Photo courtesy of Whole Foods
We're keeping tabs on the beast that is Amazon-Whole Foods (alternatively, A-Whole) for you. This is our weekly round-up of news, separated from the rest of the noise.

Culture News Science

Alexa, bring snacks. Any brand will do.  

Legacy food companies are already struggling to keep up with changing consumer tastes, as brand loyalty plummets and Americans develop a taste for smaller-batch goods. Now, the General Mills and Nestles of the world have a brand-new source of anxiety: Alexa.

On Tuesday, the The Wall Street Journal reported that voice search assistants are expected to increase brand-agnostic buying—purchases made without specifying any particular company. That’s significant, because when people say, “Alexa, buy batteries,” or “Alexa, bring donuts,” the choice of which specific batteries or donuts gets left up to Amazon. Duracell and Dunkin’ don’t get a say.

Big digital platforms are herding consumers towards their own private supply chains.
That’s bad news for the world’s biggest brands. Currently, there’s no option to pay for higher priority in voice search. At the same time, major food companies stand to lose the long-term competitive advantage they’ve gained by paying for prominent placement on store shelves. But—perhaps unsurprisingly—Amazon may benefit most as voice search grows. According to the Journal, Alexa responds to generic voice search requests using the “Amazon’s Choice” algorithm, which a Bain & Co. study found heavily privileges the company’s own private-label products. Amazon currently owns 70 percent of home-assistant market, according to the Journal, and searches originating from a home assistant are expected to comprise a full 50 percent of all online searching five years from now.

TL;DR: Individual brands will lose footing as the big digital platforms (Amazon, Google, Apple) herd consumers towards their own private supply chains. Alexa, get the Lexapro.

This one’s for the children

Judging from a new investment, Amazon’s looking to make inroads with one of the great untapped consumer demographics: kids. Last week, the company invested in Greenlight Financial Tech, a startup that’s hawking a patent-pending “smart debit card for kids.” Greenlight raised $16 million in Series A funding from Amazon Alexa Fund, Amazon’s venture capital enterprise, and other investors including New Enterprise Associates and SunTrust Banks.

The model is a way to increase the purchasing power of millions of little ones—and that’s worth money.
Here’s how it works: Though they look like ordinary debit cards, Greenlight’s cards give parents near-total control on the backend through a smartphone app. Moms and dads can track purchases, block transactions on the fly, and blacklist certain retailers while greenlighting others (hence the name). The service would allow vigilant parents to influence their kids’ purchasing by, say, allowing purchases at Whole Foods Market while blocking debits at Buffalo Wild Wings.

Greenlight says it’s in the business of improving financial literacy for young people, and that may be. But the model is also a way to increase the purchasing power of millions of perpetually broke little ones—and everyone knows that’s worth money.

TL;DR: Amazon’s funding the future of debit-card-wielding tweens, and our guess is that it’s for purely altruistic reasons.

Amazon is killing the shopping mall. Will Whole Foods save it?

Here’s one hard-and-fast number that demonstrates just how much Amazon’s 2017 purchase of Whole Foods rocked the grocery industry: New grocery store openings declined by 29 percent last year, according to a new report from the commercial real estate firm Jones Lang LaSalle (JLL). But JLL found one bright spot in the brick-and-mortar doom and gloom, CNBC reports: Investments in “grocery-anchored” shopping centers actually grew 5 percent over the course of last year—one of the only areas of storefront-based retail that saw growth.

Alexa, get the Lexapro.
According to the firm’s research, a good grocery store can still make shopping centers an attractive proposition for both consumers and commercial developers. But there’s a caveat: Only the most popular stores are good enough to bring customers in droves. “In many U.S. markets you might have six or more grocery chains,” James Cook, JLL’s director of retail research in the Americas, told CNBC. “In most cases, investors are only interested in the top one or two. Those are the most defensible.”

The shortlist: Whole Foods, Trader Joe’s, and Wegman’s. That means Winn-Dixie and Tops Friendly Market are probably out of luck.

TL;DR: The traditional grocery industry isn’t dying—yet. It’s just becoming more consolidated.

Joe Fassler bio

Joe Fassler

Joe Fassler is The New Food Economy's features editor. His food safety and public health reporting has been a finalist for the James Beard Foundation Award in Journalism. Follow him @joefassler. Reach him by email at: joe.fassler@newfoodeconomy.org