Published on: September 30, 2021
John Mackey, who co-founded Whole Foods in 1980 and helped to build it into a preeminent purveyor of natural and organic foods, said this afternoon that he will retire from the company, which he sold to Amazon several years ago for $13.7 billion, on September 1, 2022.
In a memo to employees, Mackey said he will be succeeded as CEO of the division by the company's current COO, Jason Buechel. Mackey said that Buechel, who joined Whole Foods in 2013, had been his choice as a successor and that he was "pleased" that Amazon agreed.
Mackey wrote that he would compare his relationship to Whole Foods with how a parent feels about a child. "As a parent, I have always loved Whole Foods with all my heart. I have done my best to instill strong values, a clear sense of higher purpose beyond profits, and a loving culture that allows the company and all our stakeholders to flourish," he wrote. “All parents reach a time when they must let go and trust the values imparted will live on within their children. The time has nearly come for me and for Whole Foods.”
"Words cannot begin to express how deeply grateful I am for your partnership on this incredible journey and how much I love the company and all of you," Mackey also wrote in his memo. "I may be retiring from Whole Foods a year from now, but so long as I am still alive, I will remain connected to Whole Foods and will do all that I possibly can to help us all continue to flourish."
In its coverage, Bloomberg notes that as the company grew - it now has more than 500 stores - it also grew more difficult to manage, "as large mainstream grocers started stocking their own shelves with organic and natural products. Under pressure from an activist investor, Mackey brokered the sale of his company to Amazon for $13.7 billion in 2017. Despite fears among mainstream supermarket chains that the acquisition would help Amazon dominate yet another industry, the company has struggled to crack the code on physical retail."
Mackey famously compared being owned by Amazon to marriage. He once told CNBC, “Do I absolutely love everything about my wife? The answer is that I love about 98%,” he says. “There are little things that I wish were different, but you can’t really change people … Amazon is like a marriage. Do we love absolutely everything about Amazon? No. We probably love 98%.”
- KC's View:
So, if I'm reading the metaphorical evolution correctly, this is less about a marriage breaking up than it is about allowing your child to fly on his/her own?
This probably was just a matter of time. It always seemed unlikely that Mackey was going to last very long once Amazon bought the company and, in fact, he survived in that culture longer than I would've expected.
When you think about it, Mackey has had an amazing run - he co-founded Whole Foods 41 years ago and during that time, before being acquired by Amazon, the company essentially ate all of its competition, including companies like Wellspring Grocery, Bread & Circus, Mrs. Gooch’s, Fresh Fields, Bread of Life, Merchant of Vin, and Harry’s Farmers Market, as well, of course, as Wild Oats.
Of course, I suppose that one could argue that one of the ways that Whole Foods stayed successful was not by competing, but my eliminating the competition through acquisition … and that when real competition came along as more mainstream retailers decided that this was a category with opportunities, Whole Foods ran into trouble and needed Amazon to rescue it.
This almost sounds like the Tony Soprano school of management - if someone looks like competition, whack them so you don't actually have to compete. Until, at some point, someone comes along and whacks you. (So much for "conscious capitalism"…)
There are are a couple of issues that immediately come to mind.
First, with Mackey departing (eventually), what path does Whole Foods take? There are a lot of people who would argue that the retailer has lost something off its fastball over the years, with the decline (such as it is) accelerating since the Amazon deal. With Mackey gone, how does the company define its mission? If the goal is to reach a broader audience, it may mean that it has to ease off on the nutritional evangelism a bit … which could actually have the effect of alienating its core customer base without really making it appeal to more people.
Whatever. Seems to me that Buechel is going to be under a lot of pressure even beyond the pressure that comes when you are the direct replacement for a founder.
Plus, it'll be interesting to see how a Mackey-less Whole Foods sees its operations absorbed into Amazon's broader bricks-and-mortar universe. I would imagine the temptation to do find efficiencies this way will be too great to ignore, though, again, this easily could lead to a softening of the brand's value proposition, which will make it less effective and lead to the efficiency issue being moot.
Second, what will Mackey do next? He's gonna have a ton of money and a non-compete …. and he is 68 years old. Here's my recommendation: if the non-compete allows it, open a chain of restaur-markets that serve healthy cuisine to patrons on the premises, but also offer both prepared meals and highly curated ingredients to people who still want to cook at home.
Of course, Mackey may be tired of the whole thing and just wants to kick back, smoke a cigar, eat some Fritos, have a beer and watch the world go by. Though I doubt it.