On June 16th, 2017, Amazon sent shockwaves across the world with the announcement of its Whole Foods acquisition. Paying a 27% premium to the stock price and paying a walloping USD 13.4b, Amazon has made its intentions clear about how they are going to approach and plan the future.
Whole Foods has a clear vision:
“We seek out the finest natural and organic foods available, maintain the strictest quality standards in the industry, and have an unshakeable commitment to sustainable agriculture.”
By acquiring Whole Foods, Amazon has indicated to the market that this is a sector they’re moving towards.
The organic food and beverage market has exploded and is further expected to grow to a $ 456 billion industry by 2025.In 11 countries more than 10% of the agricultural land is now organic. In India, Sikkim is the only state that is 100% organic and other states are soon to follow. Consumers are becoming increasingly aware of healthy alternatives to processed foods and the organic food market has exploded. Although expensive and not as widely available as processed foods, the “organic food” trend has certainly caught on. Moreover, this is a ratification of the shift to natural products. Organic foods is not just a trend like low-fat food or oat bran was, but has become a way of life and, is here to stay.
Walmart’s stock fell 7.1%, while Kroger Co. fell 17.0% on the day of the Whole Foods acquisition announcement. This validates the claim of how people are apprehensive about the ability of retail giants to adapt to the tectonic shift towards natural products.
Whole Foods has added significantly to Amazon’s footprint as well:
Yoga and Organic Foods have already gained a strong foothold in multi-billion dollar markets. Modern consumers have understood the harmful effects of chemicals and already adopted a natural way of life with food – medicine and healing is next.
Ayurveda is a 2600-year-old science that uses herbs and minerals from nature’s bounty to heal human ailments and help live a healthy lifestyle. While yoga (also traditionally Indian) has become a multibillion dollar industry – Ayurveda hasn’t yet.
While the global headwinds have always indicated that the time and stage is set for Ayurveda to find itself on a global platform, this event is further validation. The science of Ayurveda focuses on diet and food as an integral part of the treatment plan. The three dosha’s – Vata, Pitta and Kapha originate in the gut are regulated by the diet one eats. Ayurvedic principles recommend the consumption of fresh and natural fruits and vegetables and to consume them in their season of harvest. People are becoming more aware about the idea of food being used to remain healthy. That is a huge reason why people now question food and medicine before consuming anything. The method of production and sourcing of raw materials has also garnered significant interest.
Authored by: Krish Mehta, Guest Blogger