Amazon CEO Jeff Bezos’ grocery ‘Waterloo’ is now his biggest opportunity

Whole Foods exec John Mackey once called Amazon’s grocery delivery business the online retailer’s Waterloo. But Mackey may have underestimated the flexibility and commitment of Amazon and its headstrong founder and CEO, Jeff Bezos.

Two years ago, speaking at a conference table at his offices in Austin, Texas, Whole Foods Market founder and then co-Chief Executive Officer John Mackey predicted imminent doom for rival in the fiercely competitive grocery business.

“Amazon Fresh is their Waterloo,” said Mackey, known paradoxically both for his earthy passion for organic foods and his imperious business swagger. “What’s the one thing people want? Convenience. You can’t do that with distribution centers and trucks.”

Mackey got one thing right: Years ago Amazon realized that the supply chain it pioneered for books, electronics and other hardgoods wasn’t suitable for perishable foods and doesn’t satisfy customers who want to pick their fruits and vegetables by hand rather than poring over pages in a web browser. Over the last decade, the Amazon Fresh delivery service, which drops big green totes of supermarket items on people’s doorsteps, has been one of the online retailer’s rare disappointments.

But Mackey may have underestimated the flexibility and commitment of Amazon and its own headstrong founder and CEO, Jeff Bezos. On Friday, Amazon agreed to buy the iconic, 39-year-old grocer, paying around $13.7 billion.

The deal is stunning many of Amazon’s closest observers and then, upon a moment’s reflection, finding a comfortable place in their understanding of the limitless ambitions and wily determination of Bezos, the world’s second-wealthiest man. In a sense, the surprising deal is preordained by his mission to construct the everything store: A company that delivers everything to everyone, at the best possible price and within the shortest amount of…

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