dropped their prices? Please share your comments!

Colleen Kavanagh is the founder and CEO of ZEGO, a superfood-based company making “free from” snacks that fit most every special diet need–from severe allergies to gut disorders to diabetes–with superior food safety and transparency. You can find our products at www.zegofoods.comSave 20% with coupon code “springbreak20” through March 28, 2018.

 

ZEGO is a B Corporation – Why This Matters!

ZEGO is a B Corporation – Why This Matters!

We have big news to announce – ZEGO is now a B Corporation! I love talking about our company because ZEGO is so much more than delicious, Free From snacks. But it’s hard to convey all we hold dear in a Tweet or Instagram post. If you had the time, I would want to tell you we are a family-based business that grew out of a desire to provide delicious and nutritious snacks that are safe for nearly everyone to eat–no matter your dietary restriction, that we are passionate about providing food safety data through dynamic labeling, and how we use our labels to communicate food safety information to you. I would tell you we believe you have a right to know what is in your food and encourage you to demand it from all the companies you buy from – especially when it comes to toxins like glyphosate or cross contact with allergens. 

I would want you to know that we are about more than transparency, nutrition and taste. I would want you to know that we work hard to support U.S. farmers by buying locally and regionally grown food for our products. We use our packaging to inform consumers how they can advocate for a cleaner food supply, and that we donate 2% of our revenue to improve nutrition for low-income kids. As you see, it takes us awhile to tell people about all we do, which is why we are so happy to be officially certified as a B Corporation!

What is a B Corporation anyway?

B Corp for business is similar to Fair Trade or USDA Organic for food, but much broader. It covers how you treat your employees, your corporate governance, and your commitment to protecting the environment and giving back to your community. Because not every question on the assessment is relevant to every type of company, to get certified you must score 80 points out of 200. ZEGO scored a full 113!

Being B Corp certified allows us to use one symbol, the B badge, to show that we care about a lot more than profit. It means that we strive to make our business a force for good in our community and in our world.

B Corporation

Why Did We Get B Corporation Certified?

We didn’t get certified as a marketing tool. We got certified as a B Corporation because it’s not enough for ZEGO to be an independent “good guy” company. To be a force for good, we need to join forces with other B Corp food companies to define new, higher standards both in food labeling and food / social responsibility. By working together, we can encourage other food companies to follow the same path. The benefits will be felt for generations. 

It is part of our bigger commitment to always improving and setting the standard for transparency for food companies!

What Does Our Being a B Corporation Mean to You?

We have been doing the things that B Corp certified us for since we started ZEGO back in 2013, but it does make a difference to be certified. The certification actually holds legal weight as it is woven into your corporate legal structure. Most importantly, because re-certification is required every two years, you can be confident that as we grow, we will hold true to our values. 

B Corpoartion ZEGO Snacks

How You Can Help

So, here is our call to action for you — It truly matters if you support companies that are making a difference by how they do business. It’s simple, we can’t be a force for good if we don’t have enough sales! So when you are choosing which product to buy, look for the B Corp logo, help us spread the word about ZEGO and other B Corp companies, and ask other companies that you love to consider getting certified! Most of all, thank you for your support.

Why I Run with ZEGO – My Favorite Running Snacks

Why I Run with ZEGO – My Favorite Running Snacks

As a runner, protein running snacks that nourish my body are a necessity. And since I run frequently it needs to be something that tastes good too. While you usually get to hear from Colleen, I’m very excited to share why I choose to fuel my runs with ZEGO, but first, let me introduce myself. My name is Danielle and I have the pleasure of helping run the day-to-day operations at ZEGO. Since I started two years ago, we have added delicious new flavors and grown as a company.

How My Love of Running Began

I first started running in college with the sole goal to get in shape for my wedding. I would run the same two loops around both Willow and Watson Lake in Prescott, AZ. None of my friends were into running, so this became my “me time”. After college, I moved to Indiana, got an office job, and needed a way to release tension, clear my mind, and stay in shape. Running was a clear choice as it was something I had grown to love – It’s a great way to explore new cities and meet new people.

I soon registered for my first half marathon – The Mini-Marathon, which is the largest ½ marathon in the country! Race day arrived and, as luck would have it, it was one of the hottest and most humid days on record! I was missing that the crisp, high desert air. A couple hours later I crossed the finish line feeling depleted and unhappy with my time. I told myself I was never going to run another race again. But that feeling didn’t last long as I soon forgot how miserable I was and could only remember the adrenaline of race day. Since then, I have run several other halfs, and I completed my first full marathon this past February at the beautiful Surf City course in Huntington Beach. With all this training, I have certainty been victim to injuries, and come to know snacks to avoid, snacks to live by, and that post-run high runners love to talk about. Running gives me time to myself, and allows me to decompress.

On most days, you can find me and my dog, Kaibry, running through Golden Gate Park or the Presidio in San Francisco. Currently, I am training for the San Francisco marathon in July, and ZEGO bars fuel every single one of my long runs.

What I Look for In A Running Snack

Thankfully, I do not suffer from severe food allergies like many people these days, so I don’t have to think about allergies when I choose a running snack for my pack. However, I still care about what I put in my body. Success as a runner, especially a long distance runner, relies on being able to provide your body with healthy fats and protein, along with being quick and accessible.

If any of you are runners, athletes, or just always on the go, you know how hard it is to find a snack that gives the right answers to the questions:

  • Are there artificial ingredients or “natural” flavorings?
  • Is it Organic / Non GMO?
  • Is it gluten free?
  • Is it loaded with too much protein for your body to easily digest?
  • What is the sugar content (too much and/or poor quality)?
  • Does it contain artificial sweeteners?
  • Does it contain animal products?
  • How does it taste?

That list doesn’t even cover the various food allergies or other restrictions you might have!

As you can imagine, most sports drinks and energy snacks do not check all the boxes, which is why I am so thankful for ZEGO bars. Not only do they pass the taste test, but they also have a delicious flavor and great texture – and I’m not just saying that because I work for ZEGO! 😉

Why I Choose ZEGO When I Run

ZEGO bars do not contain any natural (or artificial) flavorings, which is incredibly hard to find. In fact, “Natural Flavorings” is the fourth most common ingredient found on food labels. It outranks other common ingredients like salt, water, and sugar! CNN has a great article explaining why natural flavors aren’t as “natural” as they sound – and they do a great job breaking down the very slight differences between natural flavors and artificial ingredients.

ZEGO bars also meet the Organic / Non GMO criteria. The Seed+Fruit bars are certified Organic and do not contain GMOs. All of the Just Fruit and Fruit+Chia bars are also certified Non GMO, which is perfect for keeping your snacks as clean as possible.

Every ZEGO bar is certified vegan, which means no whey protein or other animal products. This allows our bodies to digest the bars easily. As a runner, the last thing I want is to consume something that is going to upset my stomach. The protein in ZEGO bars is from Sacha Inchi Seed protein – which is amazing! It contains more omega 3 fatty acids than salmon, and is also the least processed protein on the market.

But no matter how good for you a bar is, it doesn’t do any good if it is unpalatable. I can’t tell you how many pre or mid run snacks I have purchased only to spit them out because they taste terrible. Seriously, though, every ZEGO flavor is amazing (and again, I promise I’m not just saying that! 😉 )

Right now, I am gearing up for the San Francisco marathon, and have been enjoying a ZEGO Apple Cinnamon bar before every run. On my long runs, I like to hide a spare ZEGO Chocolate bar in my back pocket to refuel, along with a ZEGO Just Fruit Raspberry bar. These are perfect refreshing snacks that will give you just the right amount of energy boost to finish out those last couple of miles. Bonus – they don’t melt, so they travel well in your pocket or car!

What Fuels Your Run?

Whether you run, play sports, or are busy on the go, I can’t recommend these bars enough. I mean, how can you go wrong with a snack that tastes delicious, is loaded with easily digestible superfoods, and is changing the food industry by providing unprecedented levels of transparency. (Curious about what I mean by transparency? Take a look here to learn about how we’re revolutionizing the food chain and industry!).

Why do you choose to run? Have you tried ZEGO snacks as your running snack option? We love hearing from you, so keep sharing your pictures and stories with us! It helps us stay motivated and encourages us to continue to “Raise the Bar”.

ZEGO’s New Lemon Ginger Bar Features Anti-Inflammatory Spices

ZEGO’s New Lemon Ginger Bar Features Anti-Inflammatory Spices

Ever since I started ZEGO, people have been asking me to create a savory flavor for our organic line. I’ve been pondering on this on and off for years. What would complement what we have but be a distinctly different and delicious flavor? And, what ingredients could I add to it that would be soothing to the belly and promote the health of my customers? The answer struck me on an unusually warm Spring day, as I was preparing my breakfast — ginger tea with scrambled eggs, spiced with turmeric and pepper.
I had started including ginger and turmeric daily in my diet when I read about their healing properties. Ginger is wonderful for soothing your gut and ginger and turmeric are two of the most powerful anti-inflammatory spices around.


Every time you eat something that irritates your gut, it becomes inflamed as your body rushes to heal it. If you keep getting exposed to those foods, you become chronically inflamed. That can lead to a host of problems from constipation to IBS to depression and anxiety. Avoiding everything that can irritate your gut (which would include stress) is nearly impossible, so it’s a good idea to have a long-term, consistent approach to managing it with something natural, like herbs and spices.
Regularly consuming anti-inflammatory herbs like turmeric, ginger, cloves and rosemary, can go a long way to helping keep inflammation in check. The best part is that you don’t have to take them as a supplement. A recent study showed that eating them at normal levels used in cooking had significant benefits (see this great video explaining the study). But how do they work?


Both ginger and turmeric have powerful antioxidants to fight off free radicals that can wreak havoc on your health and lead to inflammation and disease. But turmeric isn’t absorbed well if you just take a pill or drink it in tea. Black pepper, something it is traditionally paired with in recipes, raises your absorption rate of turmeric by and incredible 95%. And, since turmeric is fat soluble, it is essential to consume turmeric with fat as well.
The fresh, minced ginger we use in our new recipe doesn’t require the support team turmeric does. On its own, ginger has been clinically proven to naturally help prevent and treat nausea, infections, ulcers, some cancers (in lab tests), and increase insulin sensitivity. It also helps your digestion move along at a healthy pace.

 

The last part of our secret sauce is organic lemon oil. Lemons have long been valued as essential to health. Lemon oil may be the most powerful anti-microbial of all the essential oils, which would help you fight infection. It also improves digestion, calms the stomach, and promotes weight loss. But to be totally transparent, we mainly added it because it adds a delicious flavor to our new bar. Before you take your first bite, be sure to smell it. The lemon scent reminds me of my grandmother’s lemon squares.

 

So, allow me to introduce ZEGO’s new Lemon Ginger bar. Don’t mind the slightly orange-yellow color from the spices, that’s us taking care of you.

TRY ZEGO’s LEMON GINGER BAR NOW!

The Biggest Food Trends of 2017 and Our 11 Favorite Expo West Products

The Biggest Food Trends of 2017 and Our 11 Favorite Expo West Products

If you want to understand food trends, then Expo West 2017 was the place to be. My feet are bruised from walking on concrete floors and holding meetings in hallways for 3 days. I saw every one of a dizzying array of over 3,000 local, national and international companies showing their wares in Anaheim at the Natural Products Expo West show last weekend. It was amazing to see so many products all in one place! 

Overall, the message of the show was clear – our bellies hurt, and our kids (and some of us) have serious food allergies. Those two things kept showing up again and again in the products we saw and tried. 

Trend 1: Probiotics

To help our digestion and improve our gut flora, probiotics and fermentation were suddenly the #1 marketing angle of new companies – replacing last year’s coconut waters (the most clever put probiotics in their coconut water). And it wasn’t just naturally fermented and cultured beverages, yogurts and cheeses, it was everything from jelly beans to cookies to tortilla chips, drinking vinegar to pickle juice! I’ll cover the nutrition issues with the added probiotics in another blog, because today I want to tell you about the trends and our favorite new products.There are questions to explore about whether added probiotics more marketing than health.So, let’s move on to the other trend—allergy friendly food.

Trend 2: Allergy Friendly

Now, just like with gluten free, this will take some navigating for the allergen community – not every company could tell me how often they test for cross contact and some seemed puzzled by the question. We hope to convince them of the value of batch testing and reporting the results to consumers through the QR code on the product package like we do at ZEGO in the long run.But the fact that there were a lot more companies marketing they are free from problematic ingredients and allergens is good news nonetheless!

After all, now that buyers for grocery store see this trend growing, they are more likely to buy more free-from products for their stores. This will make it easier for all of us to meet the needs of our special diet friends and family. Maybe allergy friendly will follow a similar path to gluten free, with the next step being an “allergy friendly” section in the store.

Our Top Product Picks

Enough about the trends, let’s move the really fun part – the companies and foods we loved! We are picky at our house, despite our many food intolerances and allergies, so when we say it’s good, we really mean it. Here is what Kelsey, my teenage daughter, and I want you to know in new products. (Note: please call these companies to confirm their allergy situation in the facility, salespeople at food shows don’t always have the correct facts!)

Artisan Tropic

Artisan Tropic Cassava and Plaintain Chips

Cassava and Plantain Chips. Free of virtually everything! The only other ingredients in their facility are Palm Oil, Salt, Cinnamon. This was the first one I ordered when I got home. You have to buy in bulk, but they are worth it! You can order on their website: http://artisantropic.com/

Artisan Tropic Product Sample

Hu Chocolate

Allergy friendly chocolagePaleo Chocolate? Yes! And it is the best we’ve ever had and no soy/dairy/refined sugars!

They are in distribution so ask you favorite store to start carrying them if they don’t already. And, check out their restaurant next time you are in NYC. https://hukitchen.com

 

Happy Camper

Happy Camper Gluten Free Bread

Fluffy, true sandwich bread. Seriously. You don’t even need to toast it and it is delicious! Some versions have added pea protein so be aware of that if you have a peanut allergy or a sensitive stomach. Free from most everything else. (www.happycampersgf.com)

Also in stores in Washington Oregon, Nor Cal, So Cal and on-line.

WholeMe

Snack Clusters – seriously good baked soft cookie clusters. Very clean ingredients, grain/gluten/soy/dairy free, contains peanuts and tree nuts. Lower in sugars than most similar products. We ordered these last night on-line.  www.wholeme.com

Nu Life 

Gluten Free FlourAll purpose flour and sorghum grain you can pop stovetop.

The popped sorghum is PERFECT for people allergic to corn, delicious and fun.

We had a warm muffin made from the flour and it was fantastic, but it does have tapioca and potato starch which can irritate tummies.

Free from milk/soy/peanut/gluten. Check on treenuts if you are allergic, they aren’t listed on the packaging, but I think they are free of these as well. http://www.nulifemarket.com

Veggie Noodle Co 

Allergy Friendly Veggie Noodles

No time to spirulize your veggies for your paleo meal? No worries, Veggie Noodle has a beautiful array of pre-spiraled options for you. Find them virtually everywhere east of the Rocky Mountains but not out West yet (sniff sniff).  http://veggienoodleco.com/

Froozer 

froozer fruit pouchesVegan frozen pops made from fruit and veggies. I ordered these in bulk already! Seriously, I just ordered $125 worth (bulk sales only on-line) – they are that good and my food allergy daughter is waiting by the door for them to arrive.  Colorado, So Cal, PNW, Louisiana and some in the NE states. www.froozer.com

Millies

Millies Vegan Ice Cream

Organic Vegan Gelato – most delicious ever of all the companies we tried. Egg/milk/soy/wheat but free some flavors contain tree or peanut and equipment is shared. Find them in San Diego and LA County but not on-line. Hopefully, they expand to your hood soon or you can pick them up on your next visit!

Noka

noka fruit and veggie pouchesSuperfood smoothie from fruit and veggies—better than juice because they retain their natural fiber.

Shelf stable! Use coconut but appear otherwise free of the top 8 allergens. https://www.nokaorganics.com/

Nurture Me

“Tummy Friendly” brand of hot cereal and cookies with added probiotics, gluten/dairy/soy/egg free. National distribution. https://nurturme.com/

Because

Whole Me Allergy Friendly Food

Best cookie and brownie dough we’ve tasted. Soy/gluten free, contains nuts. LA only and on-line. www.becausecookiedough.com

Do You Want to Try These? Enter to Win!

If you didn’t get to go to Expo West, don’t worry, we will bring the show to you! We are doing a giveaway Friday March 23 at 7pm ET, 4pm PT on Facebook Live. Turn in a leave a comment about which of these new products you are most excited about and we will randomly choose a winner to receive a gift bag with a selection of these amazing products for you to try!

Good Guts – A Promising Treatment for Autism

Good Guts – A Promising Treatment for Autism

Autism rates have dramatically increased over the past few decades, and more and more research is going into what causes it. A recent breakthrough has pointed to a surprising possible contributor: gut bacteria.

As I mentioned in my previous blog on gut bacteria, they are the symbiotic bacteria that help us survive and are a normal presence in the human body. Scientists and physicians are coming to regard them as an organ as vital as your liver and kidneys. Recent research has suggested that many children with autism have altered gut bacteria.

We already knew that autistic children are three and a half times more likely to have gut distress than other children. And a new study of 23 children with autism found that their bacteria produce toxic waste products not found in non-autistic children.  We do not know if autism alters gut bacteria or if gut bacteria cause or exacerbate it. However, new research published in the scientific magazine Cell from the California Institute of Technology suggests the latter.

The Institute injected a virus-like molecule into pregnant mice to trigger autistic-like symptoms in their children. They found that the newborns had altered gut bacteria, and, when the Institute treated them with healthy bacteria, their symptoms became less severe.  While this study is far from conclusive, it does suggest that there may be a causal relationship between having unhealthy gut bacteria and autism.

A recent Atlantic article also discussed how some doctors, like gastroenterologist Kara Margolis, have started helping regressing autistic children by treating their gastrointestinal tract rather than their mind. While it doesn’t work in all cases, it has worked in many. If your autistic child suddenly regresses, ask your physician about treating their gut.

While an ever-increasing body of evidence points to a strong gut connection to autism, there is no scientific consensus. Understanding how the gastrointestinal tract, normal microbiota, and diet affect behavior is one of the newest and most exciting medical and scientific frontiers. In the coming years, we will gain new knowledge about these relationships and how to balance them. However, there are a multitude of health benefits to having a healthy gut for anyone, so why wait to act? In addition to any other therapies used, we should provide our autistic kids with support they need to have good guts.