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A Google-owned Whole Foods? CEO John Mackey says he was open to such a deal

October 18, 2017
Consumer Packaged Goods

Whole Foods CEO John Mackey describes his company’s courtship with Amazon as “love at first sight,” but that didn’t stop him from casting a wandering eye at another potential suitor.

“Google is an amazing company, as well. We had (a Google) executive on the Whole Foods board. And I remember when Amazon and Whole Foods were sort of courting each other and falling in love, I talked to that executive and said, ‘It’s not too late for Google to get in on this game,’” said Mackey, eliciting some laughter from the crowd Tuesday at a forum at the annual Chicago Ideas Week.

Google wasn’t interested, Mackey said. And the rest, of course, is history. In late August, Amazon closed on its $13.7 billion acquisition of Whole Foods Market, a deal that’s shaken up the historically staid grocery industry. Amazon kept Mackey on board as CEO to continue running the company from its Austin, Texas, headquarters.

In a half-hour interview with Brad Keywell, founder and co-chairman of Chicago Ideas, Mackey recounted some stories leading up to the deal, interspersed with biographical tidbits and philosophical musings in promotion of his book, “Conscious Capitalism,” co-authored with Raj Sisodia.

Mackey spoke in glowing terms about Amazon CEO Jeff Bezos, calling him “a brilliant guy” and said a consultant connected Whole Foods with Jay Carney, a former press secretary for President Barack Obama turned Amazon executive. That led to a meeting in Seattle between top brass of both companies, he said.

“Those of you who’ve been in love know there’s that conversation that occurs at some point. You might stay up all night and talk all night long. And then there’s this connection. We had that the very first time we met,” Mackey said.

The romance continued and then, on June 15, the companies made their marriage official.

“People want to know how we’re going to change the world, but we’re still on the honeymoon so I’m not going to say,” Mackey said, sticking with his metaphor.

It’s unclear whether Google was ever a serious consideration for merger. Mackey wasn’t available for questions after the event and a Whole Foods spokeswoman declined to comment further.

The lovey-dovey talk came to a halt when Mackey arrived at the topic, at Keywell’s prompting, of activist investors Jana Partners, which pressured Whole Foods to sell the company. Mackey called the financial sector “the sickest part of capitalism.”

On April 26, according to Whole Foods company filings with the Securities and Exchange Commission, senior representatives of Jana Partners met with Whole Foods executives and demanded the company make changes to its board of directors and announce “an exploration of strategic alternatives.”

Mackey described that meeting: “They came in our conference room and made us watch this 30-minute PowerPoint presentation that basically trashed our company and said what a terrible job we were doing.”

Mackey said he questioned selling the company.

“And then I said, ‘OK, what if we don’t?’ And they said, ‘You’ll find out and you’re not going to like it.’ And then they got up and they left,” Mackey said.

When Whole Foods ultimately did sell, Jana cashed out its stake in the retailer for a roughly $300 million profit.

A Jana representative disputed Mackey’s version of events but declined to speak on the record about the meeting.

Such boardroom battles are an awful long way from the first Whole Foods that opened in 1980 with 19 employees. The upscale grocery chain now has more than 460 stores and more than 90,000 employees.

“Most people don’t appreciate it. But when we started out, we honestly were just a bunch of hippies — a bunch of hippies selling food to other hippies,” Mackey said. “And that was the business.”

By Greg Trotter

Source: Chicago Tribune

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