It is rumoured that Amazon had their eyes on American supermarket chain Whole Foods before Jana Partners acquired a stake this week.

Jana Partners is “A value-oriented, event-driven manager that invests, long and short, in companies undergoing or expected to undergo change.”

Even though Jana’s Whole Foods acquisition led to a 10% increase in stocks for Whole Foods, Jana (now with nearly 9% of the shares in Whole Foods) is urging internal changes in the company to ready it for a possible sale.

Apparently, the list of possible buyers included Amazon, Kroger and Albertsons.

Amazon Fresh – Amazon’s grocery delivery service

So what would it mean if Amazon ended up acquiring Whole Foods?

  • It would be unorthodox for one, being an online retailer buying a bricks and mortar retailer. But it would make sense, because both players have similar progressive customer groups – not your Wal-Mart value customer.
  • Organic groceries are the fastest growing food category, with 15% year on year. Needless to say the popularity of organic foods isn’t going away anytime soon.
  • Amazon’s current revenue in grocery sales is approximately $10.6b USD, that’s a market share of 1,2%. Whole Foods’ 2016 revenue was $15.72b USD. Combining the two would result in revenue of $26,32b USD. This means Amazon would DOUBLE.ITS.VALUE increasing their market share to 3%!!

Even if they’re not successful in or end up acquiring Whole Foods, it’s clear that Amazon will be looking elsewhere to further invest in and expand their food offering.

Amazon Fresh is growing and it’s coming to Australia, and so the question remains:

Who will they be eyeing here?

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