Friday, July 16 sent seismic shock waves through the grocery industry, as well as any other company on its peripheral. Grocery stocks plummeted and Wal-Mart heirs lost over billions. Friday, July 16 was the day Amazon announced it was buying Whole Foods, regulatory hurdles notwithstanding. Arguably the world’s most intimidating company has just gotten a whole (pardon the pun) lot scarier.
Amazon and its “anything you want you can get delivered to your door – with free shipping” is now about to add 450+ brick and mortar stores in prime (again pardon the pun) locations to its arsenal. The pontifications by pundits have spanned the gamut of views from outright alarm to guarded optimism of the opportunities that may arise.
The Fallacy of Amazon as the Bad Guy
The chicken littles of the world will prophesize that Amazon will destroy what’s left of America’s Main Street small businesses – using the book industry as an example. What they won’t say is that since Amazon has entered the market, independent book stores have actually done better – the main causality of the Amazon’s online surge being chain stores like Barnes and Noble, and the dead and buried Borders. These two corporate piranhas were on a Sherman’s March to the Sea destruction plan of the industry before Amazon blew up their plans. We can never go back to the days of fifty years ago when independents were the only players in the game. But people will always go to physical bookstores – just not in the same numbers. Clearing out the homogenized corporate boxes like Borders help ensure those numbers flow to independents.
When we talk about small businesses it’s easy to myopically look only at retailers and resellers. What about the entrepreneurs that create the products sold in those stores? What about the writers that supply the bookstores? Under the corporate chain model, independent writers and other small batch producers have no chance of getting their work any shelf space. With Amazon – you, I or anyone else can write a book and sell it worldwide through their ubiquitous online distribution channel. Even with independent book stores we can’t do that; locally probably yes … nationally or worldwide, no. It’s easy to pick and choose the facts to back up our preconceptions and worldviews – but seldom are things so cut and dry. Whether they produce the product or sell it on the street corner or Main Street – entrepreneurs both produce and sell, and we must support the entire independent channel … even if not all parts of the channel are independent.
Over the past two or three months I’ve been on a crusade of self-efficacy. The return of my lymphoma has put me in a “what I do matters to my very existence on this planet” mentality. While I have faith in the conventional chemotherapy treatment that has been prescribed to me (more or less) – I feel it’s my own efforts; whether it be nutrition, exercise and especially attitude, are going to be what makes or breaks the state of the journey down the road to my Perfect World.
In America the healthcare industry spends very little time, energy and resources working with patients to raise their level of self-efficacy. Even with overwhelming proof – discussions of diet, exercise and attitude are seldom raised, let alone made a priority. I don’t know if this is intentional, or just lack of training. It’s hard to believe it could be the latter since even the mainstream media has been covering the research ad nauseam. Whatever the reason – too many of us put way too much faith in “the man on the white horse and man in the white hat” and their ability to fix all that ails us (literally and figuratively).
Amazon and Whole Foods
This brings me to Amazon’s acquisition of Whole Foods. In American culture, Whole Foods is emblematic of healthy food – often overpriced health food … but healthy nonetheless. A trip through the isles of Whole Foods is not one populated by the brands normally seen at a Kroger’s, Albertson’s or other grocery chain. The shelves are filled with foods from providers and farms (all organic) that you wouldn’t otherwise find. Many of them sourced locally. Unfortunately Whole Foods is located in primarily in upscale areas, relegating those who often could benefit from healthier food choices less-than-optimum options
With Whole Foods, the hope is that through their ubiquitous distribution network; Amazon will not only find another piece to their puzzle of being the “everything store” – they’ll make the Whole Foods catalogue available to a wider less-affluent demographic. How this hope plays out, we can only wait and see. America is firmly rooted in an epidemic of obesity and bad food choices. Moving the dial away from the inevitably of chronic health conditions that result from these choices could go a long ways toward creating a society focused on well-being; rather than just the after-the-fact fixes that has immersed our country in the healthcare crisis we’re currently warring over. And that’s just the demand side of the Amazon/Whole Foods equation. The supply side offers up another set of possible variables and effects.
Current State of Affairs in Farming
For several years now I’ve lamented about the farming situation where I live in southern Montana. The climate is moderate and the land is irrigated. Most any type of food can be grown here – yet the only things that are; are sugar beets, feed corn and barley contracted by multi-national beer conglomerates. Ironically our farming community doesn’t grow food. It produces components for manufacturing processes – beer, processed sugar, cattle or ethanol for our car’s gas tanks. The produce I buy at the grocery store is trucked in from hundreds if not thousands of miles away. The only local food I have access to in this farming community comes from the garden in my backyard.
What this type crop selection has done (along with other factors) is decimate the population of farm-supported small towns. Fewer people are needed to produce small-margin crops like corn. Automation and standardization has replaced craft labor and unique crops options – often those seen on the shelves at Whole Foods. We bemoan the decline of rural of America, often affixing blame on liberals living in the coastal urban areas – when short-sided business decisions by rural areas may very well be main causes. We’ve turned our food supply over to multi-national conglomerates on Wall Street and abandoned local businesses in favor of box stores; and the farms and small towns traditionally supported by food production are the ones suffering most from it.
This does not bode well for upcoming generations wanting to farm either. Small rural towns have made themselves unappealing socially and economically to the very talent they need to sustain themselves. Instead of nurturing young farmers and their fledging families, they sell out to factory farms furthering the cycle of rural exodus. Multiple generations need to evolve together, leveraging the traditions of the past while being willing to reshape them for the needs and wants of today’s generations. Simply expecting young people to fit into the world of their parents not only isn’t fair – it’s not practical as they’ll just abandon it, leaving the old world to simple fade away.
Amazon and the Opportunity for Small Towns
We can look at the Amazon acquisition of Whole Foods as bad for small towns and their local businesses, as many naysayers have. We can ready ourselves to play the blame game – even before-the-fact. Or we can look deeper, past the surface of a ninety second news segment or 400 word blog piece.
I see the acquisition as potentially empowering local producers with a new distribution channel they wouldn’t otherwise have. No matter how the media tries to compare and pit Amazon against Wal-Mart – they are nothing alike. First and foremost, Amazon is a distribution network of hundreds of thousands of suppliers – the vast majority of them small businesses. I see no reason this wouldn’t extrapolate to farms and the small-batch food industries. Rather than large corporate farms producing pesticide-ridden components for a manufacturing process – what if small plot farmers focused on producing food that can be processed and sold locally or through the Amazon/Whole Foods platform. My expectations are that Amazon, gravitating from the Whole Foods brick and mortar network of stores (present and future), will spur the increased demand needed to tip farmers to refocus their efforts towards growing actual food.
But we shouldn’t assume that this extrapolation of healthy food is automatically going to happen just because of Amazon has entered the market. It’ll be up to farmers and small local producers to take advantage this opportunity. It’ll be up to farmers in areas like where I live in Montana to decide to break from sugar beets and feed corn and venture into the unknown land of organic small-batch farming. This transition will be as much cultural as it is economic or logistic. Most farmers are not only economically conservative – they’re politically conservative. Irrationally so, organic food is too often tied coastal liberals and all they represent. For example, kale (my garden’s most abundant crop) embodies all that’s wrong with America to many people in the small town I live in.
Demand dictates supply, but let us not forget supply also dictates demand. If the product isn’t there; no business, Amazon and Whole Foods included, will make efforts to market and sell it. I want to believe farming groups in locales such as mine can literally create demand for their product by simply making supply more readily available. And by coordinating efforts, they can make their voices heard and their product more competitively available. Imagine local coops acting as a logistical go-between and marketing arm for farmers and small-batch producers. And taking it one step further – these coops can unite creating an even more powerful presence.
Wal-Mart, Costco and the other box stores don’t source locally. Amazon, having the technical backend to do so combined with the Whole Foods small-batch organic focus – most likely will. Farmers will have to break free from their comfort zone and become creative in their crop selection. They will need to maximize local resources (geographic and economic) by identifying the assets of the area and leveraging them rather than just doing the same thing they did last year … worse yet a decade ago.
Building a Sustainable Community Around Healthy Food
Wherever possible rural areas must nurture an environment of craft and small business by taking advantage of local organic food production. With this should be a rebuilding of Main Street – not only as a center of economic activity – but one of civic engagement: all revolving around collective community well-being originating from the production and consumption of healthy food. I envision a societal momentum moving to a healthier, organically based food supply – and an emphasis on health, self-efficacy and well-being. Food (selection, production and distribution) should be the catalyst in all community health efforts. Without it the effort has little chance of sticking, let alone being built on.
None of this is going to happen on its own though. It’s going to take creative thinking, breaking free of “what is normally done.” Ironically it will be a return to our grandparents’ and great-grandparents’ time when farmers grew food for their table and that of their neighbors. Only we’ll be able to utilize the production and distribution technology and processes of today. This cross-generational synthesis will anchor the revitalization of rural America. Growing corn for ethanol and relying on Wal-Mart for our (sourced from god only knows where) is what has put rural America in the dire straits its in now. Now is time to break the cycle of the destruction of our well-being.
Whether the catalyst to a movement of collective well-being turns out to be June 16, 2017 – the day Amazon announced they would purchase Whole Foods, only time will tell. Regardless what’s not to say it can’t act like it is? What’s not saying we can’t our societal norm one of collaborative self-efficacy where our neighbors and our neighborhoods are center to the solution, rather than just afterthoughts at best.
Remember; “The man in the white hat, the man on the white horse” …
They still aren’t coming.