Will Whole Foods 365 Change the Industry?

April 20, 2016

Whole Foods will launch their first 365 store next month in the Silver Lake neighborhood of Los Angeles. Not familiar with 365? It’s a secondary grocery format being launched by Whole Foods, designed specifically for well educated “hipster” millennials. There are 15 or so stores slated to open in the United States over the next year and a half with locations in California, Oregon, Washington State, and Texas.

The store will have a smaller open format floor plan that will offer a large selection of private label “365” products with a more budget friendly appeal. Essentially they’ve stole the Trader Joe’s concept and decided to throw their brand on it. They also have plans to one up Trader Joe’s by enhancing the in-store experience with several local businesses within the grocery store. The initial plan includes an Allegro café, craft brew bar, instant tea kiosk, vegan restaurant, online ordering capabilities and Instacart.

There are mixed feelings about this innovative project. Some believe this will help transform Whole Foods keeping it relevant and profitable. Others think it’s a desperate attempt to rectify a dying grocery model. For me, this is the beginning of a retail revolution for grocers. One that is being led by the millennials.

But the more pertinent question is whether Whole Foods is making a viable decision. Is this the correct decision?

I believe it is. And I believe Whole Foods is going to lead the charge in which the entire industry will follow over the next 10 years. Why?

Because younger generations want healthy albeit affordable options. They also want an open floor plan, educated staff, more options, quality coffee, tea, beer, they want an enhanced experience. This is the type of luxury generation Y and Z value and will pay for.

I spent the weekend in New York City, I had the pleasure of visiting Whole Foods in Park Slope Brooklyn. This store is massive, with a plethora of unique options, an unbelievable selection of high quality coffee, tea, beer, cheese, wine, and healthy snack options. Their prepared foods set was incredible and incredibly fresh. Announcements for digital coupons were buzzing through the store and the shoppers were YOUNG middle class New Yorkers. They also sported a rooftop bar that featured 16 craft beer options and a great view of the city.

Although large, expensive, and not the same idea as 365, there are many similarities. Making the decision to shop at Whole Foods as a young person is a difficult one, and for some it’s not an option at all. But for those who are on the cusp, the 365 business plan will get those hesitated shoppers to at least attempt to shop there, and see if they can be cost conscious while still indulging on a healthy and option plentiful grocery experience.

If Whole Foods succeeds in this endeavor, I believe they will lead the way and become the go-to for the young and hungry generations. I also would not be surprised to see other key players take the same path, creating stores specific to the younger generations preferences. A very exciting time for the industry. Change is upon us.