Most of us in the health and wellness industry found ourselves scratching our heads after learning that the giant e-retailer Amazon swooped in to purchase the natural foods Goliath Whole Foods Market for a whopping $13.7 BILLON. Or in more-easy-to-understand-terms, roughly $42 a share — a healthy 27% premium on the previous day’s closing price. However, after rumblings from the media claiming that Amazon was considering an automated, two-story supermarket using robots on the top level to collect and bag items for shoppers downstairs coupled with the rumblings of a total refreshing of the Whole Food’s Board of Directors and plans to better operations and cut costs in many divisions of the business, many had an inclination to believe “something was up.”
What’s In It for Amazon?
Even though the Amazon-Whole Foods Market acquisition announcement is still in its infancy; there are many possible ways this can go.
For instance, acquiring Whole Foods’ premium located 440 US stores could significantly strengthen the network for AmazonFresh – Amazon’s grocery delivery service whose beginnings have gone a bit slower than anticipated.
However, for Amazon the move signifies a doubling-down on their interest into the grocery space. Jeff Bezos, Amazon founder and CEO stated, “Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy. Whole Foods Market has been satisfying, delighting, and nourishing customers for nearly four decades—they’re doing an amazing job, and we want that to continue.”
Lately Amazon has been experimenting with establishing a few test brick-and-mortar outlets across the country. Amazon has tested ideas such as cashier-less registers as well as in-store ordering with delivery.
What’s In It for Whole Foods Market?
According to John Mackey, co-founder and CEO of Whole Foods Market, “”This partnership presents an opportunity to maximize value for Whole Foods Market’s shareholders, while at the same time extending our mission and bringing the highest quality, experience, convenience, and innovation to our customers.”
The company also promised their patrons that Whole Foods commitment to health will remain the same with the new merger. In an email to their subscribers, Whole Foods wrote: “Amazon shares Whole Foods Market’s deep commitment to quality and customer service. We will continue to operate our stores and deliver the highest quality, delicious natural and organic products that you’ve come to love and trust from Whole Foods Market.”
Whole Foods Market has also reminded the public and their patrons: “No artificial flavors, colors, preservatives, sweeteners or hydrogenated fats will ever be in any of the food we sell. Meat will still come from animals raised with no-added growth hormones, ever. And all eggs in our dairy cases will continue to come from cage-free hens that aren’t given antibiotics. Those standards are core to Whole Foods Market and we will remain committed to them.”
For now, Whole Foods Market and Amazon customers should not expect huge changes. The deal is not scheduled to close until later in 2017. However, Amazon went to lengths to express that Whole Foods would remain its own entity, with CEO John Mackey still at the wheel and its headquarters staying in Austin, Texas where the grocery retailer started in 1978. Amazon also indicated they have no intentions to add its no-checkout, no-cashier technology into Whole Foods.
Thoughts from a “Seasoned” Whole Foods Market Customer
After a stage three colon cancer diagnosis in 2000 as well as the decision in January of 2001 to go the alternative medicine route for treatment, the Whole Foods Market in Bellaire TX became my weekly go-to for organic “whole foods”. In fact, shopping at Whole Foods Market became a weekly stress-reliever in my life. Yes, that’s what I said – grocery shopping can be a stress reliever.
Of course, it definitely wasn’t easy on the wallet. Interestingly my family and I could immediately tell a big difference in how our adopted “real foods” diet tasted. Everything was tasty and delicious and nothing had the often bland taste of grocery store produce and meat. Even our teen daughter noticed the difference in the taste of organic chicken. This pleasant surprise provided one more reason to justify our $200/week average grocery cost (basically two grocery bags) for a family of three.
I looked forward to my weekly trek to Whole Foods. I mention this only because grocery shopping has never been high on my list of things I enjoy. From the first step into the store, “our” Whole Foods Market had a distinct calming effect. The gorgeous arrangement of colorful, living vegetable and fruits constantly reminded me of wellness. The fact that Whole Foods had an in-store restaurant which cooked with food and produce from the store, was even more appealing. Often I would eat a colorful salad with some steamed veggies and then do our food shopping for the week. The feeling of calm in the store was an added bonus.
I hope Amazon will keep its overall promise to ensure Whole Food’s commitment to good health is kept. This commitment to good health by providing non-toxic and organic food is important to all long-time Whole Food’s patrons.
Whole Foods Market has spent decades persuading customers its grocery items are worth higher prices, earning itself its “Whole Paycheck” status. And they have definitely felt the competition. For example, in 2016 the U.S. organic segment surpassed sales records, including $43 billion in organic food sales, according to the Organic Trade Association. However, Whole Foods sales dropped 5.4 percent. My secret hope (okay, no longer a secret) is that, under Amazon’s management, prices will make their way down for those beautiful veggies and fruits. If they can lower food prices, offer grocery pick-up and front door delivery as part of their already great “shopping experience”, Amazon may actually be changing the way America shops for food as well as the way America eats. How refreshing is that!!
I’ll be watching…