Whole Foods gets serious about partying

Discussion
Photo: Packed Party/Instagram
Aug 08, 2019
Matthew Stern

Whole Foods shoppers preparing to party will soon be able to pick up not just food, but everything else they need at the Amazon-owned grocer.

The natural and organic foods chain is partnering with a party supplies startup called Packed Party to build out a full section of the type of product one would find at a picnic, cookout or birthday celebration, according to Fast Company. The six-year-old startup’s offerings, which includes cupcake kits, banners and drinkware, have a distinct branded look and feel. The products they offer at Whole Foods will all be recyclable. 

Packed Party is a direct-to-consumer brand founded in Austin, TX. The brand’s website shows an array of products that are both more distinctive and more pricey than analogous items at other party supplies store. A stack of designed-out cups from Packed Party, for instance, runs $16, while a 50-count stack of the plain red plastic cups so familiar to party goers runs $5.99 on the Party City website. Other premium products include a $38 confetti bucket bag.

The price point on Whole Foods’ new party products won’t be out of kilter with its other offerings, though. Despite attempts by Amazon to reduce the perception of high prices that has dogged Whole Foods for years, the chain remains the most expensive grocer in the U.S. as of this year, according to a Merrill Lynch study. 

The Packed Party relationship could put Whole Foods in direct competition with established specialty chains like Party City and with general retailers that sell similar product lines such as Target. It could also compete with the Amazon mothership itself, given that Amazon’s private label AmazonBasics line contains products like plastic utensils. 

Party City, for its part, appears to be thriving, despite the announcement of the impending closure of 45 stores this year, a bump up from the usual 10 to 15.  Many experts received the announcement as a positive for the chain, an indication that management is focusing on maintaining profitability. Analysts say that acquisitions from throughout the space since 2007 have led to over-storing for the Party City brand. 

Editor’s correction: Packed Party clarified that the disposable cups that will be available in the Whole Foods x Packed Party exclusive collection will retail at $4.95, not at $16 like the ones for general sale on the Packed Party website.

DISCUSSION QUESTIONS: How likely is Whole Foods’ affiliation with Packed Party be a success for both parties? What steps might Amazon be planning to leverage the Whole Foods and Packed Party relationship relative to its Prime members?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Nothing quite as tone deaf as selling plastic party supplies at a health food store."
"This will drive little traffic, add little to the bottom line, and just defer addressing the real issues for even longer."
"This collaboration makes sense, as Whole Foods and Packed Party align with premium, sustainable products — and food and socializing are a perfect pairing."

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13 Comments on "Whole Foods gets serious about partying"


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Paula Rosenblum
BrainTrust

This is really wrong. Amazon is simply destroying the Whole Foods brand. Nothing quite as tone deaf as selling plastic party supplies at a health food store.

Everything is not about price. There’s an ethos about Whole Foods that Amazon is really tossing in the circular file. Getting a home delivery from Whole Foods, now that its arrangement with Instacart has come to an end, means getting piles of packaging to keep things cold. Non-recyclable packaging. I ordered once and never will again.

Now they’re going to sell high-end plastic party supplies? Dudes — what are you thinking?

Bob Andersen
Guest

“The products they offer at Whole Foods will all be recyclable.”

LAURA RAMIREZ
Guest

Save for the fact that the U.S. is and has been experiencing a recycling crisis even prior to China deciding to no longer accept our cardboard and plastic. While there are promising technologies being created, whether they can scale and how quickly has yet to be determined.

Now if the move had been to utilize compostable party supplies, it would have at least been in line with the original ethos of Whole Foods and well, better for the environment. So, double fail!

Brad Johnson
Guest
4 months 4 days ago

Aside from the fact that the article states all items are recyclable, I think you’re missing the bigger picture. Amazon doesn’t care so much about the Whole Foods brand image. This was just a way for them to immediately get their “foot in the door” of physical grocery/retail. Everyone already knows that the Whole Foods model was not sustainable … that’s why it sold out. Expect Amazon to acquire another chain in the near future (2-3 years) to solidify its foothold in this sector.

Cathy Hotka
BrainTrust

I’m with Paula on this one. Amazon really should have studied what made Whole Foods unique. When you’re charging more than the competition, brand ethos is everything.

Neil Saunders
BrainTrust

I very much doubt that this move will put Whole Foods in competition with Party City or Target. The demographic overlap, especially with Party City, is fairly minimal. I also think many people will be deterred by the higher prices at Whole Foods and Packed Party. However, this is still an interesting move as it might be of interest to Whole Foods’ core audience, especially for occasions such as picnics.

I am surprised, however, that Amazon has not used its own offer to create a party proposition that it can promote in Whole Foods. Target’s development of its Spritz label has been a success for the firm and has helped it to boost share in the party and occasions market.

Ken Lonyai
BrainTrust

Subterfuge. Whole Foods has a lot of problems, most of which existed prior to Amazon’s acquisition, yet Amazon has failed to resolve them. Order To Shelf is a big one and their SKU for SKU excessive pricing (compared to competitors) is another. Instead of fixing core problems, they seem to think this will distract shoppers from seeing the Whole Foods Emperor as it really is. It won’t. This will drive little traffic, add little to the bottom line, and just defer addressing the real issues for even longer.

Evan Snively
BrainTrust

Very interesting move. Convenience is king, and if offering upscale party supplies in-store helps customers avoid another stop on their journey, people (especially Whole Foods shoppers) will be willing to pay a premium.

Packed Party goods are especially aesthetically pleasing and “Instagrammable.” I’m sure Amazon saw a trend arise on its e-commerce site around this type of party accessories, so I am prone to think it will be a little more successful than some others might believe. Whether it truly makes sense with the existing (or at least the old) Whole Foods brand image is another debate.

Ken Wyker
Guest

What are the chances that this partnership would have happened if Packed Party was not based in Austin, where Whole Foods is headquartered? This sounds like an idea that couldn’t be killed, not an idea borne out of strategic planning.

Michael Terpkosh
BrainTrust

I echo Paula Rosenblum’s comments. I don’t understand why Whole Foods is getting into this business. A build out to a full section? Party City should not be concerned, or Target or Walmart. Whole Foods stores are already bursting at the seams since the stores are typically smaller. There is just not enough shelf space for all the new, innovative natural/organic items entering the market. Whole Foods should be more concerned about staying on trend with natural/organic innovation. I too am becoming unhappy with Whole Foods. My main issue is I am seeing more “conventional items” (Whole Foods term) creeping into their item mix, meaning you need to really pay attention when shopping or you end up paying a premium for a mainstream item. Makes you wonder if Whole Foods is drifting away from from the strategic path that made it successful.

Craig Sundstrom
Guest

The rather impassioned responses here tell me — or rather reiterate for me — that perception is all important. Recyclable or not, many will see only “plastic” while “$16” for a stack of cups will convince many that the “Whole Paycheck” reputation is being upheld. As for its success, whether “yes” or “no” the impact will be small.

Lisa Goller
BrainTrust

This collaboration makes sense, as Whole Foods and Packed Party align with premium, sustainable products — and food and socializing are a perfect pairing. Packed Party’s assortment has a young, fun, celebratory feel (glitter and whimsy galore), which will appeal to younger adults who seek novel, upscale options rather than generic dollar store party merchandise when they host a party.

Brian Cluster
BrainTrust

All of us are veterans in the retail industry and have hunches on the success of this move by Wholes.

I’m going to take a different approach and think about it from a trip segment, party trips inclusive of birthdays, anniversaries, and other seasonal celebrations. It’s not only about the party supply category.

What is the size of these trips? I’m thinking that most of these trips are over $300, likely larger than many of whole foods regular trips.

Who are they battling on these trips? Costco, Walmart, Target, Kroger.

Increasing the party supplies section just another way of securing the “party” trip for Whole Foods and if they can add more premium party trips and prevent any additional trip leakage, then they may be successful.

The party category appears to be lucrative as you may have seen that CTC purchased the Party City business in Canada.

wpDiscuz
Braintrust
"Nothing quite as tone deaf as selling plastic party supplies at a health food store."
"This will drive little traffic, add little to the bottom line, and just defer addressing the real issues for even longer."
"This collaboration makes sense, as Whole Foods and Packed Party align with premium, sustainable products — and food and socializing are a perfect pairing."

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