business news in context, analysis with attitude

Terrific story in the Austin American-Statesman about how Whole Foods has provided more than $2.5 million in low interest loans to more than 50 companies around the country – including Owl Tree Roasting, an Austin-based coffee company – as a way of bolstering local food producers. The retailer plans to hand out at least another $7.5 million in loans ranging from $1,000 to $100,000 before it is done, “a way to help small producers while burnishing its own local credentials,” the paper writes.

The loans allow entrepreneurs to buy equipment of expand their facilities, and Whole Foods provides both favorable rates and generous repayment terms to companies that it deems to be in synch with its own priorities. And there are no exclusivity clauses – in the case of Owl Tree, it now roasts more coffee for other Austin area shops and restaurants than it does for Whole Foods.
KC's View:
I think it is possible that years from now, when Whole Foods management looks back, it will conclude that this is one of the smartest things that the company ever did. These aren’t costs, but investments…and they have the potential of paying off in a variety of ways for a long, long time.