Whole Foods goes with the wind

By Bruce Horovitz, USA TODAY
Whole Foods Market is about to put some serious wind in its sales.

The trend-setting, natural foods grocery chain on Wednesday will announce plans to become the largest buyer of wind energy credits in North America by purchasing credits equal to 100% of its projected energy use for 2006.

That will make Whole Foods the only Fortune 500 company to purchase renewable energy credits — which subsidize the production of energy from renewable sources such as wind — to offset 100% of its electricity use, says the U.S. Environmental Protection Agency says.

“In the corporate world, this is huge,” says Kurt Johnson, head of the EPA’s Green Power Partnership. “When a market leader does something like this, others will emulate.”

Like most businesses, Whole Foods can’t get its power directly from renewable energy sources. Instead, it is contracting to purchase 458,000 megawatt-hours of the renewable energy credits.

One credit represents one megawatt-hour of electricity from renewable sources. Producers of such energy sell the credits through brokers; the proceeds help offset the additional cost of generating electricity that way rather than by burning fuels such as coal.

Wind energy is the fastest-growing source of electricity in the USA. The Whole Foods purchase will help avoid more than 700 million pounds of carbon dioxide pollution in 2006, says the EPA. That’s the rough equivalent of taking 60,000 cars off the road, the EPA says.

“From a branding perspective, it’s a stroke of genius,” says Barbara Brooks, president of the Strategy Group, a consulting firm. “It shows they understand where their customers are coming from not only nutritionally, but environmentally.”

Whole Foods declined to state what it spends on utilities or what it’s paying for the wind credits. In the 41 states with programs to promote credits, residential customers typically pay a 2-cent premium per kilowatt hour for them, while many business customers pay a 1-cent premium or less, says Lori Bird, senior energy analyst at the National Renewable Energy Laboratory, a Department of Energy contractor.

Whole Foods’ purchase equals 458 million kilowatt hours, and it gets no tax advantage for it.

The move comes at a time when more Fortune 500 companies are trying to project a “greener” image, including General Electric, whose CEO Jeffrey Immelt recently pledged to decrease pollution and double R&D spending on cleaner technologies.

Whole Foods isn’t doing this altruistically. Most grocery stores are massive users of energy. As the 180-store chain grows, Whole Foods is increasingly being asked by its environmentally minded customers and employees what it is doing to limit energy waste, says Michael Besancon, the regional president overseeing the chain’s green efforts.

“We’re looking to show our customers and team members that we walk our talk,” says Besancon.

Requests to help wind energy showed up on Whole Foods customer comment cards, says Quayle Hodek, CEO of Renewable Choice Energy, from whom the chain bought its credits. “Comments like, ‘Wind power is cool,’ matter to (Whole Foods) because it matters to their customers.”