Inside Whole Foods' Socially Conscious, Profitable Business

Feb. 7, 2013— -- If you have never been inside of a Whole Foods or never understood the cult-like devotion of its customers, the first thing that catches your eye is the array of vibrant colors.

If you squint, the produce department resembles an edible Monet -- mountains of juicy red tomatoes, brilliantly green zucchini, bright yellow squash, plump plums, green asparagus stalks, and so on.

This is not by accident. The Whole Foods aesthetic starts long before that perfect stack of rainbow chard appears in the store. It starts out in the dirt, on the farm.

"We are specifically growing this for Whole Foods, you guys were looking for a better color," said Dicky Peixoto, the owner of Lakeside Organic Gardens in Watsonville, Calif., holding out a monstrous head of red leaf lettuce to Bob Flood, a Whole Foods field and quality inspector.

"It's absolutely beautiful," Flood replied. "That's perfect. It's going to look great in our stores."

Whole Foods has a small army of food experts constantly on the hunt for the best quality items. They are kind of like major league baseball scouts, but instead of driving to random ballparks looking for pitchers, they hit farm fields and farmer's markets in search of the crunchiest green pepper or best Peruvian chocolate cashew milk.

Harv Singh is a Whole Foods regional local product "forager." He scours foodie blogs and drives hundreds of miles a week, looking for up-and-coming bagel artisans or socially responsible pie makers who have gone organic.

Executive Whole Body coordinator Jeremiah McElwee is responsible for all aspects of the health and beauty departments, as well as non-food merchandise, at over 300 Whole Food stores in four countries. Whole Food partners will several companies for its health and beauty section, including Alaffia Bodycare, which products include handmade shea butter lotion from Togo, West Africa.

"In the case of Alaffia and so many companies that we partner with, they are actually helping build or create an economy through trade and ultimately that's far more sustainable than dolling out some money," McElwee said. "Creating that sustainability platform of an economy and something that people can grow from is far more important."

Follow these guys around, and it is easy to see that cost is less important than ideals, such as "fair trade," "no preservatives" and "humanely-treated livestock," values that attract the kind of person willing to pay $7.99 a pound for granola.

But while there may be a lot of so-called "liberal elites" reading the labels at Whole Foods, they would have a tough time labeling the man who created Whole Foods, John Mackey.

"I'm an individualist. I'm a non-conformist, which gets people mad at you sometimes because you don't quite live up to their stereotype," Mackey told "Nightline" anchor Bill Weir.

For example, Mackey spent some of his long-haired youth living in a vegetarian co-op, but now calls Obamacare "fascism." Mackey is a health-conscious vegan who has no problem selling pork sausage or genetically-modified foods, even though people debate their safety.

While his stores aim for a low-carbon footprint and sell only sustainable fish, Mackey does not believe in man-made global warming.

"I don't think we necessarily know that has been caused by man or human-caused industrialization or carbon dioxide," he said. "I'm not a climate expert. I'm just a fairly well-read guy who reads both sides of an issue."

Before conservatives start to swoon, know that Mackey takes a $1 per year salary as a statement on income and equality. He is also a staunch animal welfare advocate and equates modern hamburger production with the evils of slavery.

"I think people will look back 100 years from now with horror on livestock animals because people are not conscious of it," Mackey said. "We just want to have cheap meat."

Swearing off meat was a big part of Mackey's rise. He fell in love with fresh produce living in that co-op, borrowed some money and opened a health food store called Safer Way Natural Foods -- a dig at the grocery giant Safeway -- in Austin, Texas.

Thirty-two years and 345 stores later, Whole Foods is still smaller than Safeway, but almost three times as valuable as a company, because having that small army of Bobs and Harvs to source quality over quantity can bring bigger profits.

But it has also driven smaller competitors out of business and earned Whole Foods a snarky nickname from cost-conscious shoppers: "Whole Paycheck." Mackey hates that.

"We've done studies that show you can eat the healthiest diet in the world and not spend more than $4 or $5 a day per person," he said.

All of Whole Foods' employees know exactly what everyone else in the company makes and, as company policy, no one can make more than 19 times the average salary of at least $18 an hour. At other Fortune 500 companies, the CEO makes around 325 times more than that.

When Walter Robb was named Mackey's co-CEO a few years ago, the job didn't come with a lot of financial perks. For one, there was no raise in pay.

But not everyone is on board with the policy. Several years ago, employees at a Whole Foods in Madison, Wis. threatened to unionize. Robb said it was a situation where the company had "let them down."

"We went there and the culture had fallen apart," he said. "The team members lost faith that we meant what we said."

Robb said those employees eventually changed their minds, but the episode was a wakeup call on the road to "Conscious Capitalism," the title of Mackey's new book. In it, he preaches that the best companies are those that treat employees, customers, suppliers and neighbors as equal shareholders.

"Happy team members results in happy customers results in happy investors," Mackey said. "Honestly, the golden rule is the reason why they call it the golden rule, and yeah, businesses should be based on principles like the golden rule."