Yes, you read that headline correctly – Whole Foods Market and Amazon just announced they are in the midst of a definitive merger agreement where Amazon is poised to acquire Whole Foods Market for $42 per share in an all-cash transaction valued at approximately $13.7 billion.
Amazon has been pushing into the grocery and produce space for a while now and news of this pending deal certainly solidifies their move into the world of food.
So what exactly does this mean? Well, to cover the bases, Whole Foods Market will continue to operate stores under the Whole Foods, and the merger is expected to go through in the second half of this year, according to a joint statement from the companies. Additionally, John Mackey will remain onboard as CEO of Whole Foods. The completion of the merger is not set in stone, as it is subject to approval by Whole Foods Market’s shareholders, regulatory approvals, and other customary closing conditions – but if all goes well, they expect the transaction to be complete by the second half of 2017.
Now, this is pretty massive news for the organic and vegan food sectors as Whole Foods has been at the forefront of both of these movements, offering an enormous array of products in each category. Unfortunately, due to the high cost of these products and the “price scandal” of 2015 that revealed the inflated prices of pre-packaged goods at the retailer, Whole Foods Market has been suffering overall with their consumers. This does not mean that the demand for organic and free-from products has decreased, however, in fact,
the global organic food and beverage market is expected to reach $320.5 billion by 2025, while plant-based dairy is poised to surpass $16.3 billion by 2018, and the plant-based meat market is set to reach $5.2 billion by 2020 and could make up one-third of the market by 2050.
So obviously, there is a huge demand brewing for the products that Whole Foods Market has become known for stocking – but the issue of accessibility is a clear hindrance to many consumers. With this in mind, teaming up with Amazon might just be one of the most ingenious moves either company could have ever made.
Amazon currently has 65 million Prime members worldwide, and according to a recent report, Prime members make up over half of the e-commerce giant’s customers. If the acquisition of Whole Foods goes through, this means that 65 million plus users will now have access to fresh healthy foods via an online retailer, which spells untold access to good food for people who live in food deserts or miles away from a supermarket that shelves more than cheap, processed options.
To be honest – when we heard the news about this merger, the first thing that popped into mind is the fact that Amazon is also looking into drone technology to make Prime Air deliveries in under 30 minutes.
As our co-founder Nil Zacharias put it:
But actually – what better way to transport fresh produce anywhere in the U.S. than a quick drone service!?
Nil recently interviewed Whole Food’s CEO John Mackey in an episode of #EatForThePlanet with Nil Zacharias, which is set to air in coming weeks, and it was very clear that Mackey’s ultimate goal with Whole Foods is to make healthy, plant-based, whole foods available to people who wouldn’t have it otherwise. With Amazon’s technology and Whole Foods’ mission, the future of food is looking pretty great.
We’ll keep you up to date with all the details of the merger as we have them – but in the meantime, here’s to a future where healthy, plant-based foods are available everywhere with the help of drones!
Image source: Amazon Prime Air