March 13, 2018

Whole Foods Provider Loses Contract & Shuts Down

Last week, as many of you may already have heard, the news came out that AtlantaFresh, a provider of grass-fed non-GMO milk and cream based products. As reported by Food-Navigator, the 10-year old company had a 7 year contract with Whole Foods Market to sell their products.

That contract also stipulated that the contract could be terminated at any time which is what happened after 14-months when company’s products did not sell as well as anticipated in Whole Foods. This, in and of itself, is a painful reminder to carefully read and understand your contracts with your retailers. To add to this sad story though, AtlantaFresh had taken on debt in order to increase their production capability and Whole Foods made up the majority of their sales.

Outstanding debt, limited sales diversification, and a retailer terminating a contract was a trifecta this company couldn’t get out from under. And that’s terribly sad. A company which, by all accounts, was trying to produce food that was good for consumers and humane for the animals in its care, is a hard enough uphill battle to begin with.

Note, I am not laying the blame at Whole Foods feet. If AtlantaFresh had a more diversified sales channel that didn’t rely on Whole Foods so fully perhaps this could have been avoided. But, by the same token, a ‘smallish’ company like AtlantaFresh only has so many resources to devote and when a contract like this – 7 years with Whole Foods – chances are you jump at the opportunity and put your resources towards making that relationship work out. Who knows, perhaps the management team planned on diversifying their sales channel after they got over just one more hurdle in meeting Whole Foods production. How many of us have sat there and said ‘As soon as X happens, I’ll be able to focus on Y.’ So, by that token, there’s also no blame to be laid at the feet of AtlantaFresh.

All around, it’s just a really sad story in our industry.

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