Whole Foods Co-Founder John Mackey Talks Selling to Amazon and What Excites Him Now

Many people start successful businesses, but few change how the rest of us live — or eat, for that matter. Natural, organic, and vegetarian diets were niche “health-nut” interests when John Mackey opened the first Whole Foods Market in 1980. By the time Amazon purchased the company for nearly $14 billion in 2017, they were mainstream lifestyles.

As CEO from Whole Foods’ founding until 2022, Mackey has a unique perspective on growing and selling a category-redefining business, which he recounts in his new memoir The Whole Story: Adventures in Love, Life, and Capitalism. He spoke with b. about negotiation, keeping (most) customers happy, and the continued importance of location, location, location.

b.: How did you stay focused on growth while giving current stores the resources and time they needed?

Mackey: I chose to focus most of my time and energy on growth and empowering more operationally skilled executives to focus more on current operations. It is impossible to do everything well yourself. Ultimately, you need to create an empowered team that works together to get all the necessary and important work done, both for today and in the future.

b.: Do you think real estate is as important an element for brick-and-mortar companies to consider as it was in the 20th century?

Mackey: Knowing how to select the right space for physical retail is both an art and a science, and if you make the wrong choice, it can be a disastrous and often very expensive mistake.

During my 44 years at Whole Foods, we established an extremely rigorous process for identifying new locations and it’s proven to be very, very successful. … “Location, location, location” remains just as true today as it was 25 years ago.

b.: Do we currently have a counterculture creating ideas that will flourish in the mainstream market as Whole Foods did?

Mackey: In my book The Whole Story, I use the phrase “counterculture” to describe the large youth movement of the 1960s and 1970s, which rejected many mainstream cultural values. The young people of this era put a greater emphasis on personal growth and spiritual evolution than they did on material success. Social justice and ecology also became very important movements in that era, and they still exist today in more evolved forms.

Regarding what excites me in our culture right now: the development of AI; the coming legalization of psychedelic therapies; the increased connectivity through social media and video conferencing; and the potential of a health revolution through technology and greater awareness of the importance of food and lifestyle for long-term health.

b.: What factors should be considered when deciding whether to sell your company?

Mackey: It is important to ask the question, “What is the best thing for the company and all of the key stakeholders — customers, team members, investors, suppliers, and the community? What is the win-win-win solution — good for you, good for me, and good for all of us?”

Sometimes the best solution is to sell the company instead of staying independent. That is the conclusion I came to when we decided to sell Whole Foods to Amazon. This decision created more value for all of our stakeholders than continuing to stay independent would have.

b.: Do you think one needs to enjoy negotiating to excel at it?

Mackey: Negotiating is a type of game, and it can and should be fun most of the time. I always seek the win-win when negotiating with anyone. I never try to take advantage of the other person when negotiating. I want the other person to experience that they are winning instead of losing in the deal. If the other person feels like they are being taken advantage of in some way, then they will often seek some type of payback in the future.

Often, if I feel like the other person is trying to take advantage of me in the negotiation, I rethink whether this is actually someone I want to be in partnership with at all. If they are trying to screw me in some way in the negotiation, then it is highly probable that they will try to do so in the partnership in the future.

Integrity and trust are the foundations of any good relationship and if I decide the person I’m negotiating with is not trustworthy, then I walk away from the deal.

b.: Whole Foods was able to leverage its size to push for higher animal welfare standards from its suppliers. Do you have any advice for smaller companies who want to be mindful of this?

Mackey: A business such as Whole Foods is in constant dialogue with its customers. Some … will want higher animal welfare standards and others won’t care. The business has a responsibility to try to inform and educate its customers about matters such as animal welfare and to urge them to make better-informed choices. It also has an ethical obligation to be truthful and not mislead its customers.

Ultimately, the customers vote with their wallets and Whole Foods will need to serve a diverse group of customers as best it can, knowing that there is no perfect solution.

b.: Are there scenarios where, for ethical reasons, a large-scale retailer should remove options?

Mackey: All physical retailers such as Whole Foods necessarily limit the products available that they can sell simply due to the lack of shelf space. They must make choices about who they are, what they want to sell, and who their customers are that they want to serve.

A natural and organic foods retailer such as Whole Foods focuses on selling the highest-quality foods that meet high standards of excellence. That means they will not sell some products that some of their customers may want them to sell, because those products don’t meet their standards. Some of their customers will be unhappy about this, but other customers will appreciate their commitment to quality and excellence.

Hopefully, the second group is large enough for the business to be successful. If not, then they need to rethink their business model.

b.: When partnering in business with family members or friends, as you did, is it important to compartmentalize work and personal time?

Mackey: It’s possible, but it’s complicated and challenging. I worked with several family members and significant others in the early days, including my co-founder Renee, my brother-in-law Jean-Claude, and my father.

My relationship with my dad was one of my most important relationships, both personally and professionally. He was my mentor for the first 16 years of Whole Foods and was my best man at my wedding. He had a seat on our board and for a long time, I really didn’t make any major decisions without clearing them with him.

I eventually outgrew my dad professionally and had to ask him to leave the board. This wasn’t easy, but it was what was best for both us and the business. It’s also been really nice having my relationship with my wife, Deborah, not entangled in work. Home is a safe harbor for me from work stresses. … In a marriage, you will be equal partners, but there may be an authority hierarchy in the workplace. If there is, this can lead to role confusion and conflicts in the business.

b.: Does creating a fun corporate culture ever come at the expense of profits?

Mackey: It could, but it doesn’t need to. Instead of looking for trade-offs, I prefer to look for win-win-win solutions. Create a fun corporate culture that raises morale and productivity in such a way that it also increases profits.

The Whole Story is available now.

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