For one area small business owner, Friday morning’s news about the acquisition of Austin-based Whole Foods Market by e-commerce giant Amazon means more innovation and efficiency.
“It’s a marriage of super athletes,” said Round Rock Honey owner Konrad Bouffard, who until a few years ago stocked his local honey products on the shelves of Whole Foods Market.
In a warehouse and production facility just west of I-35 and north of Hwy. 79, Round Rock Honey draws from hives mostly between Austin and Dallas, with some near Houston.
Bouffard said Whole Foods Market was the first grocery store to stock his products back in the early 2000s, and he’s grateful for that.
But inefficiencies in the organic and natural foods supermarket’s distribution and buying system led him to pull his products off the company’s shelves in 2013.
Each geographic division of Whole Foods market has its own office and regional president and oversees its own store network, meaning it’s hard for small business owners to efficiently distribute their products to Whole Foods Market stores across multiple regions.
“We would get to stores and the stocking monitor had as much control as the store manager over every minutia, every detail,” Bouffard said. “There was no top-down command.”
But the announcement of Amazon’s acquisition has Bouffard’s hopes up.
“You have a company that is taking over another very good company and revitalizing it, demanding that they rethink everything that they do with the consumer in mind and with efficiency in mind,” he said.
Bouffard said Whole Foods Market gets calls every day for his Round Rock Honey products.
“They have made multiple overtures to get us back on the shelf,” he said. “Every single time, the no. 1 thing that has gotten in the way is the distribution system.”
He said he is looking forward to putting his products back on the company’s shelves if Amazon delivers what he calls an “amazingly efficient” distribution system.
“It kind of reminds me of a royal wedding,” Bouffard said of the Whole Foods Market/Amazon merger. “It’s as if you were trying to create the perfect car [by] combining a Ferrari and a Lamborghini.”
Founded in Austin in 1980, Whole Foods Market expanded throughout Texas four years after its launch, acquiring and merging with companies along the way.
Fast forward to May of this year, when the Whole Foods Market board of directors was shaken up as part of a “robust refreshment process,” according to a company press release.
Five new directors were appointed, along with a new board chair and nominating and governance committee chair.
“You have a company that is taking over another very good company and revitalizing it, demanding that they rethink everything that they do with the consumer in mind and with efficiency in mind.”
—Konrad Bouffard, owner of Round Rock Honey
In May, the company’s founder John Mackey outlined initiatives for continuing growth.
“We are on a path to return to positive comparable store sales and earnings growth next year,” he said in a release. Initiatives included reaching more than $18 billion in sales and $300 in cost savings by fiscal year 2020. The company reported a recorded $3.7 billion in sales in the second quarter of 2017.
For Amazon—a company worth $427 billion, according to Forbes—the deal is in line with recent dives into brick-and-mortar retail.
The company opened eight Amazon bookstores and has five more in the works—three in California, one in New York and one in Washington.
In early 2017, the company also opened a new checkout-free Amazon Go store in Seattle where cashiers are nonexistent; instead, customers turn on the Amazon Go app and select a product from the shelf, which the app records as a purchase.
In a news release announcing the acquisition of Whole Foods Market, Amazon CEO Jeff Bezos said he wanted to continue offering customers the natural and organic foods that Whole Foods Market currently sells.
“Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades,” he said. “They’re doing an amazing job, and we want that to continue.”
Austin business owner Ashley Cheng said Whole Foods Market’s commitment to local businesses needs to remain a priority.
The co-owner of SPUN Ice Cream recently opened a new location inside a shipping container on Whole Foods Market property at Domain Northside. So far, the partnership with the company has been a good one, she said.
“I think Whole Foods has done an impressive job supporting local businesses and being strong stewards of community,” she said in an email. “Ultimately, it’s up to us as consumers to keep buying local brands, whether that be on store shelves or online, to keep the jobs, growth and dreams alive in our communities.”
Whole Foods Market also helped launch organic brands such as Dripping Springs-area business NurturMe, which sells food and snacks for babies and toddlers, according to NurturMe co-founder and CEO Caroline Freedman.
“We’re excited to see the next chapter unfold as these two innovative and forward-thinking companies come together,” she said of Amazon and Whole Foods Market.
“Amazon has the infrastructure to provide Whole Foods Market’s premium items at a lower price to customers, so [Whole Foods Market] can aggressively compete with the growing organic and natural markets at the larger grocery and big box chains,” said NurturMe co-founder and COO Lauren de la Rosa.
Amazon has not released details on what it plans to do with the Whole Foods Market brand.