Remind Me Again Why I Bought Whole Foods?

As the grocer’s co-founder moves on, the rationale for the deal is still hazy

- Joshua Brustein

The day in 2017 that Amazon.com Inc. announced it would buy Whole Foods Market, JeffWilke, then Amazon’s retail czar, tried to reassure a large group of employees gathered in a conference room above the high-end grocer’s flagship store in Austin that their lives wouldn’t be turned upside down by the deal. Then he referred to blueberries as a vegetable.

Executives from Whole Foods pounced. “Those aren’t vegetables,” cut in co-founder John Mackey. “So it begins,” added Walter Robb, Mackey’s former co-chief executive officer, before Mackey offered Wilke an out: “We’re learning,” he said.

The flub pointed to the awkwardness of a $13.7 billion union between a company whose core competencies were e-commerce logistics and cloud computing and a grocery store chain catering to people who wanted to choose from several colors of cauliflower. This isn’t to say there was no logic to it. Amazon was a decade into a largely unsuccessful attempt to sell groceries online, and Whole Foods would add specific expertise, along with a 500-store springboard into physical retail. Mackey saw joining Amazon as a way to shield his company from investors pressing for a shakeup because of disappointing growth. It also offered access to data-driven decision-making and innovation. “We’re gonna see a lotta technology,” Mackey told employees at the time. “I think you’re gonna see Whole Foods Market evolve in leaps and bounds.”