John Mackey: Not Your Average Grocer

Dan Rather Profiles The Founder And CEO Of Whole Foods Market

(CBS) 
"When I would travel around and talk to the team members, they're always asking me, 'You know, John can we have this? Can we have that? What about this? Can we do this?' And I didn't wanna be daddy anymore. And that's kind of how they were, 'Daddy, daddy, daddy. Can we have this? Can we have that?' And I realized, why don't we let them decide for themselves what we'll have?" says Mackey.

But despite all his talk about empowering workers, the one thing he doesn't have in his stores is unions. He's quick to argue that his workers are among the highest paid in the industry and almost 90 percent have full benefits. There's also a salary cap on executives, so Mackey, who's worth at least $30 million, made $430,000 last year. And Mackey insists his company is more socially responsible than most. Whole Foods donates 5 percent of profits to local charities and recently made the largest purchase by a fortune 500 company of wind energy credits to offset the power in its stores.

Mackey acknowledges he's also committed to making a profit and delivering for stockholders but he doesn't see a contradiction.

"Not at all," he says. "The more profit we make, the more stores we can open, the more donations we can make to our community, the more responsible citizens we can be for the environment. It's all interactive. It's all connected together. There's no separation."

Asked what he would say to someone who assumes that, in the end, Mackey is only about the bottom line and making a buck, Mackey says, "I say that he's talking more about himself than he is about me. How does he know who I am? He's wrong. That's not what I'm all about."

What Mackey's all about has its roots in a conventional upbringing in Houston. But he was out to do things his own way from an early age. When his coach cut him from his high school basketball team, he persuaded his parents to send him to another school so he could play.

"They actually moved. We had to move to another place, in order for me to play," he says. "I will say that after basketball season was over, they moved back," he adds, laughing.

After he dropped out of college against his parents wishes, he and his then-girlfriend opened a health food store in Austin called "Safer Way." Determined to merge with a competitor, he soon showed what kind of businessman he could be.

"I'm told that you said to that competitor, 'Either you arrange to join forces with us, or we'll drive you out of business.' True or untrue?" Rather asks.

"Partially true," Mackey admits. "Well, because it's only half true. They were a competitor but they were friends of mine. So I didn't go up there and threaten them and say, 'Join with us. We're gonna drive you out of business.' I went up there and said, 'We gonna open a 10,000-square-foot store about a mile from here. Wouldn't it be a lot more fun to join forces together? Rather than compete? When our store's gonna be four times bigger than yours?' And they saw the logic of that argument."

Mackey admits he has a lot of drive and is a fierce competitor.

And so in 1980, Whole Foods was born. Over 25 years, he gradually expanded the business by acquiring smaller health food stores and tapping into a burgeoning movement that advocated food grown organically on small, local farms without chemicals or pesticides polluting the environment. Some think all that virtue can come at a steep price — the store's earned the nickname "whole paycheck."

But not everything is expensive. There's a substantial selection of competitively priced food. You still pay the usual premium for organic, which Mackey argues costs more to grow.

What does Mackey say to someone who argues that poor people can't afford this food?

"To me, you make a tradeoff," he says. "It might be a little bit more expensive. But you're getting a better tasting, higher quality food that's going to be better for your health and better for the environment."

That kind of marketing has attracted an almost cult following of millions of urban professionals and suburbanites. Now, with 184 stores across the country and soon expanding to Europe, Mackey has had to change the way he does business.