The Amazon Whole Foods deal is worth around $13.7 billion. The move shows the company’s strategy to diversify and increase its investment in the food sector. The move will see Amazon Buy Foods deal giving $42 per share. The stock was last trading on $33 at the close of trading last Thursday.
About Whole Foods Market
The history of the company goes decades back when it opened its doors in 1980. The company started operations from Austin Texas. By the end of 2015, Whole Foods employed more than 90,000 employees with 432 supermarkets across the US, United Kingdom, and Canada. The company has its fresh produce procurement office in Watsonville, California.
Amazon Whole Foods Deal Advantage
The announcement of Amazon Foods deal will make it one of the company’s subsidiaries. The purchase of Whole Foods will also come with the physical presence of Brick and Mortar stores across three different countries.
The Promise of Whole Foods
Whole Buy Foods has set standards for accepting food for its market. The store takes food involving minimal processing without any hydrogenated fats. The store also asks the producers not to add preservatives, sweeteners and, artificial colors. There is a list of “Unacceptable Food Ingredients” that must not become part of the food items.
A Big Strategic Move for Amazon
Amazon always wanted to increase its presence in the food market. However, this is one significant market opportunity that Amazon long wanted to grab. Currently, the company is not as successful it would like to be. Some researchers in 2016 suggested that Amazon only had 12 percent of US grocery shoppers buying food items from it online.
Millennials are particularly the target that the company wants to reach. Many millennials at the age of 25 and above will get married and have kids. Therefore, they will increasingly buy food items online. Therefore, there is a significant growth of more people buying food items online.
No Leadership Change for Now
The current CEO of Whole Foods John Mackey will lead the organization. The CEO thinks that this deal would help the company maximize its shareholder value. Similarly, he believes that the new deal would add more quality to the food items and improve customer convenience. Amazon is not going to change the name of the store. The company will run as a separate business entity. Whole Foods will capitalize on the extensive ecommerce experience of Amazon.