Jeff Bezos has spread his wings everywhere. From Print media to Robotics, space, E-commerce, speakers, etc., and now, he wants to be the Grocery leader too. Hence Amazon bought Whole Foods in 2017, and Jeff Bezos owns Amazon.
Jeff Bezos owns Whole Foods Market because his company Amazon has brought Whole Foods under its wings in a whopping $13 billion deal. Whole Foods is Amazon’s biggest acquisition in terms of revenue. Amazon wants to gain momentum in the grocery industry, but they know that it’s competitive and hard to break in, and a deal with Whole Foods gives them a huge customer base and presence in the Grocery market.
Why did Amazon acquire Whole Foods?
The Amazon-Whole Foods deal was big news in the grocery industry. The share price of Grocery chains like Walmart, Target, Kroger, etc., plummeted when Amazon acquired Whole Foods.
Amazon has been in the grocery market with Amazon Fresh, but they are still not a big player. Walmart, Costco, Target, Kroger hold a significant stake when it comes to grocery, and for Amazon Fresh, it’s going to be tough to compete against these companies whereas, Whole Foods is already an established player with 500 locations in the US and stores in Canada and UK.
Whole Foods focuses on selling organic and natural foods, and because of its high quality and standard, its products are expensive. Whole Foods was suffering losses because now people can purchase organic food at lower prices in other grocery stores. The Acquisition by Amazon is a winning deal for both companies. Amazon can establish itself in the Grocery market, and Whole Foods can survive the competition.
Did Whole Foods benefit from Amazon’s acquisition?
Whole Foods was in dire need of finances, and Amazon gave a hand to the sinking Whole Foods ship. Whole Foods was a public traded company before Amazon bought it and its share price increased by 36% after the acquisition. Now, Whole Foods is a privately owned company, while its co-founder John Mackey is the CEO.
Whole Foods has benefited from the Amazon deal but so does Amazon.
- Whole Foods was not known for offering discounts, but after Amazon’s acquisition, Prime members can avail themselves of discounts up to 20% at Whole Foods.
- Whole Foods had a deal with Instacart for grocery deliveries, but now with Amazon Fresh, Grocery deliveries are going to be faster like your Amazon orders.
- Whole Foods now sells its groceries on Amazon fresh too. Amazon Fresh provides good exposure to Whole Foods over several platforms for grocery.
- Whole Foods’ revenue is growing steadily after the Amazon acquisition.
Whole Foods garnered attention, finances, and profits after the Amazon deal. Now, Jeff Bezos might soon capture a fair share in the Grocery industry with Whole Foods, Amazon Fresh, and fast deliveries.
Amazon’s footprint in the Grocery market
Amazon was looking for an opportunity to enter the Grocery market, and Amazon Fresh was not enough to give them a large footprint. The Grocery market has been stagnant and needs innovation, and Amazon wants to do that for the Grocery industry.
Currently, there are 23 Amazon Fresh physical stores in the US. They are small, easy to open, operate, and affordable, but it lacks a significant loyal customer base that Whole Foods can provide. Amazon wants to expand itself with fast deliveries and innovative products and become an indestructible E-commerce giant.
50% of Whole Foods customers are Amazon Prime members, and they are likely to visit Whole Foods more, and the customers without Prime membership might want to become Prime members for Whole Foods discount. Overall, Amazon wants exposure, and Whole Foods needs revenue, and in the coming years, Amazon’s footprint in the grocery market looks brighter.
What else does Jeff Bezos own?
Jeff Bezos is almost in every industry. He has acquired a few businesses and invested in many. Some of his major companies except Amazon include:
- Audible and Good reads for book lovers and we already how Kindle transformed the way books were read.
- Blue Origin to make rocket launches cheaper and space travel a casual trip.
- Amazon Robotics could change the way E-commerce functions
- Alexa that has transformed our homes
Many others include Twitch, Washington Post, Zappos, IMDB, etc. He is also a major investor in Airbnb, Twitter, Google, Uber, Mark43, and the list is exhausting. Hence he is the 2nd richest man on the earth, and his billions are ever-growing.
To Conclude
Jeff Bezos owns Whole Foods through Amazon and many other businesses in many countries, but he wants more. The grocery industry needs innovation, and Amazon wants to be the innovation leader. The $13 billion deal has forced other grocery industries to speed up and find the competition is getting cut-throat within the Grocery market.
Frequently asked questions
1. Who was Whole Foods owner before Amazon?
A. John Mackey was the CEO and owner of Whole Food before Amazon and John Mackey is still its CEO.
2. What changed for Whole Foods after the Amazon acquisition?
A. Whole Foods is now a subsidiary of Amazon. The company now offers discounts for Prime members and delivers through Amazon Fresh.
3. What is Whole Foods market worth?
A. As of 2021, Whole Foods is worth $16 billion and Amazon bought it for $13 billion.
