Why did the grocery giant Whole Foods drop Chobani Greek-style yogurt?
The reason suggested by the Wall Street Journal: Whole Foods wants to move towards disclosure of all genetically modified ingredients. Chobani uses milk from cows that eat genetically modified corn and soybeans, which Chobani says is the only way it can produce enough yogurt to supply the burgeoning market.
But the New York Times in its analysis makes it clear that the corporate bottom line, not sustainability concerns, is driving this decision. Whole Foods acknowledges it wants to phase out the popular Chobani brand and replace it with a house brand, which would have a far higher profit margin. In other words, it was a hard-edged business decision, not about any concern over GMOs or its customer base.
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But the best way for Whole Foods to cash in on that fashionable, high-margin product? Make the stuff itself. That way, it can offer all the custom new options it wants, without sharing profits with a global brand. It’s also easier to control pricing on private label stuff, which Whole Foods is finding increasingly important as it enters more urban areas, and is more profitable to begin with.
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