FTC, shareholders approve Amazon/Whole Foods deal…now what?

The Federal Trade Commission and shareholders have approved Seattle-based Amazon’s purchase of Whole Foods Market Inc., and the deal is expected to close next week.

Now what?

Amazon reportedly plans to lower prices on grocery staples in Whole Foods stores, and offer Whole Foods products to Amazon Prime members.

But what about fresh produce?

I talked with a National Public Radio affiliate last week about what I expect to happen from a fresh produce perspective. You can listen to the webcast here.

My bottom line? This is leapfrogging Amazon’s grocery efforts significantly. They’d been stalled out with the Amazon Fresh concept for a while now, but with the purchase of Austin, Texas-based Whole Foods, they’re not just getting 430 potential locations for Amazon Fresh pickup.

They’re getting logistics, distribution and, most importantly, a well-established network of produce buyers. Just look at Lidl. Their produce teams spent YEARS meeting with potential vendors to put together their programs.

This purchase just saved Amazon years of work, building a network and gathering the know-how of all the local, national and international deals that it takes to supply produce nationwide, year-round.

I recall Amazon Fresh’s new buyers coming to The Packer’s West Coast Produce Expo a few years back, when the concept was in its infancy. They had a lot of ground to cover and people to meet. This is a people business and the new kid on the block can have a hard time getting established. (see Tesco, re: Fresh & Easy Neighborhood Market for an example of rapid expansion without the right base.)

I recall a session at United Fresh MKT this summer, where Gen Y shoppers were asked about potentially ordering fresh produce from Amazon. Every single one of them was skeptical at buying fresh food dropped on their doorstep.

Now, how about using your Amazon Prime account to order produce from Whole Foods?

That’s a whole different ballgame.