Whole Foods Market and Amazon
Amazon's combination with Whole Foods is expected to be a win-win, but what does it mean for manufacturers?

BALTIMORE — Two-thirds of Whole Foods Market shoppers also shop Amazon, and 21% of Amazon shoppers also shop Whole Foods Market, said Steve Williams, vice-president of strategic consulting for Natural Marketing Institute. Amazon’s recent $13.7 billion acquisition of Whole Foods unlocks opportunities for each business to expand its shopper base.

Steve Williams, Natural Marketing Institute
Steve Williams, vice-president of strategic consulting for Natural Marketing Institute

Whole Foods shoppers and on-line shoppers tend to be younger, more likely to have children, more highly educated and more ethnically diverse, Mr. Williams said during a presentation at Natural Products Expo East, held Sept. 13-16 in Baltimore.

However, survey data reveal several differences, he said. Whole Foods shoppers are more likely to prioritize healthy living than Amazon shoppers. Two-thirds of Whole Foods shoppers are early adopters of new products and services, compared with just over half of Amazon shoppers. Twenty-seven per cent of Whole Foods shoppers are willing to pay 20% more for organic products, compared with 16% of Amazon shoppers.

When the deal was finalized in late August, Whole Foods said it would lower the prices on a selection of best-selling grocery staples, including organic bananas and eggs, salmon and lean ground beef. Store traffic at the natural supermarket chain reportedly surged 25% in the first two days following the sale. Meanwhile, Amazon’s web sales of Whole Foods private label items totaled $500,000 in the first week.

All of this amounts to a win-win for Amazon and Whole Foods, which stand to convert shoppers across the combined business. But what does it mean for manufacturers in the natural products industry?

Carlotta Mast
Carlotta Mast, senior vice-president of content at New Hope Network

“There has been so much discussion about what Amazon’s ownership of Whole Foods Market will mean for our industry,” said Carlotta Mast, senior vice-president of content at New Hope Network, during a presentation at Expo East. “There’s lots of pontification on many sides of this question, and nobody yet quite knows.”

Chris Campbell, co-founder and chief executive officer of Austin, Texas-based Chameleon Cold-Brew, an exhibitor at Expo East, said he is cautiously optimistic about the combination.

Chris Campbell, Chameleon Cold Brew
Chris Campbell, co-founder and c.e.o. of Chameleon Cold-Brew

“Amazon is world-class at logistics, and we hope to see optimization of inventory and other logistical elements that will reduce out of stocks and improve our ability to service the Whole Foods Market consumer,” Mr. Campbell told Food Business News when the deal was announced in June.  “To the extent that they develop go-to-market opportunities that operate across both brick and mortar and digital platforms, we see great opportunity to reach consumers more efficiently.”

As the natural products industry continues its stunning growth trajectory, participants attending Expo East were urged to remain true to core values.

Eric Pierce, New Hope Network
Eric Pierce, director of business insights at New Hope Network
“We continue to remain wildly excited about the growth potential of this industry,” said Eric Pierce, director of business insights at New Hope Network, during a presentation. “…as we push ourselves deeper and deeper into the mainstream population, it’s important that we pursue these opportunities with integrity. It’s important that we remain focused on the values that made us who we are as an industry.”