What Amazon’s purchase of Whole Foods means for distribution

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Amazon’s acquisition of Whole Foods for $13.4 billion in cash will soon change many of our habits and customs, as well as how the vitally important distribution industry. This is not just another acquisition or an extension of the Jeff Bezos empire: there is much more at stake here.

Whole Foods is more than just a supermarket chain: it’s a different way of doing things. It was set up in 1980 with a clear mission to become a supplier of healthy foods, and despite some problems, has remained loyal to its founding aims. It’s one of those supermarkets where shopping is as pleasant an experience as it can be: the products are beautifully presented, they look fantastic, the staff speaks and advises you, everything is sourced organically and locally, and is sustainable … it takes the concept of the supermarket to another level.. Even its 365 initiative, aimed at lower costs, intensive use of technology, customers who take products directly from the cargo pallets and connect with younger consumers, is well-thought-out and has the same commitment to healthy products, becoming something of a hipster haven. Granted, it makes no money and its shareholders were beginning to express concern about its profitability, but we are talking about a Fortune 500 company with 431 supermarkets in the United States, Canada and the United Kingdom, and with 91,000 employees.

For Jeff Bezos, buying Whole Foods is not simply about owning a supermarket chain. We are talking about the biggest acquisition in Amazon’s history. He has bought a philosophy, a way of doing the things he clearly likes, a way to preserve an identity by providing double security: on the one hand, the resources that are needed to propel its growth, and on the other, the efficiency needed to become profitable… or not, although nobody cares. The company whose shares have increased in value by more than 57,000% since it went public on May 23, 1997, has done so despite the “small detail” of not issuing dividends for most of its history: its shareholders know that they will not receive dividends, but they have the absolute confidence that their shares will revalue because of the company’s commitment to growth, continuous exploration, ambition … quarterly results are the least of their concerns, and the share value shows it. Jeff Bezos is still executing the strategy he planned in 1997 when he was just an online bookstore: now he sells everything, and Amazon is a huge company that is considering flying warehouses from where drones bring down our deliveries… on the basis of anticipatory shipping. Airports costing $1.5 billion, supermarkets without checkout tills, automated warehouses… a company that has filled out homes with buttons and intelligent assistants with infinite skills, and has changed our brand loyalty, exhausting our capacity to be surprised.

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When Jeff Bezos decided to personally invest in The Washington Post, he did so because he liked the newspaper, its way of doing journalism, and wanted to ensure its viability by making the necessary changes to it. It’s a similar story with Whole Foods: Bezos likes its philosophy, and wants to be sure it can function sustainably, in addition to becoming an expansion in the physical world that allows him to explore a whole new dimension. The purchase is a wakeup call for the North American market, and will already have the distribution market calculating the implications and in a cold sweat. The acquisition offers Amazon a platform on which to implement its innovative approaches, which until now have been on a reduced scale: but nobody believed Bezos was all talk and no action.

Following the announcement of the purchase of Whole Foods, Amazon shares have risen enough to make the operation essentially free, possibly earning $1.9 billion dollars. Bezos’ vision has succeeded in building one of the most valuable and ambitious companies in the world, and is being fulfilled with respect to his predictions of 1997, with the precision of a Swiss watch. Distribution companies have known for a long time who was setting the pace in the sector: a company born online and focused online, but that now owns a an ever-larger portion of the real world. No one in distribution has the slightest chance of competing against Amazon. Amazon is going to sell everything, and will redefine the way we buy in the way that we find most interesting: if you don’t use Amazon for more and more purchases, it’s either because the company doesn’t deliver where you live or because you haven’t tried. The future is Jeff Bezos. The future belongs to those who know how to invent it.

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