Inside the Amazon Acquisition of Whole Foods
Chad Fred Lott is a former copywriter for Whole Foods Market and a long-time friend with Vance Crowe. The two met when Vance was working at Monsanto. In this conversation, Chad talks about why it made sense that Amazon would buy Whole Foods. Listen to the full episode here.
CFL: I don’t think I would have rocked it like that if I was in charge of Monsanto, I would have just changed the name like Blackwater did a bunch of times. From what you said it seems like it was a lot more innovative than we thought and I think from the outside whole foods was a lot more conservative on the inside than I think people would have thought. The amazon thing made perfect sense to me when it went down.
VC: Really — not a surprise to you?
CFL: I respect the move in a weird sort of way because John Mackey, I’ve met him a few times, and I got to interview him — he’s a real deal genius but a troubled genius you know, he’s a weird dude like all super Ayn Rand fans are. For a long time there were all these conventional grocery stores that were just always nipping around at the edges always trying to buy and then there was that activist group — The Jaina Investors Group — and they were made up of a type person who I find deplorable which is somebody who’s already made all their money doing evil and they become vegan late in life and it changes their whole outlook on everything. Then they think they can do it better than other people, so they were launching this activist takeover. They wanted to force a sale to Kroger and then I think John Mackey’s perspective was that he has been in opposition to those people his entire life.
The conventional groceries chains stood in his way the whole time and then when it flipped over and how you can get organic everything at Target now, I could just see him selling to Amazon, talking to Bezos saying we’re going to destroy everything that conventional groceries ever stood for.
It’s interesting, especially since when they bought whole foods, their stock price jumped up about the same amount that they paid for Whole Foods, so they pretty much got Whole Foods for free.
VC: I don’t know if I ever had told you this, but I was doing a project internally at Monsanto with my buddy Rob Long and we were asked how we would disrupt Monsanto. This is a super innovative place, so they would play these games so rob and I were invited to go up against a room of tech people and we had to present our idea ahead of time. First we said we think Google might try and kind of vertically integrate part of food and I won’t go into our details of our crazy plan, but then a couple days later we were like no, we think it actually would be Amazon. We laid out this plan and the night before we were supposed to do the exercise the leaders said they thought it was too unrealistic. They didn’t think that Amazon would do that. We had gone so far as to say — imagine that Amazon vertically integrates like the same way that Costco vertically integrates their chicken, where they have their own growers. They send them the chicks, they raise them to specification and then bang — the Costco chicken shows up — we were like imagine if Amazon did that, but for everything. They said we don’t think that’ll ever happen and then they let us do it as a game and we totally destroyed everyone because nobody could come up with a way to stop it.
CFL: That’s what it’s going to be. I know people who are bartenders who are looking for jobs at Whole Foods or who used to work at Whole Foods then went to tech, lost their jobs and are now going back to Whole Foods. It’s a big, weirdly stable industry groceries, people have to eat.
Let’s keep the conversation going,
Vance
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