Whole Foods local suppliers not sold on Amazon’s ‘order-to-shelf’ system

Locally produced hair products, desserts and catering have drawn South Side residents to the aisles of the Englewood Whole Foods since its experimental opening two years ago.

Buying local has been a major selling point for customers who want to support their neighbors. And at the store’s grand opening, Mayor Rahm Emanuel promised it would mean more jobs and opportunity for local entrepreneurs.

Some local suppliers whose partnership grew out of the Englewood location feel unsure about what to expect since Amazon acquired Whole Foods. Since e-commerce giant took over, prices have gone down, and sales have gone up nationwide. And the company promises to maintain relationships with their local suppliers.

“Our goal has been to make healthy and high-quality food affordable for everyone,” Whole Foods spokesperson Betsy Harden said, adding that the company added 700 new partnerships with small suppliers in 2017, thanks in part to its Local Producer Loan Program.

But the grocery chain has also had glitches with their local suppliers along the way.

More than a year ago, it adopted an “order-to-shelf” system. It’s actually an old practice recently reemerging among retailers, which involves supplying in smaller batches to potentially reduce labor and inventories. A Business Insider report found the program resulted in empty shelves at Whole Foods — something Chicago suppliers have noticed.

Iris Patterson, an Englewood native, said she’s heard from customers that her Iris Botanicals natural hair-care products haven’t been restocked in time to meet customer demand at the Englewood Whole Foods.

“I had a friend to go in who said, ‘I’m getting ready to buy your hair butter,’ and he was like, ‘Man the shelves are naked but they’re taking names, phone numbers,’” Patterson said. “Or the stores will reach out and say, ‘Oh my God, your products are sold out. Can you get it here ASAP?’ But if you would have had product stocked in the back it wouldn’t be an issue.”

Demetria Hayden doesn’t mind. When her Altogether Lovely hair products run low, she likes that she gets a notice in time to re-stock.

“In the beginning, clients would call and they would say your products aren’t on the shelf. Now when they run low, they send out an email for an order,” Hayden said.

Patterson noted that often the general public has more information about what’s happening at Amazon than local suppliers.

“Local vendors aren’t learning anything from Amazon at all, it’s been mute,” Patterson said. She first began selling her hair products at Whole Foods when it opened in Englewood location — eventually expanding her reach to five different locations.

She said local vendors have been depending on each other to share “nuggets” of information and news articles, using a private Facebook group and word of mouth. Patterson and other vendors have subscribed to Amazon-related Google news alerts to stay informed. The lack of inside information concerns her.

“We know now that Whole Foods cannot be the end-all. We need to make other plans, we need to start looking at other retail stores, just in case,” Patterson said.

LaForce Baker started his plant-based meals business, Moon Meals, five years ago. and he sold his products at the South Side Whole Foods up until last December, when he pulled out of the partnership. The decision wasn’t because of Amazon’s acquisition, but a “strictly business” move because he was not given freedom to raise his prices to cover his increased cost of ingredients.

“A larger supplier that’s selling across the country can spread those losses, but for a smaller, local supplier like myself, there’s really nowhere to spread that out,” Baker said. “You end up having to eat that cost and what that ends up being for the supplier is you have to lay off people, you might shrink your selection.”

Baker said he has continued his partnership with other grocery companies — Jewel and Mariano’s.

Meanwhile, some suppliers hold out hope that the Amazon acquisition could make it easier for them to expand their products to different regions.

Fallon Johnson runs a natural aromatherapy business, Annie Bell Fragrances. In 2016, she expanded distribution of her scented candles to the shelves at Whole Foods. Although she hasn’t reached out to Whole Foods about her goals to expand her products throughout the Midwest, she thinks they’ll continue to be helpful to grow small businesses.

“Since Amazon acquired Whole Foods, my business has increased,” she said.