tag:theconversation.com,2011:/ca/topics/whole-foods-20823/articlesWhole Foods – The Conversation2024-03-14T12:42:05Ztag:theconversation.com,2011:article/2244962024-03-14T12:42:05Z2024-03-14T12:42:05ZEmployees have a right to express support for Black Lives Matter while they’re on the job, according to a historic labor board decision<figure><img src="https://images.theconversation.com/files/581413/original/file-20240312-24-pix1iz.jpg?ixlib=rb-1.1.0&rect=149%2C183%2C4387%2C2788&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The aftershocks of George Floyd's death are still reverberating for Home Depot.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/mourners-in-home-depot-aprons-wait-to-view-the-casket-of-news-photo/1218632854?adppopup=true">Godofredo A. Vásquez-Pool/Getty Images</a></span></figcaption></figure><p>A <a href="https://www.nlrb.gov/news-outreach/news-story/board-rules-employees-black-lives-matter-action-at-home-depot-was">Home Depot store violated labor law</a> when it disciplined Antonio Morales, the National Labor Relations Board ruled on Feb. 21, 2024.</p>
<p>Morales, a Home Depot employee in the Minneapolis area, had drawn the letters BLM on a work apron and refused to remove them. BLM stands for the <a href="https://www.loc.gov/item/lcwaN0016241/">Black Lives Matter movement</a>, which campaigns against violence and systemic racism aimed at Black people. Morales ultimately quit because of pressure to end the use of BLM messaging.</p>
<p>The NLRB has now <a href="https://www.nytimes.com/2024/02/21/business/home-depot-blm-nlrb-ruling.html">ordered Home Depot to rehire Morales</a> based on the legal right U.S. employees have to engage in “<a href="https://www.nlrb.gov/about-nlrb/rights-we-protect/your-rights/employee-rights">concerted activity</a>” for the purpose of “mutual aid or protection.”</p>
<p>As a legal scholar who has <a href="https://law.tamu.edu/faculty-staff/find-people/faculty-profiles/michael-z-green">studied issues of race in the workplace</a> for more than 20 years, I believe the Home Depot decision establishes an important precedent for workers who express broad concerns about systemic racism.</p>
<p>This decision indicates that employees have a right to demonstrate their support for the Black Lives Matter movement on the job if they are seeking to improve their own working conditions with respect to racial discrimination. And this right persists even if the messaging arguably has political connotations that some workers or customers might disagree with. </p>
<h2>Right to display slogans</h2>
<p>The <a href="https://www.nlrb.gov/about-nlrb/who-we-are">National Labor Relations Board</a> is the federal agency that conducts elections when employees seek to be represented by a union. It also prosecutes and adjudicates complaints filed against employers and unions based upon unfair labor practices as defined by the <a href="https://www.nlrb.gov/guidance/key-reference-materials/national-labor-relations-act">National Labor Relations Act</a>. </p>
<p>Workers have the right to display slogans related to working conditions when they’re on the job under <a href="https://www.law.cornell.edu/uscode/text/29/157">Section 7 of that law</a>, which was enacted in 1935. Section 7 “protects the rights of employees to wear and distribute items such as buttons, pins, stickers, t-shirts, flyers, or other items displaying a message relating to terms and conditions of employment, unionization, and other protected matters.”</p>
<p>In this <a href="https://apps.nlrb.gov/link/document.aspx/09031d4583c6ebac">Home Depot case</a>, the NLRB reviewed a preliminary decision issued in 2022 by <a href="https://apps.nlrb.gov/link/document.aspx/09031d45837af63d">Paul Bogas</a>, an NLRB administrative law judge. Bogas found that Home Depot’s ban on manifestations of support for the Black Lives Matter movement didn’t violate labor law.</p>
<p>The NLRB disagreed with the decision by Bogas in a 3-1 decision that cited a <a href="https://www.oyez.org/cases/1977/77-453">1978 Supreme Court precedent</a>.</p>
<p>In that case, Eastex Inc. v. National Labor Relations Board, the court found that workers distributing materials related to their terms and conditions of employment are protected by Section 7 when there is a reasonable and direct connection to the advancement of mutual aid and protection in the workplace.</p>
<p>That ruling held that this protection exists even when political messages may be involved in the workers’ communications. “Moreover, what may be viewed as political in one context can be viewed quite differently in another,” the Supreme Court held.</p>
<p>At the Home Depot in question, Morales and other employees had previously discussed concerns about racial misconduct by a supervisor and two separate incidents of destroying a display of Black History Month materials the workers had created to celebrate Black culture.</p>
<p>Employees had a right to express their support for BLM messaging in the workplace because they had already objected to working conditions based upon racial concerns, the NLRB’s majority ruled.</p>
<p>One of the NLRB’s four members, <a href="https://www.nlrb.gov/bio/marvin-e-kaplan">Marvin Kaplan</a>, <a href="https://cdn.theconversation.com/static_files/files/3135/Board_Decision-HOME_DEPOT_USA.pdf?1710272577">dissented, in part, from the majority</a> based on his different view about the purpose of Morales’ display of the BLM messaging. Morales was expressing support for the Black Lives Matter movement’s “goal of combating police violence against Black individuals – not with improving terms and conditions of employment,” Kaplan wrote.</p>
<h2>Discussing racial justice at work</h2>
<p>Morales’ show of support for the Black Lives Matter movement in the workplace was hardly an outlier.</p>
<p>Many Black Americans began to <a href="https://www.usatoday.com/story/money/2020/06/17/george-floyd-protests-black-lives-matter-employees-corporate-america-racism/3195685001/">speak out about racism and discrimination</a> by discussing BLM in their workplaces amid the widespread protests that followed <a href="https://theconversation.com/pain-of-police-killings-ripples-outward-to-traumatize-black-people-and-communities-across-us-159624">George Floyd’s murder by police officers on May 25, 2020</a>, in Minneapolis.</p>
<p>A year after Floyd was killed, a poll found that 68% of Americans thought that employees “<a href="https://www.paradigmiq.com/blog/nearly-7-in-10-americans-think-racial-injustice-is-problem-and-believe-they-should-be-able-to-talk-about-it-at-work/">should be able to discuss racial justice issues at work</a>.”</p>
<p>Employees who wanted to show their support for BLM at work have in recent years met resistance from other employers besides Home Depot, <a href="https://www.hrdive.com/news/diversity-inclusion-grocery/627933/">including the Publix</a> and <a href="https://www.kuow.org/stories/grocery-store-workers-union-wins-case-for-black-lives-matter-buttons">Fred Meyer supermarket chains</a>.</p>
<p>Some companies have said their bans on workers displaying BLM insignia were intended to <a href="https://www.seattletimes.com/business/local-business/black-lives-matter-logos-in-the-workplace-divide-employers-workers-and-customers/">prevent disruptive responses</a> by other workers and customers who may not agree with the movement’s message. </p>
<h2>Mixed decisions</h2>
<p>Legal decisions about this issue have been mixed so far.</p>
<p>A court found that <a href="https://casetext.com/case/amalgamated-transit-union-local-85-v-port-auth-of-allegheny-cnty-2">a Pennsylvania government agency violated the First Amendment</a> when it prohibited workers from wearing face masks emblazoned with BLM messaging during the COVID-19 pandemic.</p>
<p>But <a href="https://www.nytimes.com/2023/12/21/business/whole-foods-black-lives-matter.html">Whole Foods has prevailed against workers</a> in similar cases. An <a href="https://www.aseonline.org/News-Events/ASE-News/Press-Releases/nlrb-board-overrules-its-administrative-judges-to-hold-in-favor-of-over-riding-dress-rules-for-worker-blm-wear">NLRB administrative law judge</a> found that its employees had worn BLM insignia merely as a political statement <a href="https://www.shrm.org/topics-tools/employment-law-compliance/court-dismisses-claims-whole-foods-black-lives-matter-masks">unrelated to their working conditions</a>.</p>
<p>That preliminary decision is now in question after the NLRB’s final ruling about the same issue in the Home Depot dispute.</p>
<p>Whole Foods workers asserted in a separate legal challenge that their employer’s ban on wearing BLM insignia <a href="https://www.foxbusiness.com/politics/appeals-court-rejects-whole-foods-workers-discrimination-claim-dress-code-crackdown-blm-protests">represented racial discrimination under federal law</a>. In that case, the court found that the employees had failed to prove that the ban had a racial motivation.</p>
<p>Whole Foods was instead seeking to stop expression of a “politically charged” and “controversial message by employees in its stores,” according to the court.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/581411/original/file-20240312-18-s5qhb2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="People stand in front of a Whole Foods with painted signs depicting a woman in a Black Lives Matter face mask and another one with a Black person's face without a mask." src="https://images.theconversation.com/files/581411/original/file-20240312-18-s5qhb2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/581411/original/file-20240312-18-s5qhb2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=407&fit=crop&dpr=1 600w, https://images.theconversation.com/files/581411/original/file-20240312-18-s5qhb2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=407&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/581411/original/file-20240312-18-s5qhb2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=407&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/581411/original/file-20240312-18-s5qhb2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=512&fit=crop&dpr=1 754w, https://images.theconversation.com/files/581411/original/file-20240312-18-s5qhb2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=512&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/581411/original/file-20240312-18-s5qhb2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=512&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Whole Foods employees who were dismissed from their shift for wearing Black Lives Matter face masks conduct a protest in 2020.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/adam-hermon-left-and-abdulai-barry-stand-in-front-of-whole-news-photo/1227707669?adppopup=true">Erin Clark/The Boston Globe via Getty Images</a></span>
</figcaption>
</figure>
<p>One interesting aspect of these cases is the apparent contradictions involved.</p>
<p>After Floyd’s death, many <a href="https://abcnews.go.com/Politics/corporate-america-weighs-protests-racism-companies-struggle-diverse/story?id=71077049">big companies proclaimed their commitment to fight racism</a> and promised to do a better job of supporting diversity, equity and inclusion efforts. </p>
<p><a href="https://corporate.homedepot.com/news/diversity-equity-inclusion/message-craig-menear-racial-equality-justice-all">Home Depot</a>, for example, expressed its “anguish over the senseless killing of George Floyd” and “other unarmed Black men and women in our country.” The company explained how it had established worker programs “to facilitate internal town halls to share experiences and create better understanding.” </p>
<p>Amazon, which owns Whole Foods, <a href="https://www.aboutamazon.com/news/policy-news-views/amazon-donates-10-million-to-organizations-supporting-justice-and-equity">made a similar statement</a>, along with a pledge to donate US$10 million to “organizations that are working to bring about social justice and improve the lives of Black and African Americans.”</p>
<h2>Possible aftermath</h2>
<p>To be sure, this NLRB decision isn’t the final word on this issue, because <a href="https://apps.nlrb.gov/link/document.aspx/09031d4583c8e109">Home Depot has filed an appeal</a>.</p>
<p>Regardless of how the courts respond, the NLRB’s decision is historic. The labor panel has established that a worker’s support for Black Lives Matter in the workplace isn’t merely an expression of their political beliefs.</p><img src="https://counter.theconversation.com/content/224496/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael Z. Green does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Racism can be a workplace issue, even at Home Depot.Michael Z. Green, Professor of Law and Director, Workplace Law Program, Texas A&M UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1663932021-09-28T11:56:22Z2021-09-28T11:56:22ZCan healthy people who eat right and exercise skip the COVID-19 vaccine? A research scientist and fitness enthusiast explains why the answer is no<figure><img src="https://images.theconversation.com/files/422695/original/file-20210922-25-11lek97.jpg?ixlib=rb-1.1.0&rect=16%2C24%2C5439%2C3612&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Several thousand protestors opposed to the COVID-19 vaccine march through the streets of midtown Manhattan in New York on Sept. 18, 2021. </span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/several-thousand-protestors-opposed-to-the-covid-19-vaccine-news-photo/1341164693?adppopup=true">Andrew Lichtenstein/Corbis News via Getty Images</a></span></figcaption></figure><p>I’m a fitness enthusiast. I also adhere to a nutrient-dense, “clean” eating program, which means I minimize my sugar intake and eat a lot of whole foods for the purpose of optimizing my health. </p>
<p>You might wonder how effective such a diet and exercise plan would be in the fight against COVID-19, since some <a href="https://www.washingtonpost.com/technology/2021/09/12/wellness-influencers-vaccine-misinformation/">have suggested</a> – without supporting evidence – that vaccination may be unnecessary if a detailed wellness lifestyle is closely followed. </p>
<p>As a <a href="https://scholar.google.com/scholar?hl=en&as_sdt=0%2C43&q=Bloomer+and+memphis&btnG=">research scientist</a> who has studied nutrition for close to 20 years, I have watched the wellness community’s response to the COVID-19 vaccines with great interest. While eating right can <a href="https://doi.org/10.3390/nu12061562">favorably impact the immune system</a>, it is not reasonable to expect that nutrition alone will defend against a potentially life-threatening virus. </p>
<h2>My experience with nutrition science</h2>
<p>My lab group at the <a href="https://www.memphis.edu/healthsciences/">University of Memphis</a> studies the effect of food and isolated nutrients on human health. In January 2009, we conducted an initial study of a stringent vegan diet. We enrolled 43 men and women who were allowed to eat as much plant-based food as desired, but drank only water, for 21 days. </p>
<p>The results demonstrated improvements <a href="https://doi.org/10.1186/1476-511X-9-94">in many variables</a> related to cardio-metabolic health, such as blood cholesterol, blood pressure, insulin and C-reactive protein – a protein that increases in response to inflammation. We have <a href="https://pubmed.ncbi.nlm.nih.gov/?term=bloomer+and+daniel+fast">since completed</a> multiple human and animal nutrition studies using this dietary program. </p>
<figure class="align-center ">
<img alt="A woman eating a healthy salad." src="https://images.theconversation.com/files/422240/original/file-20210920-19-log1mt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/422240/original/file-20210920-19-log1mt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/422240/original/file-20210920-19-log1mt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/422240/original/file-20210920-19-log1mt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/422240/original/file-20210920-19-log1mt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/422240/original/file-20210920-19-log1mt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/422240/original/file-20210920-19-log1mt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Diet improvements may reduce or eliminate the need for some medications, but a clean diet cannot completely protect you from COVID-19.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/woman-eating-salad-royalty-free-image/912617718?adppopup=true">Tara Moore via Getty Images</a></span>
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<p>My lab’s research has resulted in some 200 peer-reviewed scientific manuscripts and book chapters specific to <a href="https://umwa.memphis.edu/fcv/viewprofile.php?uuid=rbloomer">nutrients and exercise</a>, and the interaction between these two variables. The results of our work, as well as that of other scientists, clearly demonstrate the power of food to favorably impact health.</p>
<p>For many individuals, a positive change in eating habits results in such an improvement in clinically relevant measures like <a href="https://doi.org/10.1186/1476-511X-9-94">blood cholesterol</a> <a href="https://doi.org/10.3390/ijerph17072557">and glucose</a> that doctors can sometimes reduce or eliminate certain medications used to treat high cholesterol and diabetes. In other cases, these measures improve but the patient still requires the use of medications to control their disease. This tells us that in some situations, a great nutrition program is simply not enough to overcome the body’s challenges.</p>
<h2>Nutrition and other wellness approaches do matter</h2>
<p>Although certain <a href="https://doi.org/10.3389/fphar.2020.01189">natural products</a> have been discussed as treatments for COVID-19, little emphasis has been placed on whole food nutrition as a protective measure. I think this is unfortunate, and I believe strengthening our immune system with the goal of battling COVID-19 and other viral infections is of great importance. And the <a href="https://theconversation.com/good-nutrition-can-contribute-to-keeping-covid-19-and-other-diseases-away-145086">evidence tells us</a> that a <a href="https://doi.org/10.3390/nu12061562">nutrient dense diet</a>, <a href="http://dx.doi.org/10.1136/bjsports-2021-104080">regular exercise</a> and <a href="https://doi.org/10.1007/s00424-011-1044-0">adequate sleep</a> can all contribute to optimal immune function. </p>
<p>Regarding nutritional intake, a <a href="https://doi.org/10.1136/bmjnph-2021-000272">recently published study</a> using a sample of health care workers who contracted COVID-19 noted that those who followed a plant-based or pescatarian diet had 73% and 59% lower odds of moderate to severe COVID-19, respectively, compared to those who did not follow those diets. Although interesting, it’s important to remember that these findings represent an association rather than a causal effect. </p>
<p>While people can use nutrition to help shore up their immune system against COVID-19, diet is only one important consideration. Other <a href="https://doi.org/10.3945/an.115.010207">variables matter</a> a great deal too, including <a href="https://pubmed.ncbi.nlm.nih.gov/29306937/">stress management</a>, <a href="https://doi.org/10.3389/fimmu.2020.570122">nutritional supplements</a> and <a href="https://doi.org/10.1016/S0140-6736(20)31142-9">physical distancing and mask-wearing</a>.</p>
<p>But to be clear, all of those elements should be considered tools in the toolbox to help combat COVID-19 – not a replacement for potentially life-saving vaccines. </p>
<figure class="align-center ">
<img alt="A teenage boy at a clinic getting a COVID-19 shot." src="https://images.theconversation.com/files/422243/original/file-20210920-25-4sj241.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/422243/original/file-20210920-25-4sj241.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/422243/original/file-20210920-25-4sj241.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/422243/original/file-20210920-25-4sj241.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/422243/original/file-20210920-25-4sj241.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/422243/original/file-20210920-25-4sj241.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/422243/original/file-20210920-25-4sj241.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Charles Muro, age 13, receives a COVID-19 shot at a mass vaccination center in Hartford, Connecticut. Without the vaccine, even young people in good health are not fully protected from the virus.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/charles-muro-age-13-is-inoculated-by-nurse-karen-pagliaro-news-photo/1232871480?adppopup=true">Joseph Prezioso/AFP via Getty Images</a></span>
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</figure>
<h2>Vaccines are not perfect, but they save lives</h2>
<p>I find it interesting that nearly all parents understand the importance of having their kids <a href="https://abcnews.go.com/US/vaccine-mandates-place-attend-school-us/story?id=80046650">vaccinated against serious illnesses</a> like mumps, measles and varicella. They do not expect that certain foods, or a nurturing environment, will do the job of a vaccine. </p>
<p>Yet, when it comes to COVID-19, this thought process is abandoned by <a href="https://www.washingtonpost.com/technology/2021/09/12/wellness-influencers-vaccine-misinformation/">some who believe</a> that a healthy lifestyle will substitute for the vaccine, without seriously considering <a href="https://theconversation.com/what-happens-when-the-covid-19-vaccines-enter-the-body-a-road-map-for-kids-and-grown-ups-164624">what the vaccine actually does to provide protection</a> against the virus – something that a healthy lifestyle alone simply cannot do. </p>
<p>When contemplating whether to receive the COVID-19 vaccine, consider the following: All medications have risks, including things as <a href="https://www.huffingtonpost.co.uk/entry/daily-aspirin-causes-more-than-3000-deaths-per-year-scientists-warn_uk_593fb481e4b0b13f2c6daa10">seemingly benign as aspirin</a>. <a href="https://doi.org/10.1177/0024363918816683">Hormonal contraception</a> – something used by millions of women every month – is thought to cause an estimated 300-400 deaths annually in the U.S. The same is true for <a href="https://www.huffpost.com/entry/what-would-wendy-davis-do_b_3672484">cosmetic surgery</a>, <a href="https://doi.org/10.1007/s00266-020-02027-z">Botox injections</a> and other elective procedures. </p>
<p>Many people are willing to accept the low risks in those cases, but not with those involving <a href="https://theconversation.com/what-does-full-fda-approval-of-a-vaccine-do-if-its-already-authorized-for-emergency-use-165654">the COVID-19 vaccines</a> – despite the fact that the risk of <a href="https://www.theguardian.com/world/2021/aug/27/blood-clot-risk-greater-after-covid-infection-than-after-vaccination">serious complications or death from COVID-19</a> far outweighs the low risk of serious <a href="https://theconversation.com/new-covid-19-vaccine-warnings-dont-mean-its-unsafe-they-mean-the-system-to-report-side-effects-is-working-164455">adverse events</a> from the vaccines. </p>
<p>No lifestyle approach, including strict adherence to a holistic, nutrient-dense diet – vegan, plant-forward or otherwise – will confer total protection against COVID-19. The vaccines <a href="https://theconversation.com/medicine-is-an-imperfect-science-but-you-can-still-trust-its-process-166811">aren’t perfect</a> either; <a href="https://theconversation.com/what-is-a-breakthrough-infection-6-questions-answered-about-catching-covid-19-after-vaccination-164909">breakthrough infections</a> do occur in some cases, though the vaccines <a href="https://www.wsj.com/articles/breakthrough-cases-covid-19-delta-variant-11627596643">continue to provide robust protection</a> against <a href="https://www.cdc.gov/mmwr/volumes/70/wr/mm7037e1.htm?s_cid=mm7037e1_w#T1_down">severe illness and death</a>. </p>
<p>I encourage people to do all they can to improve the health and functioning of their immune system, naturally. Then, seriously consider what additional protection would be gained from vaccination against COVID-19. When people make decisions based on the latest science – which is always evolving – rather than on emotions and misinformation, the decision should become much clearer.</p><img src="https://counter.theconversation.com/content/166393/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Richard J. Bloomer has received research support and has served as a consultant to a variety of dietary ingredient and supplement companies over the past 20 years. </span></em></p>A growing body of research shows that nutrition, sleep, exercise and a host of other lifestyle choices can help optimize the immune system. But they are no substitute for life-saving vaccines.Richard Bloomer, Dean of the College of Health Sciences, University of MemphisLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1356182020-04-07T12:06:52Z2020-04-07T12:06:52ZStriking Amazon, Instacart employees reveal how a basic economic principle could derail our ability to combat the coronavirus<figure><img src="https://images.theconversation.com/files/325879/original/file-20200406-103556-au4hwi.jpg?ixlib=rb-1.1.0&rect=117%2C148%2C5108%2C3330&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Samuel Diaz, a delivery worker for Amazon Prime, loads his vehicle with groceries from Whole Foods in Miami.</span> <span class="attribution"><span class="source">AP Photo/Lynne Sladky</span></span></figcaption></figure><p>A series of recent protests by the workers preparing and delivering our essential foods and other goods highlights a key risk to our ability to combat the coronavirus. </p>
<p>Some employees at an Amazon warehouse and Instacart “shoppers” <a href="https://www.npr.org/2020/03/30/823767492/amazon-instacart-grocery-delivery-workers-strike-for-coronavirus-protection-and-">briefly walked off the job</a> on March 30, citing inadequate health protections and compensation. And Whole Foods workers <a href="https://www.theguardian.com/business/2020/mar/31/whole-foods-coronavirus-outbreak-us-health">organized a national “sick out” protest</a> to pressure the grocery chain for hazard pay and more protections.</p>
<p>With <a href="https://www.nytimes.com/interactive/2020/us/coronavirus-stay-at-home-order.html">most Americans sheltering in place</a>, these workers are among the millions of individuals who face heightened risks as they continue to do their jobs keeping our refrigerators and pantries stocked during the pandemic. But because of an economic theory <a href="https://scholar.google.com/citations?user=fcZ3xW4AAAAJ&hl=en&oi=ao">I study</a> known as “positive externalities,” most of them aren’t being adequately compensated for it. </p>
<h2>Creating positive externalities</h2>
<p>A <a href="https://www.imf.org/external/pubs/ft/fandd/2010/12/basics.htm">positive externality</a> is created when someone’s private behavior leads to broader social benefits. Common examples include when someone buys a <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3332259/">hybrid car</a>, gets <a href="https://theincidentaleconomist.com/wordpress/vaccine-externalities/">vaccinated</a> or <a href="https://medium.com/impact-economics/the-true-cost-of-smoking-9f938a7cfaa2">stops smoking</a>. In each of these examples, someone’s private behavior reduces risks for everyone. </p>
<p>A negative externality, on the other hand, is when private behavior leads to a public harm, such as pollution from a factory. </p>
<p>By <a href="https://www.theatlantic.com/health/archive/2020/03/coronavirus-how-get-food-safely/608008/">delivering food and other supplies</a>, workers at Instacart, Whole Foods and hundreds of other companies are reducing the need for people to congregate and thus lowering the systemic risk of COVID-19 for everyone. </p>
<p>This is an essential public health benefit at a critical time in the pandemic. Without them, it would be much harder to fulfill government stay-in-place orders and slow the spread of COVID-19. </p>
<p>But in general they perform jobs that <a href="https://www.businessinsider.com/why-amazon-delivery-workers-feel-exposed-and-vulnerable-to-coronavirus-2020-3#in-the-same-post-clark-announced-new-steps-to-keep-employees-in-the-us-and-europe-safe-amid-the-pandemic-including-temperature-checks-health-and-safety-audits-and-supplying-face-masks-16">pay relatively little</a>, and the workers <a href="https://www.washingtonpost.com/politics/2020/04/06/facing-covid-19-low-wage-service-workers-are-striking-across-country-heres-why-why-it-matters/">say they lack basic protective gear</a> such as hand sanitizer and masks that would keep them safe. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/326168/original/file-20200407-110267-g5kp3c.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/326168/original/file-20200407-110267-g5kp3c.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/326168/original/file-20200407-110267-g5kp3c.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/326168/original/file-20200407-110267-g5kp3c.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/326168/original/file-20200407-110267-g5kp3c.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/326168/original/file-20200407-110267-g5kp3c.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/326168/original/file-20200407-110267-g5kp3c.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Amazon employees hold signs outside a fulfillment center in Romulus, Michigan.</span>
<span class="attribution"><span class="source">AP Photo/Paul Sancya</span></span>
</figcaption>
</figure>
<h2>Paying for an externality</h2>
<p>Unfortunately, the free market isn’t very good at dealing with positive externalities like this – or compensating those who bear the cost. As a result, there’s a risk the people creating the public benefit will not provide enough of it.</p>
<p>This is easiest to understand by way of example. </p>
<p>Imagine a “shopper” for Instacart – the app-based food delivery platform – delivers groceries to someone with COVID-19. It begins as a private transaction: The worker gets paid, and the sick customer gets food delivered in a time of need. But there is an additional benefit to the rest of us – the positive externality – from the delivery. Everyone is safer because the sick consumer doesn’t have to go to the grocery store. </p>
<p>Then there is the extra cost. The Instacart worker faces a heightened health risk by spending more time outside of home and delivering groceries to the sick customer. While the customer may pay a higher tip as a measure of her gratitude, it is unlikely to be enough to take into account the value of the broader benefit to society or the concentrated risk that the Instacart worker faces in producing this benefit. </p>
<p>And that means the undercompensated worker may decide it’s in her interest to stop putting herself at risk – and stop delivering food.</p>
<p>Now consider that this is happening countless times and in countless ways across the country as millions of workers keep putting themselves at risk so that others can stay at home. </p>
<p>Who should pay the workers enough to compensate them for their extra risk and ensure we all continue to enjoy this broad public benefit? </p>
<p>Instacart and other companies, of course, are the ones paying these workers, along with fees or tips paid by consumers. The <a href="https://www.businessinsider.com/amazon-walmart-expand-online-grocery-for-desperate-shoppers-2020-4">surging demand</a> for these companies’ services suggests they should be able to afford to offer higher wages and provide the kinds of protective gear like masks and hand sanitizer that the workers need. </p>
<p>Some companies are doing that. <a href="https://www.businessinsider.com/retailers-pay-increase-bonus-temporary-coronavirus-pandemic-2020-3">Target, Amazon</a> and <a href="https://www.supermarketnews.com/retail-financial/whole-foods-amazon-enact-temporary-wage-hike-coronavirus-response">Whole Foods</a> have said they will provide their workers temporary “hazard pay.” And Instacart <a href="https://thehill.com/policy/technology/490896-instacart-promises-to-provide-workers-coronavirus-health-kits-after-strike">responded to the protest</a> by providing its gig workers with health and safety kits.</p>
<h2>A government response</h2>
<p>But a few companies stepping up to compensate their own workers slightly more isn’t enough to compensate the workers for the great benefits they are providing to the public at large. </p>
<p>In economics, widely shared public benefits such as large parks and clean lakes <a href="https://www.economicshelp.org/micro-economic-essays/marketfailure/subsidy-positive-ext/">tend to require</a> public – that is government – support. Similarly, the production of a good that is costly but has a large positive externality, like the efforts of all these workers, needs a government response. </p>
<p>Essentially, the government could compensate these workers for the benefits to the public through something like a hazard subsidy and a supply of protective gear, thereby ensuring an ample supply of these workers and the services they provide during this time of crisis. </p>
<p>To be sure, this isn’t a perfect solution. For instance, absent some sort of market forces dictating how much the government subsidizes, the government may pay too much. And there would be questions about which workers are truly essential to creating the public health benefits and should receive the higher pay – should liquor employees be included? </p>
<p>But in a time in which the government is already offering large, unqualified <a href="https://www.nytimes.com/article/coronavirus-stimulus-package-questions-answers.html">aid packages</a> to the public, such costs are not insurmountable. To get close to the right solution, I believe we first need to recognize how these workers create a large public benefit for us all. </p>
<p>[<em>You need to understand the coronavirus pandemic, and we can help.</em> <a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=upper-coronavirus-help">Read The Conversation’s newsletter</a>.]</p><img src="https://counter.theconversation.com/content/135618/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Leigh Osofsky does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Delivery workers and others who ensure most people don’t have to go outside for essential goods are creating what economic theorists call an uncompensated ‘positive externality.’Leigh Osofsky, Professor of Law, University of North Carolina at Chapel HillLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/941472018-04-02T18:59:07Z2018-04-02T18:59:07ZWill Amazon be your next bank and health insurance?<figure><img src="https://images.theconversation.com/files/212831/original/file-20180402-189801-800vup.jpg?ixlib=rb-1.1.0&rect=0%2C162%2C3500%2C1886&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Amazon founder Jeff Besos.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/samchurchill/6927955020/in/photolist-byczEm-4x4zhh-49zDrd-foChCZ-fpwE5Y-GXvbZ-GQEoL-exQZ9-FaR6g-AoqF-dEMn5a-8MpFbB-JUbAJa-56PcCG-fyGpPJ-GQC7R-GQEw3-UZz3nW-fvf9tL-CXEft-fNifdn-c7cgmE-c7cgaJ-px3ycA-4GH29q-4GH2iN-GY5Rj-4GLVHG-DkoV-eCS3sQ-c7ckwo-9cUXQ-s3etE-c7cc67-gpKR8-c5otZ9-ardYMw-c5osD7-dxUL1m-c7ci9J-GSQt1-c7cff1-zYEy-c5otNs-FvTFit-c5osry-ESAoM-c5oso9-c5osjw-c7ckNm">Sam Churchill/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><blockquote>
<p>“One of Mr. Rockefeller’s most impressive characteristics is patience.”</p>
</blockquote>
<p>This 1902 assertion by pioneering journalist Ida Tarbell described <a href="https://www.poynter.org/news/today-media-history-ida-tarbells-1902-1904-investigative-series-corruption-standard-oil">John D. Rockefeller</a>, one of the wealthiest men in the world in the early 20th century.</p>
<p>Today, it could as easily be used to describe Jeffrey Preston Bezos, the founder and CEO of Amazon, and <a href="http://money.cnn.com/2018/01/09/technology/jeff-bezos-richest/index.html">currently the richest man on Earth</a>. Bezos had to wait 14 years to see the first positive quarterly result of his company. In another testament to his long-term vision, he recently invested $42 million in the construction of a <a href="http://www.businessinsider.fr/us/everything-you-need-to-know-about-jeff-bezos-amazing-10000-year-clock-2013-8">10,000-year clock</a>. This 150-meter tall apparatus is being built within a mountain in Texas. It tells time in terms of decades and centuries rather than seconds and minutes, and its “cuckoo” mechanism will be activated only once a year. Bezos believes this gigantic endeavour – based on a prototype designed by the <a href="http://longnow.org/clock/">Long Now Foundation</a> – should be a timeless reminder to our species (as well as future civilizations) that humanity should nurture long-term ambitions.</p>
<p>“Relentless” is another way to describe Bezos. This was one of the names he considered for his online book-selling service back in 1997 (in fact, the URL relentless.com is still owned by Amazon and redirects to its main website to this day). His business objectives relentlessly grew from being the world’s largest bookseller, to becoming the “everything store” and then branching out to create the world’s greatest cloud service provider, with <a href="https://en.wikipedia.org/wiki/Amazon_Web_Services">Amazon Web Services</a> (providing data storage to clients ranging from NASA to Netflix). Not to mention the founding of Blue Origin, a spaceflight services company whose Latin motto “Gradatim Ferociter” means “Step by step, ferociously”. In 2013 Bezos shocked the media world by snapping up the <a href="https://www.theguardian.com/media/2013/aug/05/washington-post-sold-jeff-bezos-amazon"><em>Washington Post</em></a> for $250 million, roughly 1% of his wealth at the time, $22 billion. (He’s now up to $106 billion.)</p>
<p>Last year, Amazon raised many eyebrows by crossing into physical distribution territory with the <a href="https://theconversation.com/with-its-purchase-of-whole-foods-is-amazons-goal-to-revolutionise-food-distribution-93161">acquisition of Whole Foods Market</a> and its 473 stores in North America and the United Kingdom. This move made the shares of Walmart and other supermarket chains plummet, while raising Amazon’s own stock valuation by $15.6 billion. After the announcement of the deal, the rise in Amazon share prices alone was enough to cover the $13.7 billion cost of acquiring Whole Foods.</p>
<p>More recently, Amazon announced that it would partner with other giants like Berkshire Hathaway and JPMorgan to implement a <a href="http://money.cnn.com/2018/02/27/news/companies/amazon-health-care/index.html">health care solution for their combined 840,000 employees</a>. Is that the first stage of a road-map to offer health insurance worldwide? Finally, a few weeks ago, we learned that Amazon is in talks with large banks such as JPMorgan Chase to create a checking-account-like service.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/212614/original/file-20180329-189795-2t80s7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/212614/original/file-20180329-189795-2t80s7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=316&fit=crop&dpr=1 600w, https://images.theconversation.com/files/212614/original/file-20180329-189795-2t80s7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=316&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/212614/original/file-20180329-189795-2t80s7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=316&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/212614/original/file-20180329-189795-2t80s7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=397&fit=crop&dpr=1 754w, https://images.theconversation.com/files/212614/original/file-20180329-189795-2t80s7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=397&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/212614/original/file-20180329-189795-2t80s7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=397&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The 10,000 year clock being built by Jeff Bezos inside a mountain in Texas.</span>
</figcaption>
</figure>
<h2>How big is too big?</h2>
<p>As Amazon competes with Apple for the record of becoming the <a href="https://www.investors.com/news/technology/amazon-may-beat-apple-on-path-to-reaching-1-trillion-in-value/">first company in history to be valued at $1 trillion</a>, several experts start to question when antitrust regulation should step in to stop its relentless growth. In a brilliant research note published in the <em>Yale Law Journal</em>, Lina M. Khan argues that current US antitrust laws based on the principle of “consumer welfare” are ill-prepared to deal with what she calls the Amazon paradox: contrary to what antitrust theory predicts, Amazon does not raise its prices in spite of its growing dominance. She cites two reasons for the rationality of everlasting predatory pricing by online e-commerce platforms:</p>
<ul>
<li><p>Pursuing growth over profits has been historically rewarded by investors, who clearly believe in Bezos’ long-term vision.</p></li>
<li><p>Thanks to their dominant size and investor’s faith, Amazon can integrate across distinct business lines (retailer, marketplace, cloud service provider) to create the very infrastructure upon which its rivals came to depend. If, for instance, Amazon notices through its powerful data analytics that one new product category is growing, it can launch its own brand of the same product and rank it higher in its search results, effectively driving traffic and sales away from the newcomers.</p></li>
</ul>
<p>Yet whenever claims of monopolistic practices are levered against it, Amazon quickly points out that <a href="https://www.entrepreneur.com/article/306678">e-commerce represents less than 10% of brick-and-mortar sales</a>. Furthermore, it claims that Walmart sales alone – over $500 billion in 2017 – are almost three times bigger than Amazon’s. Add to this the fact that prices are kept low at Amazon and you can dismiss any charge of Amazon abusing its dominant position.</p>
<p>These arguments miss the main point raised by Khan in her “Amazon Paradox” note: Amazon should not be persecuted for antitrust based on consumer welfare criteria or overall retail market share dominance. Rather, more modern antitrust laws should focus on the methods online platforms the size of Amazon can use to inhibit competition. These methods include predatory pricing based on real-time analysis of marketplace competitors and vertical integration of logistics. Thanks to Amazon’s highly complementary business models, it has created a physical and online infrastructure empire that is quickly becoming the only competitive way to satisfy the growing need of <a href="https://theconversation.com/delivery-drones-swooping-down-to-prey-on-our-self-control-77994">instant gratification by online shoppers</a>. Lured by the lock-in mechanisms built into the “Prime” subscription services (which offers free next-day delivery and video streaming to subscribers), consumers cannot help but be ecstatic with this online shopping paradise. One quickly understands why Amazon Prime now captures 46% of online shoppers in the US and why the barriers to entry are becoming increasingly insurmountable to upstarts in this field.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/212615/original/file-20180329-189798-1vo6vvl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/212615/original/file-20180329-189798-1vo6vvl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/212615/original/file-20180329-189798-1vo6vvl.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/212615/original/file-20180329-189798-1vo6vvl.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/212615/original/file-20180329-189798-1vo6vvl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/212615/original/file-20180329-189798-1vo6vvl.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/212615/original/file-20180329-189798-1vo6vvl.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">An undercover investigation reveals difficult working conditions at Amazon.</span>
<span class="attribution"><span class="source">Sunday Mirror</span></span>
</figcaption>
</figure>
<h2>The price of instant gratification</h2>
<p>Amazon definitely takes its “customer-centric” culture seriously. Few consumers are left unmoved by the killer value proposition it offers: a convenient, fast and reliable way of buying almost anything online. While customers have somewhat fallen out love with other tech giants like Apple and Google – both of whom recently plunged from 2nd and 3rd places to 29th and 28th places in the <a href="https://theharrispoll.com/reputation-quotient/">annual “Reputation Quotient” list by the Harris Poll</a> – Amazon has remained the first brand in the preference of US consumers for the past five years (with exception of 2015).</p>
<p>Behind stage, this constant battle to keep customers happy does come at a cost to Amazon employees, though. Cases of burnout or exhaustion have been documented in Amazon’s fulfilling centres, with workers reportedly falling asleep standing up during 55-hour-a-week marathons ahead of big events like Christmas or Black Friday. Or consider the story of a young British man whose night shifts in an Amazon warehouse working alongside robots <a href="https://www.theguardian.com/money/2018/jan/20/amazon-worker-warehouse">almost destroyed his social life and his psychic health</a> – all for a princely salary of £18,000 ($25,262) a year.</p>
<p>With no visible sense of irony, Amazon has recently produced a “Prime Original” TV series called <a href="https://www.amazon.com/Philip-K-Dicks-Electric-Dreams/dp/B075NTXMN9"><em>Electric Dreams</em></a> that portrays dystopic techno-futures envisioned by Philip K. Dick. In the second episode, called <a href="https://www.thestranger.com/slog/2018/01/16/25716031/autofac-an-episode-from-new-amazon-series-electric-dreams-is-about-how-to-destroy-amazon">“Autofac”</a>, they describe a post-apocalyptic world in which the last survivors of the human race are besieged by robot-driven factories that ignore the end of the world and keep pumping out drone-delivered boxes of products no one needs.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/212832/original/file-20180402-189827-15fgofv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/212832/original/file-20180402-189827-15fgofv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=332&fit=crop&dpr=1 600w, https://images.theconversation.com/files/212832/original/file-20180402-189827-15fgofv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=332&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/212832/original/file-20180402-189827-15fgofv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=332&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/212832/original/file-20180402-189827-15fgofv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=418&fit=crop&dpr=1 754w, https://images.theconversation.com/files/212832/original/file-20180402-189827-15fgofv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=418&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/212832/original/file-20180402-189827-15fgofv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=418&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Amazon’s own vision of the future in their new TV series <em>Electric Dreams</em>: a post-apocalyptic world ruled by drones and robots.</span>
<span class="attribution"><span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>Antitrust laws need to evolve to catch up with 21st-century business practices in order to create a healthier competitive environment in the e-commerce sphere. This is no longer about saving the mom-and-pop stores in main street or keeping brick-and-mortar bookstores from disappearing: it is about making sure that future innovative players can thrive online without having to use the monopolistic infrastructure of Amazon or be confronted with their anti-competitive practices. Hopefully such measures will also limit the drive for lowering prices at all costs, with all the social and environmental consequences this race to the bottom entails.</p>
<p>In 1911, Rockefeller’s Standard Oil was broken up in 34 companies by the Sherman Antitrust act, separating them into distinctive activities of oil producing, transporting, refining and marketing. If “data is the new oil”, monopolistic data-driven platforms of today should maybe suffer the same fate in the name of competition, innovation and employee well-being.</p><img src="https://counter.theconversation.com/content/94147/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Marcos Lima ne travaille pas, ne conseille pas, ne possède pas de parts, ne reçoit pas de fonds d'une organisation qui pourrait tirer profit de cet article, et n'a déclaré aucune autre affiliation que son organisme de recherche.</span></em></p>How Jeff Bezos is plotting to take over the world – and why Amazon’s dominance in e-commerce could be a threat to innovation.Marcos Lima, Head of the Marketing Innovation and Distribution Program at EMLV, Pôle Léonard de VinciLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/931612018-03-21T20:39:51Z2018-03-21T20:39:51ZWith its purchase of Whole Foods, is Amazon’s goal to revolutionise food distribution?<figure><img src="https://images.theconversation.com/files/209713/original/file-20180309-30972-18n6ef1.jpg?ixlib=rb-1.1.0&rect=0%2C191%2C2000%2C1035&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Fruit and vegetables department at Whole Foods Market.</span> <span class="attribution"><a class="source" href="https://www.Flickr.com/photos/herry/929878550/in/photolist-oAMbXh-oCMkr5-omk3K2-oAMcuE-gMqXY1-cyG1q9-2q6nZV-2qaSuN-SNZLPW-5Mnk41-SSzN7P-RKesG2-RCJ8d8-RA6Cky-is6Y5-84EKvo-RSwwns-UXnbi7-vFnjU9-vFnma5-eguafc-fwDVTU-Ed22H-2jdi3J-ppPDVo-a6rxHV-72HfqR-9RFUDL-AxHo3-cbBTe9-ShK9UG-a8ZtUa-9RFUtJ-ShPtHq-cUchaS-84BEHD-RMTQFK-SSEfNX-atMLeP-gCWxZy-gCWsAC-QGhUPL-9RFUv7-5MnibA-2C78N1-2nEkS-84BD5D-8EVRmL-3Va8EA-kCC8vX/">Herry Lawford/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p>On March 20, 2018, Amazon became the second most valuable company in the world, with a market capitalization exceeding $768 billion. The US retailing giant made key investments in 2017, including an offer to buy the Whole Foods Market organic grocery chain at $42 per share, or a total of <a href="http://bit.ly/2sSHihO">$13.7 billion</a>. Amazon has gained almost $19 billion in market capitalization shortly after the announcement, and the acquisition was finalized in August 2017. So what are the motivations behind this acquisition? Who will be the winners and losers?</p>
<h2>Amazon continues its foray into the food industry</h2>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/175571/original/file-20170626-32766-n239qi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/175571/original/file-20170626-32766-n239qi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/175571/original/file-20170626-32766-n239qi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/175571/original/file-20170626-32766-n239qi.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/175571/original/file-20170626-32766-n239qi.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/175571/original/file-20170626-32766-n239qi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/175571/original/file-20170626-32766-n239qi.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/175571/original/file-20170626-32766-n239qi.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">At the Amazon headquarters in South Lake Union, Seattle.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/cheukiecfu/5252226771/">Cheuk-man Kong/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-sa/4.0/">CC BY-NC-SA</a></span>
</figcaption>
</figure>
<p>The second “A” in the acronym of US web giants, GAFAM (Google, Apple, Facebook, Amazon, Microsoft), Amazon realized $178 billion in sales <a href="http://services.corporate-ir.net/SEC.Enhanced/SecCapsule.aspx?c=97664&fid=15414896">at the end of 2017</a> versus $136 billion <a href="http://www.annualreports.com/HostedData/AnnualReports/PDF/Nasdaq_AMZN_2016.pdf">at the end of December 2016</a>. The company employs 341,400 people and has built its reputation on the distribution of music, books and cultural content. The online retailer makes every effort to optimise its selection of items, their prices and the speed of delivery, including its well-known “Prime” service, and is exploring the possibility of <a href="http://money.cnn.com/2017/06/23/technology/amazon-drone-beehives/index.html">delivery by drone</a>.</p>
<p>The company made his first steps into the food industry in 2008 with the launch of AmazonFresh in the United States. For a monthly fee, customers can order fruit or vegetables online for home delivery. The service was subsequently expanded to London and Boston in 2016, and Tokyo, Berlin, Potsdam and Denver in 2017. Amazon clearly wants to expand its presence in food distribution, a market valued at <a href="http://fortune.com/2017/06/22/amazon-buying-whole-foods-disruption/">$800 billion</a> according to <em>Fortune</em>.</p>
<p>As the online demand for food has yet to be a big success, Amazon has turned toward a multi-channel offering, expanding from e-commerce to investing in brick-and-mortar stores. A particularly innovative example is AmazonGo. Using artificial intelligence and <a href="http://www.centrenational-rfid.com/definition-de-la-rfid-article-71-fr-ruid-17.html">RFID</a> – what Amazon has dubbed the “just walk out technology” – customers with the AmazonGo application simply enter one of the stores store and select the items they wish to buy. Every time a product is taken, it’s automatically added to the customer’s personal Amazon account – no more need to wait in line or go through a physical checkout.</p>
<p>The first AmazonGo store opened in Seattle in January 2018, and if the initiative proves successful, Amazon plans to open 2,000 in the United States and then Australia. A revolutionary new way of shopping? Certainly, but it also raises questions. What would happen to cashiers’ jobs were this system were widespread? Technical snags have also slowed Amazon down, as revealed in a <em>Fortune</em> article, <a href="http://fortune.com/2017/03/28/amazon-go-cashier-free-store/">“Amazon’s Cashier-Free Store Might Be Easy to Break”</a> – the technology is not currently sophisticated enough to manage more than 20 customers at a time. So this may be one of the reasons why Amazon is stepping up its multichannel offering by turning to Whole Foods.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/175572/original/file-20170626-309-34l090.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/175572/original/file-20170626-309-34l090.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/175572/original/file-20170626-309-34l090.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/175572/original/file-20170626-309-34l090.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/175572/original/file-20170626-309-34l090.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/175572/original/file-20170626-309-34l090.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/175572/original/file-20170626-309-34l090.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/175572/original/file-20170626-309-34l090.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Whole Foods Market in West Hartford, Connecticut.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/jeepersmedia/14833428466/in/photolist-oAMbXh-oCMkr5-omk3K2-oAMcuE-gMqXY1-cyG1q9-2q6nZV-2qaSuN-SNZLPW-5Mnk41-SSzN7P-RKesG2-RCJ8d8-RA6Cky-is6Y5-84EKvo-RSwwns-UXnbi7-vFnjU9-vFnma5-eguafc-fwDVTU-Ed22H-2jdi3J-ppPDVo-a6rxHV-72HfqR-9RFUDL-AxHo3-cbBTe9-ShK9UG-a8ZtUa-9RFUtJ-ShPtHq-cUchaS-84BEHD-RMTQFK-SSEfNX-atMLeP-gCWxZy-gCWsAC-QGhUPL-9RFUv7-5MnibA-2C78N1-2nEkS-84BD5D-8EVRmL-3Va8EA-kCC8vX/">Mike Mozart/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<h2>What is Whole Foods Market?</h2>
<p>A leader in the distribution of natural and organic food products in the United States, Whole Foods Market is the first US-certified organic distributor. The group generated revenues of $15.7 billion at the end of September 2016, $1 billion in operating cash and had a <a href="http://bit.ly/2u7uLqp">return on invested capital of 12.7%</a>.</p>
<p>Founded in 1978, the first Whole Foods Market store opened in 1980 in Austin, Texas. At the end of September 2016 the chain had 456 stores – 436 in the United States, 11 in Canada and 9 in the United Kingdom – and employs 87,000 people. Whole Foods pays particular attention to the source and quality of its products (natural and organic), its staff and is involved in the local community.</p>
<p>In fiscal year 2016, Whole Foods Market launched a store format called 365. With the goal of offering the best value for money through carefully selected products. The 365 stores have a simplified operational model, with central purchases and automatic inventory replenishments.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/175596/original/file-20170626-32751-fhksbj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/175596/original/file-20170626-32751-fhksbj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/175596/original/file-20170626-32751-fhksbj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/175596/original/file-20170626-32751-fhksbj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/175596/original/file-20170626-32751-fhksbj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/175596/original/file-20170626-32751-fhksbj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/175596/original/file-20170626-32751-fhksbj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/175596/original/file-20170626-32751-fhksbj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Cereal aisle at a Whole Foods Market.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/gotovan/26214281090/in/album-72157663191979302/">GoToVan/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<h2>Why did Amazon buy Whole Foods market?</h2>
<p>The acquisition of Whole Foods by Amazon makes it possible to combine two leading brands, both focused on a customer-centred approach. Partnering with Whole Foods will allow Amazon to expand its multichannel offering and further enhance the customer experience. The potential for development is enormous because Whole Foods Market is mainly present in the United States today, but the concept could be extended to other countries. Lastly, Amazon is now confronted with the challenge of seasonality: 33% of annual sales are made in the fourth quarter of the calendar year. Diversification into food would help to smooth out its cash flows.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/175599/original/file-20170626-304-ibqoop.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/175599/original/file-20170626-304-ibqoop.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/175599/original/file-20170626-304-ibqoop.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=372&fit=crop&dpr=1 600w, https://images.theconversation.com/files/175599/original/file-20170626-304-ibqoop.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=372&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/175599/original/file-20170626-304-ibqoop.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=372&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/175599/original/file-20170626-304-ibqoop.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=468&fit=crop&dpr=1 754w, https://images.theconversation.com/files/175599/original/file-20170626-304-ibqoop.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=468&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/175599/original/file-20170626-304-ibqoop.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=468&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Fall specials at a store in Washington, D.C.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/perspective/15551992422/in/photolist-pGh2wo-Dwfhew-fUe4BF-ndqr3H-ay3Hqk-rhV9Eu-ShUomy-75qwdj-a6rxHV-uXFeTi-6vD8Vp-fviFmy-pG9eii-gCWFan-fv4nnF-duXApb-RW9gh6-fv4nTc-pGcGEr-AxHo3-b6p5vT-fv4nAv-8xeMW-ndr2d5-duXABL-gCWDcp-9RFUA1-jkjdyg-8kjSKr-8HMUDE-ocYkV7-9NELeJ-duRo9P-ixj2HW-nbo2JA-b6p5tD-b6p5Bp-9RFUCC-jR9gc-duSuQc-ppHe9F-oKqwTV-t8fM4K-a6rxLg-ndqyvP-7Edzt-QJQ5uH-SCTkCm-6Bp8Pg-fviFiY">Elvert Barnes/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>Nonetheless, the acquisition raises some important questions. The first is employment, because Whole Foods places considerable importance on its employees. It has been considered one of the top 100 US companies to work for 20 years, according to <em>Fortune</em> magazine. As at September 25, 2016, Whole Foods Market has approximately $3.5 billion in fixed assets (stores, leasehold improvements, etc.) on the balance sheet and $1 billion in long-term leases for some other stores. In the foreseeable future, will Amazon keep all the Whole Foods brick-and-mortar stores, and all the employees who work there?</p>
<p>The second question concerns the pricing policy and the possible divergences between Amazon and Whole Foods. The organic chain adopts rather high prices – generally 10% to 30% more than its direct competitors – and has sometimes been criticized on this aspect. It is one of the reasons why the group has launched the 365 stores. Amazon, on the other hand, is anxious to offer competitive prices. Will Amazon offer products with higher prices or will Whole Foods reduce its prices?</p>
<p>The third question concerns the digital investments Whole Foods Market has already made and is continuing, for example, with the introduction of <a href="http://www.businessnewsdaily.com/7859-emv-technology-small-businesses.html">EMV</a> (Europay, MasterCard and Visa) technology at the point of sale and the distribution of digital discount coupons.</p>
<p>Finally, what will happen to the partnership that Whole Foods Market has formed with <a href="https://www.bloomberg.com/news/articles/2016-09-23/whole-foods-invests-in-instacart-at-2014-valuation">Instacart</a>, the start-up created in 2012 (by a former employee of Amazon), which manages the deliveries of Whole Foods Market and in which Whole Foods has also taken a financial stake?</p>
<h2>Who are the winners and the losers?</h2>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/175602/original/file-20170626-315-h3j52g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/175602/original/file-20170626-315-h3j52g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/175602/original/file-20170626-315-h3j52g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/175602/original/file-20170626-315-h3j52g.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/175602/original/file-20170626-315-h3j52g.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/175602/original/file-20170626-315-h3j52g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/175602/original/file-20170626-315-h3j52g.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/175602/original/file-20170626-315-h3j52g.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Amazon headquarters in Seattle, Washington.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/kiewic/30676339365/in/photolist-NJLfWR-UhFyXV-A8zQK-4sdTYD-aYVgYr-UBX7di-5sgQLy-aSUHK4-qk1KCP-o64eZo-o7WpHK-8y3jL7-K6xvN4-reu1ZC-9Xni9-K6xvHe-9Xnjp-8Wmvss-qZfR6d-qZmPSD-9XngJ-rgMfSF-nNELEk-rgHUC5-rdvkiW-rgMpdi-nmE1x6-rgHThu-9Xneo-UhFwTz-rgHLpm-qZfFDs-qZmLNx-qjNHhS-2Xopq5-o47L7C-2XiYk8-2XiYDZ-qZfWoN-rgFdTZ-rgHX7U-nB6MGj-rgF1GV-qjNGSU-qk1Tev-qk1Kb6-qZmAUe-qZmTgx-qjNBAG-qZmNBn">Kiewic/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>The big winner is of course Amazon. The Seattle group should not have difficulty absorbing Whole Foods, whose purchase price seems fairly reasonable in terms of its turnover: almost $16 billion at the end of September 2016. The group expects its sales to grow by 2.5% to 4.5% in 2017, with operating profit representing 8% of sales while maintaining a <a href="http://s21.q4cdn.com/118642233/files/doc_financials/2016/Annual/2016-WFM-Annual-Report.pdf">return on investment</a> target of at least 11%.</p>
<p>Conversely, the main players in distribution seem less solid. Even Walmart, the world’s largest distributor with nearly $486 billion in sales, saw its market capitalization fall by $12.8 billion, a 5.4% drop between the June 15, 2017 ($237.8 billion) and June 23, 2017 ($225 billion).</p>
<p>According to <a href="http://fortune.com/2017/06/22/amazon-buying-whole-foods-disruption/"><em>Fortune</em></a>, within 24 hours of the initial announcement, shares in Walmart dropped 4.7%, Target 5.1% and Kroger 9.2%, while Amazon increased by 2.4%. It remains to be seen whether this drop is only momentary. As indicated by CNBC in the article <a href="https://www.cnbc.com/2017/06/21/dont-worry-wal-mart-amazon-buying-whole-foods-is-just-a-drop-in-the-bucket.html">“No worries for Wal-Mart, Amazon buying Whole Foods is only a drop in the bucket”</a>, this seems probable given the high share of the market held by Wal-Mart:</p>
<blockquote>
<p>“Wal-Mart controls the largest share of the US food market with about 14.5% of total sales and Whole Foods Market and Amazon will stay smaller with Whole Foods controlling 1.2 % of market share and Amazon 0.2% of market share in food.”</p>
</blockquote>
<h2>A changing market</h2>
<p>In any case, this reinforcement of Amazon in food will only accentuate trends already noticed at the level of consumers who leave the hypermarkets for local businesses and increase their online purchases.</p>
<p>In the United Kingdom, Tesco, the UK’s largest distributor and private employer, is still struggling to regain its customers. The latter now focus on convenience stores with smaller daily baskets and supplement them with online purchases. This trend is not new, as at the end of February 2015, combined with a hard-fought price struggle by the “hard discounters” Aldi, Asda and Lidl, Tesco had published a historic loss of 5.7 billion pounds (almost 7 billion euros). J. Sainsbury and Marks & Spencer also suffer from the same pressures and their financial results have been disappointing. Tesco posted a loss of 40 million pounds at the end of February 2017, but its turnover has fallen by 9.75% since February 2015.</p>
<p>In France, customers are also abandoning “hypermarkets”. French retailers like Auchan, Leclerc, Carrefour and Monoprix are adapting their product offerings and changing the formats of their stores to deal with profound changes in consumption patterns. Changes very well described in the video above with the phenomenon of <em>slow life</em> : consume less, but better.</p>
<p>Beyond the efforts already made by these French retailers, they will have to further strengthen their online presence and invest heavily in high-performance information systems and data analytics. A trend probably anticipated by Carrefour with the appointment of Alexandre Bompard, who had successfully led the digital shift of Fnac.com to become the third largest French e-commerce retailer behind Amazon and Cdiscount.</p>
<p>On January 23, 2018 Carrefour unveiled its <a href="https://www.businesswire.com/news/home/20180122006748/en/%22Carrefour-2022%22-New-Ambition-Group">transformation plan for 2022</a>. In addition to a voluntary departure plan of 2,400 people for France, it announced massive investments in digital of 2.8 billion euros by 2022, a target of 5 billion euros in sales in food e-commerce by 2022 as well as a target of 5 billion euros in organic sales in 2022 (from 1.3 billion euros currently).</p>
<h2>Amazon’s strategy in food</h2>
<p>Amazon has already revolutionized the distribution of music and books – will it also revolutionize food distribution? The group has efficient logistics platforms and has invested heavily in its information systems and merchant sites since 2012. It is also continuing the development of the “just walk out technology” of AmazonGo stores.</p>
<p>The acquisition of Whole Foods is thus not good news for large distributors. The US giants have all seen their market capitalization falling in recent days. European distributors are also concerned by these new modes of online consumption and the need for a multi-channel offering. In France, major distributors are lagging behind in e-commerce and the arrival of Amazon as a new competitor as well as that of Costco on the French market since June 22, 2017 only make the challenges even more important. The food distribution industry is a low-margin industry and therefore the search for efficiency and economies of scale are key elements.</p>
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<a href="https://images.theconversation.com/files/175610/original/file-20170626-321-qiemd1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/175610/original/file-20170626-321-qiemd1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/175610/original/file-20170626-321-qiemd1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/175610/original/file-20170626-321-qiemd1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/175610/original/file-20170626-321-qiemd1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/175610/original/file-20170626-321-qiemd1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/175610/original/file-20170626-321-qiemd1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/175610/original/file-20170626-321-qiemd1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Vegetable section in a Whole Foods Market in London.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/bellissima_italia/4635406031/in/photolist-84BEHD-84BD5D-84EH3d-84EGgL-6L793u-84BCkt-84EM1y-84BzWa-2qb48G-9ajjwJ-GK3LKf-6L2Ypi-2jdi3J-FRKmys-gMqXY1-cyG1q9-7Q635y-dZ6PwL-SNZLPW-FRKo3Q-8DonmZ-937Se9-UXnbi7-2q6nZV-SSzN7P-RKesG2-vFnjU9-oAMbXh-6L78QY-vFnma5-6u1pyb-9mbrQ6-aqUZEP-aqUZMi-aqUZ9v-aqUZgT-aqUYBk-aqUZqX-aqUYJ6-aqUYvM-2qaSuN-7X6vLf-is6Y5-oCMkr5-RCJ8d8-RA6Cky-omk3K2-RSwwns-GMfgm8-fwDVTU">Yvon/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
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<p>Even though today many consumers are still in the store to choose their fruits and vegetables (and especially in France), these habits may well change in the next 25 years. Amazon, which has often been a trendsetter, will only facilitate the use of e-commerce and may well have a significant impact on food distribution if it does not change.</p>
<p>Amazon is becoming so big and financially powerful that it can afford price cuts, a model that may not be sustainable for other food retailers. After including Whole Foods Market aggregate net sales of $5.8 billion since the acquisition in August 2017, Amazon reported record results for 2017 with net sales amounting to $177.9 billion (up 30,8%) and a net profit reaching $3 billion. The American giant is even targeting the French market. Reuters announced on February 28 that French retailer Systeme U is discussing a <a href="https://uk.reuters.com/article/us-france-amazon/french-retailer-systeme-u-discussing-supply-deal-with-amazon-idUKKCN1GC1HN">possible grocery-supply deal with Amazon</a>.</p>
<p>With almost $31 billion in cash and cash equivalents and marketable securities, Amazon has the ability to perform more acquisitions in the future and benefits from a strong bargaining power. It seems that Amazon is indeed aiming at becoming a key player in the food distribution at a worldwide level.</p><img src="https://counter.theconversation.com/content/93161/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Isabelle Chaboud ne travaille pas, ne conseille pas, ne possède pas de parts, ne reçoit pas de fonds d'une organisation qui pourrait tirer profit de cet article, et n'a déclaré aucune autre affiliation que son organisme de recherche.</span></em></p>In 2017 the US retail giant Amazon spent nearly $14 billion to acquire the Whole Foods Market grocery chain. What are the motivations behind this acquisition and who will be the winners and losers?Isabelle Chaboud, Professeur associé d’analyse financière, d’audit et de risk management, Grenoble École de Management (GEM)Licensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/921762018-03-12T19:06:35Z2018-03-12T19:06:35ZShould I let my kids drink juice? We asked five experts<figure><img src="https://images.theconversation.com/files/207255/original/file-20180221-132654-odk06s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Mmmmm sugary. </span> <span class="attribution"><span class="source">from www.shutterstock.com</span></span></figcaption></figure><p>Most parents will tell you their kids love juice. It tastes good, often comes in convenient and child-friendly packaging, and seems much healthier than soft drinks, sports drinks or other sweet beverages. It comes from fruit, after all. But we also know it’s high in sugar, and so can contribute to obesity and dental problems. </p>
<p>We asked five experts in nutrition, dietetics, medicine and dentistry whether or not we should let our kids drink juice:</p>
<h2>Four out of five experts said no</h2>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/207731/original/file-20180223-108146-12xme3l.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/207731/original/file-20180223-108146-12xme3l.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=99&fit=crop&dpr=1 600w, https://images.theconversation.com/files/207731/original/file-20180223-108146-12xme3l.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=99&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/207731/original/file-20180223-108146-12xme3l.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=99&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/207731/original/file-20180223-108146-12xme3l.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=125&fit=crop&dpr=1 754w, https://images.theconversation.com/files/207731/original/file-20180223-108146-12xme3l.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=125&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/207731/original/file-20180223-108146-12xme3l.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=125&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<p><strong><em>Here are their detailed responses</em></strong>:</p>
<p><iframe id="tc-infographic-241" class="tc-infographic" height="400px" src="https://cdn.theconversation.com/infographics/241/3451d0b6e6804f6587ff9384c325449191584bb7/site/index.html" width="100%" style="border: none" frameborder="0"></iframe></p>
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<p><em>If you have a health question you’d like posed to Five Experts, email your suggestion to: alexandra.hansen@theconversation.edu.au</em></p>
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<p><em><strong>Disclosures</strong>:</em></p>
<p><em>Rebecca Charlotte Reynolds owns The Real Bok Choy, a nutrition and lifestyle consultancy.</em></p>
<p><em>Clare Collins is affiliated with the Priority Research Centre for Physical Activity and Nutrition, the University of Newcastle, NSW. She is an NHMRC Senior Research and Gladys M Brawn Research Fellow. She has received research grants from NHMRC, ARC, Hunter Medical Research Institute, Meat and Livestock Australia, Diabetes Australia, Heart Foundation, Bill and Melinda Gates Foundation, nib foundation. She has consulted to SHINE Australia, Novo Nordisk, Quality Bakers and the Sax Institute. She was a team member conducting systematic reviews to inform the Australian Dietary Guidelines update and 2017 evidence review on dietary patterns for the Heart Foundation.</em></p>
<p><em>Dr Alessandro Demaio works for the World Health Organisation in Geneva. The views, opinions and positions expressed in this article are the author’s own and do not reflect the views of any third party.</em></p><img src="https://counter.theconversation.com/content/92176/count.gif" alt="The Conversation" width="1" height="1" />
Most parents will tell you their kids love juice. It tastes good and often comes in convenient and child-friendly packaging. Is the occasional juice OK?Alexandra Hansen, Deputy Editor and Chief of Staff, The Conversation AUNZLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/879542018-01-11T12:16:10Z2018-01-11T12:16:10ZWhat supplements do scientists use, and why?<figure><img src="https://images.theconversation.com/files/200526/original/file-20180102-26139-g5uyja.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/download/confirm/586345679?src=EreHScEMckLIca_2KH3b_A-1-0&size=medium_jpg">RobsPhoto/Shutterstock</a></span></figcaption></figure><p>Supplements are a <a href="https://www.statista.com/statistics/521746/market-size-vitamins-minerals-and-supplements-worldwide-category/">multi-billion dollar industry</a>. But, unlike pharmaceutical companies, manufacturers of these products don’t have to prove that their products are effective, <a href="https://www.fda.gov/Food/DietarySupplements/UsingDietarySupplements/ucm109760.htm">only that they are safe</a> – and that’s for new supplements only. </p>
<p>We wanted to know which supplements are worth our attention (and money) so we asked six scientists – experts in everything from public health to exercise physiology – to name a supplement they take each day and why they take it. Here is what they said.</p>
<h2>Turmeric</h2>
<p><em>Simon Bishop, lecturer in public health and primary care, Bangor University</em></p>
<p>Turmeric is more familiar as an ingredient in South Asian cooking, adding an earthy warmth and fragrance to curried dishes, but, in recent years, it has also garnered attention for its potential health benefits. I have been taking ground turmeric root as a dietary supplement for around two years, but I have been interested in its use in Ayurvedic medicine for far longer. </p>
<p>Turmeric is used as a traditional remedy in many parts of Asia to <a href="http://www.ncbi.nlm.nih.gov/books/NBK92752/">reduce inflammation and help wounds heal</a>. Now, mounting evidence suggests that curcumin, a substance in turmeric, may also help to protect against a range of diseases, including <a href="http://www.ncbi.nlm.nih.gov/pmc/articles/PMC5506636/">rheumatoid arthritis, cardiovascular disease, dementia and some cancers</a>.</p>
<p>The evidence underpinning these claims of health-giving properties is not conclusive, but it is compelling enough for me to continue to take turmeric each morning, along with my first cup of coffee – another habit that may help me <a href="http://annals.org/aim/article-abstract/2643435/coffee-drinking-mortality-10-european-countries-multinational-cohort-study">live a bit longer</a>.</p>
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<span class="caption">Turmeric may protect against arthritis, heart disease and some cancers.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/download/confirm/751324675?src=rMcdCgbqcs5itMRErUmmeA-1-4&size=medium_jpg">Trum Ronnarong/Shutterstock.com</a></span>
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<h2>Vitamin D</h2>
<p><em>Graeme Close, professor of human physiology, Liverpool John Moores University</em></p>
<p>Vitamin D is a peculiar vitamin in that it is synthesised in our bodies with the aid of sunlight, so people who live in cold countries, or who spend a lot of time indoors, are at risk of a deficiency. People with <a href="http://ajcn.nutrition.org/content/79/3/362.long">darker skin tone</a> are also more at risk of vitamin D deficiency as melanin slows down skin production of vitamin D. It is estimated that about <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4143492/">a billion people</a> are deficient in the vitamin. </p>
<p>Most people are aware that we need enough vitamin D to maintain healthy bones, but, over the past few years, scientists have become increasingly aware of other important roles of vitamin D. We now believe vitamin D deficiencies can result in a <a href="https://www.ncbi.nlm.nih.gov/pubmed/26853300">less efficient immune system</a>, <a href="https://www.ncbi.nlm.nih.gov/pubmed/26506852">impaired muscle function and regeneration</a>, and even <a href="https://www.ncbi.nlm.nih.gov/pubmed/23377209">depression</a>. </p>
<p>Vitamin D is one of the cheapest supplements and is a really simple deficiency to correct. I used to test myself for deficiencies, but now – because I live in the UK where sunlight is scarce between October and April, and it doesn’t contain enough UVB radiation during these cold months – I supplement with a dose of 50 micrograms, daily, throughout the winter. I also advise the elite athletes that I provide nutrition support to, to do the same. </p>
<h2>Probiotic</h2>
<p><em>Justin Roberts, senior lecturer in sport and exercise nutrition, Anglia Ruskin University</em></p>
<p>Having diverse beneficial gut bacteria is important for your physical and mental health. However, the balance of bacterial species can be <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4303825/">disrupted by poor diet</a>, <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4757670/">being physically inactive</a> and <a href="http://jpp.krakow.pl/journal/archive/12_11/pdf/591_12_11_article.pdf">being under constant stress</a>. One way to support the health of the gut is to consume dietary probiotics (live bacteria and yeasts), such as yogurt, <a href="https://theconversation.com/do-humans-need-dairy-heres-the-science-70434">kefir</a> and kombucha. </p>
<p>I first came across probiotics after years of triathlon training, often experiencing gastrointestinal symptoms – such as nausea and stomach cramps – after training and races. I was also more susceptible to colds. After researching the area, I was surprised at how many people experience similar <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4008808/">gastrointestinal problems after exercise</a>. Now I have found that taking a probiotic regularly lessens my symptoms after training and benefits my general health. </p>
<p>A <a href="https://www.ncbi.nlm.nih.gov/pubmed/27869661">recent study</a> we conducted showed that taking a probiotic in the evening with food, over 12 weeks of exercise training, reduced gastrointestinal problems in novice triathletes. </p>
<p>There is also a wealth of research supporting the use of probiotics for general health benefits, including <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4045285/">improving intestinal health, enhancing the immune response and reducing serum cholesterol</a>.</p>
<h2>Prebiotic</h2>
<p><em>Neil Williams, lecturer in exercise physiology and nutrition, Nottingham Trent University</em></p>
<p>Prebiotics are non-digestible carbohydrates that act as a “fertiliser” to increase the growth and activity of beneficial bacteria in the gut. This is turn can have positive effects on <a href="https://www.ncbi.nlm.nih.gov/pubmed/18814803">inflammation and immune function</a>, <a href="https://www.ncbi.nlm.nih.gov/pubmed/23303873">metabolic syndrome</a>, increase <a href="https://www.ncbi.nlm.nih.gov/pubmed/23507173">mineral absorption</a>, reduce <a href="https://www.ncbi.nlm.nih.gov/pubmed/19756029">traveller’s diarrhoea</a> and improve <a href="https://www.ncbi.nlm.nih.gov/pubmed/21892075">gut health</a>. </p>
<p>I first came across prebiotics in my research to target the gut microbiota in athletes suffering from exercise-induced asthma. Previous research had shown asthma patients to have <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4739579/">altered gut microbiota</a>, and feeding prebiotics to mice had been shown to <a href="https://www.ncbi.nlm.nih.gov/m/pubmed/26003185/">improve their allergic asthma</a>. Taking this as our launching point, we showed that taking prebiotics for three weeks could reduce the severity of exercise-induced asthma in adults <a href="https://www.ncbi.nlm.nih.gov/pubmed/27523186">by 40%</a>. Participants in our study also noted improvements in eczema and allergic symptoms. </p>
<p>I add prebiotic powder to my coffee every morning. I have found that it reduces my hayfever symptoms in the summer and my likelihood of getting colds in the winter. </p>
<h2>Omega 3</h2>
<p><em>Haleh Moravej, senior lecturer in nutritional sciences, Manchester Metropolitan University</em></p>
<p>I started taking omega 3 after attending a Nutrition Society winter conference in 2016. The scientific evidence that omega 3 could improve my <a href="http://www.mdpi.com/journal/jcm/special_issues/omega-3-fatty-acids">brain function</a>, <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2798585/">prevent mood disorders</a> and help to prevent <a href="http://www.fasebj.org/content/31/1/282">Alzheimer’s disease</a> was overwhelming. After analysing my diet it was obvious that I wasn’t getting enough omega 3 fatty acids. A healthy adult should get a minimum of <a href="http://www.who.int/nutrition/topics/FFA_summary_rec_conclusion.pdf?ua=1">250-500mg</a>, daily. </p>
<p>Omega 3 is a form of fatty acid. It comes in many forms, two of which are very important for brain development and mental health: EPA and DHA. These types are primarily found in fish. Another type of omega 3 – ALA (alpha-linolenic acid) – is found in plant-based foods, such as nuts and seeds, including walnuts and flax seeds. Due to my busy schedule as a lecturer, during term time my diet is not as varied and enriched with omega 3 fatty acids as I would like, forcing me to choose a supplement. I take one 1,200mg capsule, daily.</p>
<h2>Nothing but real food</h2>
<p><em>Tim Spector, professor of genetic epidemiology, King’s College London</em></p>
<p>I used to take supplements, but six years ago I changed my mind. After researching <a href="https://www.orionbooks.co.uk/books/detail.page?isbn=9781780229003">my book</a> I realised that the clinical studies, when properly carried out and independent of the manufacturers, clearly showed they didn’t work, and in many cases could be harmful. Studies of multivitamins show regular users are more likely to <a href="http://annals.org/aim/fullarticle/1789253/enough-enough-stop-wasting-money-vitamin-mineral-supplements">die of cancer or heart disease</a>, for example. The <a href="https://www.ncbi.nlm.nih.gov/pubmed/28756618link">only exception</a> is supplements for preventing blindness due to macular degeneration, where randomised trials have been generally positive for a minor effect with a mixture of antioxidants. </p>
<figure class="align-center ">
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<span class="caption">Why take supplements when you can get all you need from a healthy diet?</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/download/confirm/594621377?src=bGprpByhWOJskTP1K_QbsQ-1-4&size=medium_jpg">margouillat photo/Shutterstock.com</a></span>
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<p>In many cases, there is some experimental evidence these chemicals in supplements work naturally in the body or as foods, but no good evidence that when given in concentrated form as tablets they have any benefit. Recent evidence shows that high doses of some supplements can even be harmful – a case in point being calcium and <a href="https://theconversation.com/the-sun-goes-down-on-vitamin-d-why-i-changed-my-mind-about-this-celebrated-supplement-52725">vitamin D</a>. Rather than taking expensive and ineffective synthetic products, we should get all the nutrients, microbes and vitamins we need from eating a range of real foods, as evolution and nature intended.</p><img src="https://counter.theconversation.com/content/87954/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Graeme Close consults to Gatorade Sport Science Institute (GSSI) and Healthspan Elite. He has received funding from The MRC, BBSRC, Aliment Nutrition, GSK and GSSI.</span></em></p><p class="fine-print"><em><span>Tim Spector receives funding from The MRC, Wellcome Trust, CDRF, NIHR, EU Horizon Grants, and is author of "The Diet Myth : the real science behind what we eat - Orion 2016" </span></em></p><p class="fine-print"><em><span>Haleh Moravej, Justin Roberts, Neil Williams, and Simon Bishop do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Six scientists on the supplements they take every day and why they take them.Simon Bishop, Lecturer in Public Health and Primary Care, Bangor UniversityGraeme Close, Professor of Human Physiology, Liverpool John Moores UniversityHaleh Moravej, Senior Lecturer in Nutritional Sciences, Manchester Metropolitan UniversityJustin Roberts, Senior Lecturer, Anglia Ruskin UniversityNeil Williams, Lecturer in Exercise Physiology and Nutrition, Nottingham Trent UniversityTim Spector, Professor of Genetic Epidemiology, King's College LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/886842017-12-20T11:27:32Z2017-12-20T11:27:32ZMore businesses are trying mobile apps to lure and keep consumers<figure><img src="https://images.theconversation.com/files/198611/original/file-20171211-27680-oj23he.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Using a store's mobile app can affect in-store purchases.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/young-beautiful-woman-using-mobile-store-498919009">Javier Arres/Shutterstock.com</a></span></figcaption></figure><p>Intense retail competition has led old standbys, such as <a href="https://www.cnbc.com/2017/08/24/here-are-the-28-stores-that-sears-is-closing-next.html">Sears</a>, to <a href="http://www.businessinsider.com/list-sears-kmart-store-closures-2017-11">close dozens of stores</a>. Walmart is <a href="https://news.walmart.com/2016/08/08/walmart-agrees-to-acquire-jetcom-one-of-the-fastest-growing-e-commerce-companies-in-the-us">venturing online more</a>. And Amazon is expanding offline, <a href="http://www.businessinsider.com/amazon-big-expansion-retail-pop-up-stores-2016-9">opening stores</a> and <a href="https://www.bloomberg.com/news/articles/2017-06-16/amazon-to-acquire-whole-foods-in-13-7-billion-bet-on-groceries">buying Whole Foods</a>. The fight for retail dollars is fierce, and the battleground will soon migrate into the palms of customers’ hands – via apps on their smartphones.</p>
<p>This isn’t just happening with mega-retailers. <a href="https://www.cinemark.com/cinemode">Movie</a> <a href="https://www.amctheatres.com/mobile/app">chains</a> and <a href="https://www.chewy.com/ci/lp/resp/chewy-app/chewy-app.html">pet supply stores</a> are increasingly connecting with their customers through their own branded apps. Zumiez, a specialty clothing chain with <a href="http://ir.zumiez.com/news-releases/news-release-details/zumiez-inc-announces-fiscal-2017-third-quarter-results">600 stores in the U.S.</a>, <a href="http://www.zumiez.com/the-stash/">has an app</a>. Scooter’s Coffee, an Omaha-based coffee chain with <a href="https://franchising.scooterscoffee.com/">200 stores</a>, <a href="https://www.scooterscoffee.com/MobileApp">has one too</a>. So does <a href="https://www.nypovt.com/">New York Pizza Oven</a>, a single pizza parlor in Vermont. </p>
<p>Mobile apps are becoming key ways for customers and retailers to interact. Our recent analysis of data from a large U.S. retailer of video games and electronics (whose name we agreed to keep confidential) found that <a href="http://www.msi.org/reports/the-effects-of-mobile-apps-on-shopper-purchases-and-product-returns/">apps can even affect consumers’ offline buying</a> habits.</p>
<h2>Growth in use – and spending</h2>
<p>The number of people who have the option to use mobile apps is skyrocketing. <a href="https://www.ericsson.com/en/press-releases/2015/6/ericsson-mobility-report-70-percent-of-worlds-population-using-smartphones-by-2020">More than 70 percent</a> of the world population will own a smartphone by 2020. And they’ll spend more than <a href="https://www.emarketer.com/Article/Smartphone-Apps-Crushing-Mobile-Web-Time/1014498">80 percent of their on-phone time</a> using task-specific apps.</p>
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<a href="https://images.theconversation.com/files/199060/original/file-20171213-27580-1w8e9rs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/199060/original/file-20171213-27580-1w8e9rs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/199060/original/file-20171213-27580-1w8e9rs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/199060/original/file-20171213-27580-1w8e9rs.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/199060/original/file-20171213-27580-1w8e9rs.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/199060/original/file-20171213-27580-1w8e9rs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/199060/original/file-20171213-27580-1w8e9rs.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/199060/original/file-20171213-27580-1w8e9rs.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Is there no line because people are ordering ahead on their mobile phones?</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/phoenix-april-19-starbucks-store-kiosk-675584989">jessicakirsh/Shutterstock.com</a></span>
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<p>Letting buyers learn about products, discover deals, locate nearby stores and even place orders in advance is a huge business opportunity. At Starbucks, for example, an app allowing people to order and pay on the go – just swinging into the store for pickup – helped customers avoid standing in line and waiting: <a href="https://www.forbes.com/sites/greatspeculations/2015/10/30/how-mobile-ordering-can-impact-starbucks-valuation/">Over five years, 20 percent of its sales</a> shifted to online transactions.</p>
<p>Research has also begun to show that people who use mobile shopping apps buy more than they might otherwise. After individual shoppers started purchasing using eBay’s mobile app, their <a href="https://doi.org/10.1257/aer.104.5.489">purchases from eBay’s website increased</a>. Similarly, a tablet app from major Chinese e-tailer Alibaba led customers to <a href="https://doi.org/10.1287/mnsc.2015.2406">spend about US$923.5 million more each year</a> with the company than they would have without the app. Some of that increased spending is from shoppers using the app to <a href="https://doi.org/10.1287/mnsc.2015.2406">buy impulsively</a> – making one-off purchases of items they are interested in, or adding items to larger orders.</p>
<p>Our research recently found a new dimension to this app-related spending boost. Over 18 months, customers who downloaded the branded app of the retailer we studied spent <a href="http://www.msi.org/reports/the-effects-of-mobile-apps-on-shopper-purchases-and-product-returns/">30 percent more in stores</a> than they would have without the app. We can infer this by looking at data on customers’ spending before and after the app was installed, and by <a href="https://press.princeton.edu/titles/8769.html">comparing that</a> to the spending of a random sample of customers who had similar demographics and shopping behavior before the app launched.</p>
<p>We learned that most of the increase was because customers used the app to find out about products before buying them. For example, by closely analyzing the data on app use and purchases, we could see these customers started increasing purchases of lesser known video games when they started using the app.</p>
<h2>App users return products more</h2>
<p>While shoppers who use a retailer’s mobile app tend to buy more online and in stores, we find that they are also <a href="http://www.msi.org/reports/the-effects-of-mobile-apps-on-shopper-purchases-and-product-returns/">more prone to subsequently returning</a> the products they purchased. </p>
<p>In particular, customers who use a retailer’s app tend to return products most often when they purchased those products on discount, and within seven days of making the original purchase. Apps often make it easier to purchase items on impulse. When customers receive some of the items and are dissatisfied, they regret the decisions and return the items. </p>
<p>Even taking into account the high rate of returns, app users spend more both online and in physical stores. But that’s when the apps work as customers expect them to.</p>
<h2>App failures –- and consequences</h2>
<p>Apps that load information slowly or crash frequently can deter not only online purchasing, but in-person spending, too. Surveys show that <a href="https://techbeacon.com/sites/default/files/gated_asset/mobile-app-user-survey-failing-meet-user-expectations.pdf">more than 60 percent</a> of users expect an app to load within four seconds. And our ongoing research suggests that more than half of users will abandon an app that freezes or crashes frequently.</p>
<p>App slowdowns can be costly. One estimate suggests that if each Amazon webpage took just one second longer to load, the company’s sales could drop <a href="https://www.fastcompany.com/1825005/how-one-second-could-cost-amazon-16-billion-sales">as much as $1.6 billion</a> a year. For smaller retailers, a similar drop of 2 to 3 percent would be a smaller dollar amount but still a significant blow.</p>
<p>Our ongoing research with Stanford’s <a href="https://www.gsb.stanford.edu/faculty-research/faculty/sridhar-narayanan">Sridhar Narayanan</a> suggests that poor app performance reduces users’ in-store spending too. Specifically, we studied how shoppers react when an app is not accessible for five or six hours, due (users were told) to a server error. Our preliminary results suggest that in the following two weeks, those shoppers spent 3 to 4 percent less in stores than they would have otherwise. Less-frequent customers reduced their spending even more than the company’s more regular shoppers.</p>
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<figcaption><span class="caption">Unnati Narang discusses her ongoing research on failures in mobile shopping apps.</span></figcaption>
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<p>Interestingly, customers who experience app failures spend less in stores, but their online spending remains unchanged. A deeper analysis indicates that when a retailer’s app fails, shoppers often go to the retailer’s website to complete their intended transactions. But the negative experience from app failure discourages them from buying more in the retailer’s store. </p>
<p>Our research illustrates some ways mobile apps can be a double-edged sword for customers and retailers alike. Shoppers can use apps to learn more about prospective purchases, be inspired on the fly and save time at the cash register. But if the software fails, they may be frustrated, discouraged and even spend less at physical stores. Retailers can see increased sales and faster transactions, but may have to handle more returns – though they’ll still make more money. The longer-term effects of mobile apps on the retail business have yet to be seen, of course, but in an ever-changing landscape, companies and customers alike will be exploring the options.</p><img src="https://counter.theconversation.com/content/88684/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>As businesses’ branded mobile apps become more common and popular, how are they affecting shoppers’ buying habits?Venkatesh Shankar, Professor of Marketing; Director of Research, Center for Retailing Studies, Texas A&M UniversityUnnati Narang, Ph.D. student in Business Administration (Marketing), Texas A&M UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/832862017-09-04T22:58:22Z2017-09-04T22:58:22ZAmazon’s appetite for disruption<figure><img src="https://images.theconversation.com/files/184072/original/file-20170830-24237-1wkunnf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A man shops for avocados at a Whole Foods Market in New York on Aug. 28. The splashy price cuts Amazon made as the new owner of Whole Foods has attracted some curious customers.</span> <span class="attribution"><span class="source">(AP Photo/Mark Lennihan, File)</span></span></figcaption></figure><p>Amazon is not wasting time in its acquisition of Whole Foods. Speed of execution, after all, is at the essence of the tech giant’s business model. </p>
<p>As soon as American regulators approved its acquisition of Whole Foods, Amazon said it would <a href="http://www.chicagotribune.com/business/ct-amazon-whole-foods-prices-20170828-story.html">aggressively reduce the price</a> of several organic staples in all of the 431 Whole Foods stores in the United States and Canada. They began doing so last week. Amazon’s playbook is about low margins and high-volume sales — for anything, including avocados, baby kale and grass-fed ground beef.</p>
<p>Technically, Whole Foods <a href="https://www.washingtonpost.com/news/wonk/wp/2017/02/09/why-whole-foods-is-now-struggling/">was in a free fall</a> before its acquisition. Store traffic was shrinking, sales were sluggish and the company was having difficultly convincing shareholders that organic food sales are immune to economic cycles and pose a bright future for the company. </p>
<p>In fact, Whole Foods reinforced the notion that organics are, for the most part, exclusive and for the elite. Its nickname in the U.S., after all, <a href="http://adage.com/article/cmo-strategy/amazon-aims-eliminate-foods-paycheck-image/310237/">has long been Whole Paycheck</a>.</p>
<p>Organic groceries are more expensive, costing consumers almost twice as much as conventional food products. Margins are also a sweet deal for grocers, as they can be as much as five times what they would be for non-organic foodstuffs.</p>
<p>Amazon obviously knows all this and intends to make organics more affordable and more democratic. At the same time, it also expects to make a statement as a change agent in the grocery business, putting all the players in the industry on notice. <a href="http://money.cnn.com/2017/06/16/investing/walmart-target-stocks-plunge-whole-foods-amazon/index.html">Slumping stock prices for the major U.S. grocery chains</a> show Amazon certainly has the market’s attention. </p>
<h2>Walmart biggest seller of organics in U.S.</h2>
<p>It’s not the first time a giant retailer has attempted to make its mark in organics. </p>
<p>Through its mastery of supply chain management, <a href="http://grist.org/food/why-you-should-be-skeptical-of-walmarts-cheap-organic-food/">Walmart has made organics more affordable</a> over the last decade or so, although with mixed results. When it committed to organics, Walmart wanted to offer more than 140 different organic products to its customers, but failed miserably. </p>
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<img alt="" src="https://images.theconversation.com/files/184074/original/file-20170830-24230-13f1h6k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/184074/original/file-20170830-24230-13f1h6k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/184074/original/file-20170830-24230-13f1h6k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/184074/original/file-20170830-24230-13f1h6k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/184074/original/file-20170830-24230-13f1h6k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/184074/original/file-20170830-24230-13f1h6k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/184074/original/file-20170830-24230-13f1h6k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Outside a Walmart store in Daytona Beach, Fla.</span>
<span class="attribution"><span class="source">(Shutterstock)</span></span>
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<p>Walmart soon discovered that the realities of organic farming make accessibility more challenging. Over the years, it adjusted expectations by offering fewer but cheaper products. Today, Walmart is now the largest seller of organic food products in America. </p>
<p>But Amazon now has Whole Foods, the mecca of organic food, which gives it a huge advantage over Walmart. With its newfound access to an incredible organics ecosystem that encompasses well-established farms, suppliers and wholesalers, Amazon can execute its strategy almost instantaneously in ways that Walmart could not. </p>
<p>And so it begins, but it remains unclear how all this will affect the Canadian organic market. </p>
<p>Unlike the U.S., food prices in Canada <a href="http://www.cbc.ca/news/business/inflation-cpi-july-1.4252545">have started to rise again</a> in recent months.</p>
<p>If anything, Canadians could see organics go up in price too due to Amazon’s determination to introduce more Americans to organic products. With higher demand south of us, procurement could become more challenging for Canada’s major grocery chains even if our currency <a href="https://www.thestar.com/business/2017/06/28/canadian-dollar-hits-four-month-high-as-july-rate-hike-odds-jump.html">remains strong</a> against the greenback. But over time, as Amazon increases its footprint in Canada, all this could change. </p>
<p>The American food distribution landscape is much different, especially today. With German-based Lidl and Aldi <a href="https://progressivegrocer.com/5-reasons-lidl-aldi-will-win-grocery-game">also expanding into the U.S.,</a> Americans may witness a continued food price war. </p>
<h2>Food prices dropping in U.S.</h2>
<p>Except for July, food prices in the United States <a href="https://www.bloomberg.com/news/articles/2016-09-27/eight-cent-eggs-consumers-gobble-cheap-food-as-grocers-squirm">have dropped for 18 months</a> in a row, the longest stretch since the 1950s. Pricing always has a very direct, short-term impact on profitability. Over time, though, the survivors absorb the shocks coming from the competition and from lower prices. </p>
<p>Since Amazon has never played the high-profit, high-dividend game, this is a non-issue for the company. But in terms of organics, the Amazon/Whole Foods story will only make matters worse for Kroger, Safeway and other competitors. </p>
<p>Why? </p>
<p>Convenience rather than prices is the primary factor in organics. And so organic retailing coupled with online selling can only leverage Amazon’s position in the marketplace. The distribution power driving Amazon’s move on Whole Foods makes the online giant almost immune to any procurement challenges, a common issue in organics. </p>
<h2>Meal kits next?</h2>
<p>Amazon’s next move could involve meal kits. </p>
<p>For years, grocers have treated food services like meal kits as an afterthought. But given that some analysts are projecting the online food service market is likely to increase 15 times faster than the rest of the restaurant business by 2027, some are starting the move. </p>
<p>The first out of the gates in Canada was Metro. <a href="https://beta.theglobeandmail.com/report-on-business/metro-acquires-majority-stake-in-ready-to-cook-meal-service-missfresh/article35854476/?ref=http://www.theglobeandmail.com&">Metro’s brilliant move</a> of purchasing the ready-to-cook meal delivery company MissFresh this summer is evidence that grocers are starting to see the potential, but it has been slow. </p>
<p>Amazon, however, does not move slowly.</p>
<p>Blue Apron, a U.S. meal kit provider, just announced <a href="https://www.cnbc.com/2017/08/22/blue-apron-puts-hiring-freeze-in-place-cuts-recruiting-staff.html">it was reducing its sales force</a> to better calibrate sales with capacity. Several meal kit start-ups have emerged and have done well, but no one has proven they can be sustainable for the long term.</p>
<p>Many have to spend an outrageous amount on marketing, and set very high price points for their products. It’s easy to see how Amazon could get into the meal kit business by using its massive data-driven strategies. Will Amazon bulldoze into Blue Apron’s territory? </p>
<p>Amazon is essentially about merchandizing convenience for all. Organics, meal kits — it’s all about convenience. </p>
<p>For years, Walmart mastered the concept of simplicity and one-stop shopping at a big box store. But Amazon is, quite frankly, betting on the indolent nature of mankind. And it’s winning.</p><img src="https://counter.theconversation.com/content/83286/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sylvain Charlebois does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Amazon has pledged to continue slashing prices at Whole Foods now that it’s acquired the organic food mecca. Will that mean more affordable organic food for more people – delivered overnight?Sylvain Charlebois, Professor in Food Distribution and Policy, Dalhousie UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/830632017-08-28T02:45:51Z2017-08-28T02:45:51ZAmazon’s Whole Foods deal could still be reversed thanks to forgotten antitrust case<figure><img src="https://images.theconversation.com/files/183527/original/file-20170827-27527-1f652gp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Amazon may make it impossible for Whole Foods rivals to compete.</span> <span class="attribution"><span class="source">AP Photo/Julie Jacobson</span></span></figcaption></figure><p>Amazon formally took ownership of Whole Foods this week after the Federal Trade Commission <a href="https://www.ftc.gov/news-events/press-releases/2017/08/statement-federal-trade-commissions-acting-director-bureau">signaled</a> on August 23 that it <a href="https://www.washingtonpost.com/news/business/wp/2017/08/23/ftc-clears-amazon-com-purchase-of-whole-foods/?utm_term=.8c4312e81500">wouldn’t stop the deal</a>. </p>
<p>The online retailer isn’t wasting any time remaking the high-end grocery chain in its low-price image. Its first act <a href="http://phx.corporate-ir.net/phoenix.zhtml?ID=2295514&c=176060&p=irol-newsArticle">involved cutting prices</a> on dozens of items, from avocados to tilapia. But that is not what is <a href="https://www.nytimes.com/2017/08/24/technology/whole-foods-amazon-lower-prices-prime.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news&_r=0">sending shivers</a> down the aisles of rival food retailers like Walmart, which now controls <a href="https://www.cnbc.com/2017/05/24/wal-mart-regaining-grocery-share-from-competitors-at-accelerating-rate.html">20 percent of the grocery market</a> by pursuing just such a <a href="http://www.businessinsider.com/why-walmart-can-pull-off-everyday-low-prices-while-everyone-else-keeps-failing-2012-9">low-price strategy</a>.</p>
<p>The reason, which the FTC ignored in providing its imprimatur, is that Amazon gives Whole Foods access to an <a href="http://www.retailtouchpoints.com/topics/e-commerce/amazon-claims-56-of-general-merchandise-traffic">online marketing platform</a> that no other grocery company, even a behemoth like Walmart, can hope to reproduce. </p>
<p>My research suggests that only a few decades ago the FTC would have used antitrust law to block the deal – and it still has the power to do so. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/183524/original/file-20170827-27564-18wzknt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/183524/original/file-20170827-27564-18wzknt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/183524/original/file-20170827-27564-18wzknt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/183524/original/file-20170827-27564-18wzknt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/183524/original/file-20170827-27564-18wzknt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/183524/original/file-20170827-27564-18wzknt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/183524/original/file-20170827-27564-18wzknt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Amazon will give Whole Foods a marketing platform for its products that few rival grocery stores can compete with.</span>
<span class="attribution"><span class="source">AP Photo/Gene J. Puskar</span></span>
</figcaption>
</figure>
<h2>Predatory promotion</h2>
<p>Everyone knows that Amazon is the biggest online retailer. The company handles <a href="http://www.businessinsider.com/amazon-accounts-for-43-of-us-online-retail-sales-2017-2">43 percent of all internet purchases</a> in the U.S., attracting so much business that its website is actually the country’s <a href="https://www.alexa.com/topsites/countries/US">fifth-most trafficked</a>. </p>
<p>But not everyone realizes that Amazon is also the king of online product search. By offering a huge range of products – almost <a href="https://www.scrapehero.com/how-many-products-are-sold-on-amazon-com-january-2017-report/">400 million</a> – Amazon entices more than half of online shoppers to <a href="https://www.bloomberg.com/news/articles/2016-09-27/more-than-50-of-shoppers-turn-first-to-amazon-in-product-search">bypass the usual search gatekeepers</a> and start their product hunt directly on its website.</p>
<p>Whole Foods will now have exclusive access among grocery retailers to this enormously valuable search engine. And it will be near impossible to compete with a company whose products and grocery delivery services can be <a href="https://www.forbes.com/sites/jeffreydorfman/2017/08/25/amazon-and-whole-foods-merger-to-introduce-cross-platform-selling-and-lower-prices/#677924c412f8">ordered directly through a website</a> that America already uses for nearly half of its online shopping. </p>
<p>That is bad for consumers because it means that Whole Foods may come to dominate the grocery world not by offering better products for the best prices, as you’d find in a well-functioning market, but because of the promotional advantage that comes from its tie-up with Amazon.</p>
<p>Congress passed the <a href="http://gwclc.com/Library/America/USA/The%20Clayton%20Act.pdf">Clayton Act</a> in 1914 to handle just this situation. The act <a href="https://www.law.cornell.edu/uscode/text/15/18">tasks</a> antitrust regulators with blocking acquisitions for which “the effect … may be substantially to lessen competition.” You might therefore have expected the FTC, which reviews mergers in the grocery industry, to take a special interest in this deal. </p>
<p>You’d be wrong, of course, because since the early 1980s antitrust regulators at the FTC and Justice Department have taken a narrow approach to merger enforcement, generally treating only <a href="https://scholar.google.com/scholar?cluster=3535564822158216845&hl=en&as_sdt=0,11">large deals between direct competitors</a> as a potential threat to competition. </p>
<p>That explains why the FTC approved the Whole Foods deal with <a href="https://www.bloomberg.com/news/articles/2017-08-23/amazon-s-whole-foods-deal-wins-fast-track-u-s-antitrust-nod">lightning speed</a>. Since Amazon had <a href="http://www.investors.com/news/amazon-fresh-grocery-threatens-wal-mart-kroger/">almost no presence</a> in the grocery industry when it inked the agreement, it didn’t qualify as a direct competitor.</p>
<p>In the 1960s and ‘70’s, however, things were different, as I show in <a href="http://ssrn.com/abstract=3027662">a recent paper</a>. During that time, the FTC fought a remarkable campaign to prevent companies from using promotional advantages to colonize new markets. Among the FTC’s victories in its battle against such “<a href="https://scholar.google.com/scholar?cluster=17099653873917998840&hl=en&as_sdt=0,11">predatory promotion</a>” were its reversals of household products giant Procter & Gamble’s <a href="https://scholar.google.com/scholar_case?case=17605714045622526127&q=procter%27s+acquisition+of+clorox&hl=en&as_sdt=80006">acquisition of Clorox bleach</a> and <a href="https://scholar.google.com/scholar_case?case=7491871295013379985&q=ftc+v.+general+foods&hl=en&as_sdt=80006">General Foods’ purchase of S.O.S.</a>, the scrub pad maker.</p>
<p>Like Amazon, both P&G and General Foods acquired companies in markets in which they were not yet direct competitors. Like Amazon, both could leverage their vast product lines to offer their new acquisitions a massive promotional advantage. The difference is that back then P&G and General Foods had a sizable advantage in television advertising, rather than online search traffic, because their extensive product portfolios allowed the companies to <a href="https://scholar.google.com/scholar?cluster=7534880275645364220&hl=en&as_sdt=0,11">negotiate bulk discounts from the major networks</a>.</p>
<p>The legal precedents created by those cases give the FTC a basis for unwinding the Amazon Whole Foods deal but have been ignored for decades by federal antitrust enforcers.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/183525/original/file-20170827-27564-1gje02x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/183525/original/file-20170827-27564-1gje02x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/183525/original/file-20170827-27564-1gje02x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/183525/original/file-20170827-27564-1gje02x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/183525/original/file-20170827-27564-1gje02x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/183525/original/file-20170827-27564-1gje02x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/183525/original/file-20170827-27564-1gje02x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The FTC convinced the Supreme Court that Procter & Gamble’s purchase of Clorox in the 1950s violated antitrust law.</span>
<span class="attribution"><span class="source">AP Photo/Mary Altaffer</span></span>
</figcaption>
</figure>
<h2>Lessons from the case against P&G</h2>
<p>The FTC’s <a href="https://www.ftc.gov/sites/default/files/documents/commission_decision_volumes/volume-63/ftcd-vol63july-december1963pages1407-1506.pdf">case against P&G</a> is particularly relevant today. Filed in 1957 shortly after the Clorox purchase closed, it established for the first time that, as the Supreme Court put it, an acquisition that creates “<a href="https://scholar.google.com/scholar_case?case=17605714045622526127&q=procter%27s+acquisition+of+clorox&hl=en&as_sdt=80006">huge assets and advertising advantages</a>” can violate antitrust law. </p>
<p>P&G’s product line was <a href="https://www.ftc.gov/sites/default/files/documents/commission_decision_volumes/volume-63/ftcd-vol63july-december1963pages1407-1506.pdf">so large</a>, extending from Ivory soap to Duncan Hines cake mix, that it was already the nation’s largest national TV advertiser. This allowed P&G to negotiate bulk discounts on advertising time that it could pass on to Clorox. </p>
<p>The FTC feared that those discounts would give Clorox privileged access to the dominant marketing platform of the era. When Americans tuned in to the <a href="https://www.youtube.com/watch?v=nLaDfQF3YKc">Big Three television networks</a>, they would see Clorox, and only Clorox, for sale, much as when Americans use Amazon to search for groceries online, they will see only Whole Foods groceries available for delivery.</p>
<p>The FTC filed suit to unwind the deal, arguing that P&G would drive competitors from the market, not because those competitors offered an inferior product – all bleach is chemically identical – but because P&G had a promotional advantage. Similarly, Whole Foods will be able to use Amazon’s website to swallow up market share, even though its rivals also offer similar services and products, such as <a href="http://www.slate.com/blogs/business_insider/2017/03/27/kroger_s_organics_are_threatening_whole_foods_popularity.html">organic produce</a> and <a href="https://www.cnbc.com/2017/01/30/online-grocery-sales-set-surge-grabbing-20-percent-of-market-by-2025.html">online ordering</a>. </p>
<p>After <a href="https://scholar.google.com/scholar_case?case=6839327024219684325&q=ftc.+v.+procter&hl=en&as_sdt=80006">an initial setback</a>, the FTC <a href="https://scholar.google.com/scholar_case?case=17605714045622526127&q=ftc+procter+and+gamble&hl=en&as_sdt=80006">won its case</a> in the Supreme Court in 1967, establishing a precedent for the first time that mergers that create massive promotional advantages can violate the law, even when there is no direct competition between the target and acquiring companies. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/183526/original/file-20170827-27532-1b3vbrp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/183526/original/file-20170827-27532-1b3vbrp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=466&fit=crop&dpr=1 600w, https://images.theconversation.com/files/183526/original/file-20170827-27532-1b3vbrp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=466&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/183526/original/file-20170827-27532-1b3vbrp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=466&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/183526/original/file-20170827-27532-1b3vbrp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=585&fit=crop&dpr=1 754w, https://images.theconversation.com/files/183526/original/file-20170827-27532-1b3vbrp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=585&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/183526/original/file-20170827-27532-1b3vbrp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=585&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">After his election victory in 1980, President Reagan remade the FTC, ending its campaign against predatory promotion.</span>
<span class="attribution"><span class="source">AP Photo/Rusty Kennedy</span></span>
</figcaption>
</figure>
<h2>Reversing course</h2>
<p>President Ronald Reagan <a href="https://www.washingtonpost.com/archive/business/1982/01/16/cereal-maker-antitrust-case-is-dismissed/f343e32f-5217-43af-978c-2d5fe553fc83/?utm_term=.6c09d67be912">cut short</a> this campaign against predatory promotion in the early 1980s by <a href="https://www.washingtonpost.com/archive/business/1984/09/26/pertschuk-exits-ftc-with-guns-blazing/5e9c7df9-e639-41af-8c8c-202fcdb55eca/?utm_term=.e882292421a3">appointing new officials to the FTC</a> who argued that promotion is good for consumers, regardless of whether it confers an advantage on a particular competitor, because it provides consumers with <a href="https://www.ftc.gov/sites/default/files/documents/commission_decision_volumes/volume-103/ftc_volume_decision_103_january_-_june_1984pages_204-373.pdf">useful product information</a>. The idea has proven immune to subsequent changes in administration.</p>
<p>In <a href="http://ssrn.com/abstract=3027662">my paper</a> I counter that this argument rings hollow in the information age, because consumers can now get all the product information they need from myriad sources online. Making Whole Foods’ groceries searchable on Amazon’s website doesn’t increase the internet’s cache of product information – consumers can already get that on the grocer’s <a href="http://www.wholefoodsmarket.com/online-ordering">website</a> – but it will steer consumers squarely toward Whole Foods’ products.</p>
<p>The FTC can still reverse course and <a href="https://www.ftc.gov/sites/default/files/documents/public_statements/consummated-merger-challenges-past-never-dead/120329springmeetingspeech.pdf">block the deal after it closes</a>, as it did in the forgotten P&G case. </p>
<p>If it doesn’t, then your only option for buying anything could one day be Amazon. And if that happens, <a href="https://books.google.com/books?id=tkIeAAAAIAAJ&dq=inauthor%3A%22Alfred%20Marshall%22&pg=PA180#v=onepage&q&f=false">textbook economics teaches</a> that those avocados won’t stay cheap for long.</p><img src="https://counter.theconversation.com/content/83063/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ramsi Woodcock does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The deal escaped scrutiny because the two aren’t direct competitors, yet Amazon’s huge marketing platform will help Whole Foods steamroll rivals. In the past, the Supreme Court has said this violates antitrust law.Ramsi Woodcock, Professor of Legal Studies, Georgia State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/797762017-06-21T11:10:42Z2017-06-21T11:10:42ZWill Amazon’s Whole Foods deal go the same way as L'Oréal and Body Shop?<figure><img src="https://images.theconversation.com/files/174900/original/file-20170621-8977-1qf4cly.jpg?ixlib=rb-1.1.0&rect=172%2C333%2C3737%2C2321&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/london-united-kingdom-22-jun-2017-661686322?src=NOz5__An-Za3TR_sxcnCzA-1-53">EQRoy/Shutterstock</a></span></figcaption></figure><p>Online retail giant Amazon has made a decisive move into food retail. The <a href="http://www.bbc.co.uk/news/business-40306099">acquisition of US grocer Whole Foods</a>, a pioneer in organic, healthy food shopping for well-off consumers, brings together two businesses with contrasting reputations. We’ve been here before. And it didn’t work out well.</p>
<p>Amazon’s mission is to build a place where people can find “anything they might want to buy online”. In the Whole Foods mission statement, however, it promises to “<a href="http://www.wholefoodsmarket.com/our-mission-values">not sell just anything</a>” but to deliver the highest quality that encompasses the greater good. We perhaps shouldn’t judge a deal by highlighting that the corporate PR seems to be at odds, but this discrepancy does raise some profound questions about the purpose of a business and how that purpose is accomplished. </p>
<p>For years, Amazon has been criticised for its business practices. A burnout-inducing <a href="https://www.theguardian.com/sustainable-business/2015/aug/19/amazon-employee-abuse-rights-wages-walmart">work culture</a>, limited focus on <a href="https://www.theguardian.com/sustainable-business/2015/aug/05/amazon-best-buy-electronic-waste-walmart-recyling">recycling</a> and a lack of transparency on sustainability reporting have all come under fire. Compare that to Whole Foods’ value-based culture of caring for worker communities, adoption of <a href="http://www.wholefoodsmarket.com/blog/tricky-recycling-made-easy">responsible recycling</a> and its foray into <a href="https://www.fool.com/investing/general/2016/03/12/whole-foods-makes-sustainability-push-beyond-food.aspx">solar energy</a>. It feels like a strange marriage. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/174902/original/file-20170621-8977-1e7045f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/174902/original/file-20170621-8977-1e7045f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=331&fit=crop&dpr=1 600w, https://images.theconversation.com/files/174902/original/file-20170621-8977-1e7045f.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=331&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/174902/original/file-20170621-8977-1e7045f.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=331&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/174902/original/file-20170621-8977-1e7045f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=415&fit=crop&dpr=1 754w, https://images.theconversation.com/files/174902/original/file-20170621-8977-1e7045f.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=415&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/174902/original/file-20170621-8977-1e7045f.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=415&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">An Amazon distribution centre in Germany.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/rheinberg-germany-january-29-2017-amazon-566737150?src=5ZbnbP0jN73KplIpgYWfvg-1-12">Lukassek/Shutterstock</a></span>
</figcaption>
</figure>
<h2>Trojan horse</h2>
<p>In fact, it does bring to mind 2006, when L’Oréal, the corporate beauty giant with a deeply questionable <a href="https://www.theguardian.com/business/2006/mar/17/retail.animalrights">animal testing record</a>, acquired Body Shop, the socially conscious beauty company known for its ethical products and friendly environmental practices. The deal was made through <a href="https://www.forbes.com/sites/greatspeculations/2017/02/23/why-is-loreal-trying-to-sell-off-natural-beauty-brand-the-body-shop/#1a74ae911523">an agreed buyout</a> with Anita Roddick, the founder of Body Shop. Agreements were made that Body Shop would continue to run independently, and Roddick was quoted as saying Body Shop could act as “<a href="https://www.theguardian.com/business/2006/nov/03/ethicalliving.environment">a Trojan horse</a>” and positively influence the way L'Oréal did business. </p>
<p>However, over time, the lack of a cultural fit between the two companies, and growing competition from other ethical beauty brands, led to a decline in Body Shop’s appeal. Sales fell, as did operating profits and <a href="http://www.business-standard.com/article/international/l-oreal-looks-to-sell-the-body-shop-as-profits-fall-117021000062_1.html">market share</a>. Now L’Oréal is <a href="https://www.theguardian.com/business/2017/feb/09/loreal-considers-selling-the-body-shop-as-profits-fall">looking to sell</a> Body Shop a decade after a deal that shocked many. Clearly, there is more to an acquisition than just potential financial rewards, and that mismatch of ideology and purpose can lead to reduced value for investors themselves. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/174903/original/file-20170621-30227-2rat7d.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/174903/original/file-20170621-30227-2rat7d.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/174903/original/file-20170621-30227-2rat7d.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/174903/original/file-20170621-30227-2rat7d.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/174903/original/file-20170621-30227-2rat7d.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/174903/original/file-20170621-30227-2rat7d.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/174903/original/file-20170621-30227-2rat7d.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/174903/original/file-20170621-30227-2rat7d.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Is the same in store for Whole Foods?</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/sepang-malaysia-january-14-2017-body-557879005?src=rCxPN_vDsIWkMPjvIfV5kA-1-0">mrfiza/Shutterstock</a></span>
</figcaption>
</figure>
<p>The Whole Foods deal has echoes of that Body Shop-L’Oréal story, but there are some important differences. Amazon has responded to criticisms over its sustainability credentials and signalled a positive shift by significantly expanding its <a href="https://www.theguardian.com/sustainable-business/2016/feb/02/amazon-sustainability-edf-epa-best-buy-walmart-apple-microsoft-csr-child-labor">sustainability team</a>. It has also announced a <a href="https://www.amazon.com/p/feature/gkkwdp34z5ou7ug">series of goals</a> in this direction, ranging from solar-energy-powered fulfilment centres to construction of its largest wind farm. </p>
<h2>Pressure off?</h2>
<p>But let’s not get carried away. Amazon is more than 20 years old, and remains a laggard in the sustainability movement. Its venture into renewables was not a matter of business philosophy, but was driven by market and competitor pressures and the push to align with the previous US administration’s stand on <a href="https://www.ecowatch.com/apple-google-amazon-and-microsoft-file-amicus-brief-in-support-of-the--1882200369.html">climate change</a>. In contrast, Whole Foods has followed a mindful approach to sustainability, winning its first Green Power award from the US Environment Protection Agency (EPA) more than 13 years ago. With the Trump administration’s renewed focus on coal, the US withdrawal from the Paris Climate Agreement, and overhaul of the EPA, the pressure on Amazon to progressively adopt green tech may ease. </p>
<p>It is also hard to see how Amazon will handle the strong views of John Mackey, CEO of Whole Foods and a proponent of conscious capitalism. He <a href="http://features.texasmonthly.com/editorial/shelf-life-john-mackey/">has been quoted</a> as saying:</p>
<blockquote>
<p>Business (in America) is about a bunch of greedy bastards running around exploiting people, screwing their customers, taking advantage of their employees, dumping their toxic waste in the environment, acting like sociopaths.</p>
</blockquote>
<p>The Whole Foods approach is to create long-term value for its owners, shoppers, workers, suppliers and local residents. What marks out a so-called “purposeful” business is its ability to stay true to that mission, rather than drifting inexorably towards life as an engine of growth for investors through continuous expansion. </p>
<p>Now, Amazon has focused on long-term growth and is a customer-centric company, but <a href="https://www.nytimes.com/2015/08/16/technology/inside-amazon-wrestling-big-ideas-in-a-bruising-workplace.html">its attitude</a> towards workers, communities and the environment has often been drastically different from that of Whole Foods, leading to the obvious question of how Whole Foods will be run within Amazon. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/174904/original/file-20170621-30211-1y616y2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/174904/original/file-20170621-30211-1y616y2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/174904/original/file-20170621-30211-1y616y2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/174904/original/file-20170621-30211-1y616y2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/174904/original/file-20170621-30211-1y616y2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/174904/original/file-20170621-30211-1y616y2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/174904/original/file-20170621-30211-1y616y2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/174904/original/file-20170621-30211-1y616y2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Will Mackey make way?</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/gageskidmore/8485118402/in/photolist-dVNs5S-dVUiVa-rtKip-UtaGiz-UrqdnN-UrqnDy-UtaEiH-UrqtxN-UtaFGV-UgB712-TQNHGu-Tkg4p7-UgBWZK-UiwYjB-Upurnu-Un9r2w-UtaDi6-TdDhAf-TSMWEy-Uiyqkn-UrquoW-Ted39c-UqPeCH-UrqknE-TbJHqh-UfXorA-KxcdF-Uptx9G-TdE43m-UtacqK-TV3Njd-UfYfQG-UtaGV6-TV4a7f-UtaEPT-UgB47g-Up7TVo-TbJwPN-UfXRWW-Uix3Zt-Fr2cEw-UdGs6m-TdDgpC-UiypX8-PwbUAR-NwvbCd-UixvuH-UbLEGN-TbJxAY-UfY98U">Gage Skidmore/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<h2>Misfits</h2>
<p>The fear must be that the rationale for the Whole Foods acquisition is to make cost cuts and secure a good outcome for investors. There is <a href="http://nypost.com/2017/06/19/amazon-may-replace-a-whole-lot-of-whole-foods-cashiers-with-robots/">much chat in the media</a> about Amazon’s warehouse robots being let loose on Whole Foods, at the expense of jobs. And the door is already ajar. Pressure from investors has already led to an overhaul of the Whole Foods’ <a href="http://fortune.com/2017/05/11/whole-foods-board-shakeup/">board of directors</a>, where long-standing conscious capitalism supporters have been replaced by corporate leaders interested in market growth and investor wealth maximisation. </p>
<p>There is clear business potential here for Amazon, but an equally clear lesson from past acquisitions where a poor cultural fit has proved detrimental for everyone involved and for the brand itself. Whole Foods has become synonymous with ethical consumption through its careful selection of vendors and products. Despite competition, it has an ardent following of ethical consumers. </p>
<p>There is a genuine risk that this acquisition will muddy the waters for Whole Foods shoppers. Will they now be faced with shelves full of “anything” that can sell, rather than the benign niche products they are used to? How leadership works post-acquisition will be key: how and why decisions are made, and by whom, will dictate whether the upscale grocer loses its <a href="https://theconversation.com/conscious-capitalism-how-to-make-the-most-of-the-kindness-in-business-34848?sr=1">claim to conscious capitalism</a>. The deal could be a success, but if lessons aren’t learnt, Whole Foods could even go the same way as the Body Shop, and end up on the auction block in a decade’s time.</p><img src="https://counter.theconversation.com/content/79776/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span> </span></em></p>A pioneer of ethical consumerism, wedded to a corporate giant with a questionable record? The lessons of a decade ago should be ringing alarm bells.Tanusree Jain, Assistant Professor of Ethical Business, Trinity College DublinLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/796382017-06-19T11:53:41Z2017-06-19T11:53:41ZAmazon dives into groceries with Whole Foods: 5 questions answered<p><em>Editor’s note: Amazon became a major player in the supermarket business overnight after <a href="https://www.bloomberg.com/news/articles/2017-06-16/amazon-to-acquire-whole-foods-in-13-7-billion-bet-on-groceries">the online retailer said it was buying upscale grocery chain Whole Foods</a> for US$13.7 billion, including debt, a premium of 27 percent over Whole Foods’ presale share price. The purchase would be <a href="https://www.recode.net/2017/6/16/15816294/amazon-largest-acquisitions-size-chart">Amazon’s biggest ever</a>. We asked economist Roger Meiners to explain what Amazon gets out of it and why Whole Foods agreed to sell.</em> </p>
<h2>1. Why would Amazon pay so much for bricks and mortar?</h2>
<p>Buying Whole Foods gives Amazon <a href="http://www.wholefoodsmarket.com/company-info">465 premier locations</a> immediately. Whole Foods will continue to sell food, but as an Amazon subsidiary there is a chance to <a href="https://www.bloomberg.com/news/articles/2017-06-18/amazon-said-to-plan-cuts-to-shed-whole-foods-pricey-image">experiment</a> with <a href="https://www.bloomberg.com/news/articles/2016-11-22/whole-foods-price-problems-in-full-view-with-thanksgiving-surge">other facets</a> of Amazon’s retailing experience. In other words, <a href="https://www.usatoday.com/story/money/business/2017/06/18/get-ready-amazon-whole-foods-deal-change-how-you-buy-food-forever/102914448/">Amazon sees more than just a grocery subsidiary</a> in Whole Foods. </p>
<p>Amazon has already been experimenting on its own with, for example, <a href="https://www.amazon.com/b?node=16008589011">Amazon Go</a>, which opened in its hometown of Seattle as a <a href="https://www.theguardian.com/technology/2017/apr/16/amazon-seattle-testing-ground-go-fresh-real-space-grocery-treasure-truck">beta program</a> for the company’s employees. Shoppers must use the Amazon Go app, which features “just walk out” technology that automatically detects all the products they’ve taken off the shelves. Amazon then simply charges their account for whatever items they leave with. </p>
<p>So with Whole Foods, Amazon could try this with prepared foods. Busy people could walk in on their lunch break, pick up what they want and walk out without having to wait in a checkout line. And now Amazon can do this on a much larger scale and won’t have to build a network of stores from scratch. </p>
<p>In addition, Whole Foods has a strong brand and above-average income clientele <a href="http://infoscout.co/retailer/whole_foods">willing to pay a premium</a> for groceries – and perhaps much else. After all, its <a href="https://www.bloomberg.com/news/articles/2016-11-22/whole-foods-price-problems-in-full-view-with-thanksgiving-surge">nickname isn’t “whole paycheck”</a> for nothing.</p>
<p>Is there a risk that increased automation will lead to job losses at Whole Foods, an issue facing the entire economy in coming years <a href="https://theconversation.com/are-robots-taking-our-jobs-56537?sr=7">as more tasks are replaced by robots</a>? I don’t think this is a big risk for Whole Foods. There’s only so much automation can do in the grocery business. The company will still need people to prepare the meals, for example, even if it won’t need as many cashiers. </p>
<h2>2. Food delivery has failed before, so why does Amazon think it might work now?</h2>
<p>Food delivery was tried before, <a href="https://blogs.wsj.com/venturecapital/2009/11/02/10-years-ago-today-when-online-groceries-were-all-the-rage/">back in the dot-com era</a> in the late 1990s. </p>
<p>The promise was that everything was going to be ordered online and delivered, including groceries. As you may remember from that era’s <a href="http://www.businessinsider.com/heres-why-the-dot-com-bubble-began-and-why-it-popped-2010-12">bubble bursting</a>, it did not work all that well back then. </p>
<p>One problem for delivered foods in particular is that people <a href="https://toughnickel.com/industries/Pros-and-Cons-of-Online-Grocery-Shopping">worry that they will be given lower-quality fruits and vegetables</a>. When we go to the store, we can choose what we like and pick only high-quality produce. Seeing the Whole Foods brand on the grocery bag likely reduces this concern, which may encourage online grocery orders.</p>
<p>And another element of success is the physical locations themselves, something that has helped grocery delivery service Peapod expand in recent years. <a href="http://observer.com/2017/06/amazon-whole-foods/">Amazon may see that as a model</a> for Whole Foods. </p>
<h2>3. What other benefits might Amazon obtain?</h2>
<p>Whole Foods’ physical stores could also allow Amazon to reduce reliance on UPS and other delivery services. </p>
<p>As it is now, Amazon Prime customers like me can order some cheap trinket and have it delivered “free” by UPS within two days. Yet sometimes the goods cost less than what Amazon pays for shipping, and that’s a large cost the retailer would like to reduce. </p>
<p>Thus Whole Foods stores could give Amazon a new delivery outlet to cut these costs. For example, as an alternative to home delivery, Amazon could allow customers to pick up their package at the nearest Whole Foods and earn bonus points or some other reward for helping the retailer reduce its shipping costs. </p>
<p>As most of us go grocery shopping a lot more than we shop for clothing, the attractiveness of picking up deliveries at Whole Foods stores seems clear. </p>
<p>As does the attractiveness of Amazon’s purchase, which clearly wasn’t about quantity. If it had been, Amazon might have purchased children’s clothing chain Gymboree, which <a href="http://www.jsonline.com/story/money/business/2017/06/12/retailer-gymboree-files-bankruptcy-close-up-450-stores/388818001/">just filed for Chapter 11 bankruptcy protection</a>, with its 1,281 stores (it plans to close as many as 450 of them). </p>
<p>Rather, Amazon wanted a high-end grocery chain with convenient parking to provide a more attractive locale for foot traffic to pick up orders.</p>
<h2>4. Should we be concerned that Amazon will have a monopoly on the economy along with Google and Apple?</h2>
<p>These companies, which were modest a decade ago, are now among the largest organizations in the world. There is concern – <a href="https://www.theatlantic.com/technology/archive/2017/06/when-exactly-does-amazon-become-a-monopoly/530616/">fueled in part by purchases like this one</a> – that <a href="https://www.wsj.com/articles/amazon-is-leading-techs-takeover-of-america-1497653164">they will control too much</a> as the tech companies take over the world. </p>
<p>That, in my opinion, is an old saw. We have heard the scaremongers throughout history. Remember when <a href="http://www.dvorak.org/blog/ibm-and-the-seven-dwarfs-dwarf-four-honeywell/">IBM was the dominant company</a> in the computer market? It is <a href="https://www.amazon.com/Capitalism-Socialism-Democracy-Joseph-Schumpeter/dp/0061561614">just part of the evolution</a> of business that goes back to <a href="http://www.investopedia.com/terms/c/creativedestruction.asp">economist Joseph Schumpeter’s idea of creative destruction</a>.</p>
<p>Old grocery stores may fall by the wayside as people choose new modes of delivery for goods they want. But Amazon, with Whole Foods, isn’t alone in going this way. Other companies are experimenting in these areas as well, such as <a href="https://grocery.walmart.com/anonymous-landing?adid=1500000000000039619000&veh=wmt&search_redirect=true">Walmart</a>, and smaller, nimbler businesses like Peapod will always be nipping at the giants’ heels. Or these giants may become dinosaurs and unable to react to new conditions. No <a href="https://books.google.ca/books?hl=en&lr=&id=K6FrJTWeUssC&oi=fnd&pg=PR4&dq=once+dominant+companies+fail+innovation+sears&ots=3uAY-vEIjz&sig=HBBsgd-45X_dKQfxFXhyMzB9ISA#v=onepage&q=once%20dominant%20companies%20fail%20innovation%20sears&f=false">company stays dominant forever</a>. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/174326/original/file-20170618-28797-1jjwqbf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/174326/original/file-20170618-28797-1jjwqbf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=421&fit=crop&dpr=1 600w, https://images.theconversation.com/files/174326/original/file-20170618-28797-1jjwqbf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=421&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/174326/original/file-20170618-28797-1jjwqbf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=421&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/174326/original/file-20170618-28797-1jjwqbf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=529&fit=crop&dpr=1 754w, https://images.theconversation.com/files/174326/original/file-20170618-28797-1jjwqbf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=529&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/174326/original/file-20170618-28797-1jjwqbf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=529&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Whole Foods CEO John Mackey juggles apples at one of his stores on New York’s Upper West Side.</span>
<span class="attribution"><span class="source">AP Photo/Richard Drew</span></span>
</figcaption>
</figure>
<h2>5. Why would Whole Foods sell itself?</h2>
<p>Whole Foods CEO and co-founder John Mackey had recently been fending off a serious threat from investors who wanted to force a sale of the chain or a big boardroom shakeup, including his ouster. While he had been <a href="http://www.cnbc.com/2017/06/14/whole-foods-ceo-john-mackey-calls-activist-investor-greedy-bastards.html">publicly resisting their efforts</a>, it’s hard to know if he was just sick of fighting or not. </p>
<p>But in the end, Mackey negotiated a premium sale price and gets to keep his job as CEO of <a href="https://www.bloomberg.com/news/articles/2017-06-16/amazon-to-acquire-whole-foods-in-13-7-billion-bet-on-groceries">his “baby”</a> as part of one of the most valued and innovative companies in the world. That must offer some personal satisfaction. </p>
<p>And while he may think he’s taking Whole Foods into the future of retail, he may also be taking it back in time, to the bygone era of general stores, where you could get just about anything. In some locales, it even served as the post office too – it’s almost like a template for the virtual general store Amazon has become. </p>
<p>Whole Foods may bring this concept back to actual brick and mortar. In old westerns, there was always a general store where you could get crackers and a lasso. The same might be true about the new incarnation of Whole Foods. You could stop in to get organic crackers and pick up the exercise rope you ordered from Amazon.</p><img src="https://counter.theconversation.com/content/79638/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Roger Meiners does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Amazon paid a premium to snap up the upscale grocery chain, so we asked an economist to help us better understand the deal and what it means.Roger Meiners, Goolsby-Rosenthal Endowed Chair of Economics, University of Texas at ArlingtonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/480072015-09-24T20:15:42Z2015-09-24T20:15:42ZExpert is as expert does: in defence of US dietary guidelines<figure><img src="https://images.theconversation.com/files/96033/original/image-20150924-17074-xcuzy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The main thrust of the advisory committee’s report is that diets should be focused on whole foods, not specific nutrients.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/usdagov/8263905087/">U.S. Department of Agriculture/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>National dietary guidelines have become an easy target for those looking for a scapegoat for bad diets in prosperous countries. And an article just <a href="http://www.bmj.com/content/351/bmj.h4962">published in the BMJ</a> about the scientific evidence for the US dietary guidelines provides further needless fuel for the fire.</p>
<p>In February 2015, an advisory committee of 14 experts appointed to review research evidence and inform the government of the relevant science underpinning the US dietary guidelines issued a <a href="http://health.gov/dietaryguidelines/2015-scientific-report/">570-page report</a>. Among its conclusions, the report recommended guiding the population to dietary patterns that are:</p>
<ul>
<li>rich in vegetables, fruit, whole grains, seafood, legumes and nuts </li>
<li>moderate in low-fat and non-fat dairy products and alcohol (among adults) </li>
<li>lower in red and processed meat, and </li>
<li>low in sugar-sweetened foods and beverages and refined grains.</li>
</ul>
<p>The report also recommended limiting marketing of unhealthy foods to children, clearer food labelling, and greater consideration of sustainability issues. </p>
<p>The report generated much angst. This was not unexpected – because so many people feel they’re experts in nutrition, and because it upset many <a href="http://www.usda.gov/factbook/chapter2.pdf">groups with vested interests</a> in maintaining the current US diet with its high levels of meat, junk foods and drinks. </p>
<p>The advisory committee received more than 29,000 written responses to its recommendations. <a href="http://www.sugar.org">The Sugar Association</a>, the National Pork Producers Council, the National Cattlemen’s Beef Association and the National Chicken Council <a href="http://union-bulletin.com/news/2015/mar/14/meat-industry-wages-war-new-guidelines/">all challenged the report</a>. </p>
<p>Senators <a href="http://www.grassley.senate.gov/news/news-releases/grassley-extension-public-comment-period-dietary-guidelines-advisory-committee">complained directly to Congress</a>, <a href="http://www.thune.senate.gov/public/index.cfm/press-releases?ID=2cbe42da-eac8-48c1-a820-44a392b57195">especially upset</a> that health and nutrition experts <a href="http://www.fcrn.org.uk/fcrn-blogs/samuel-lee-gammage/who-will-win-battle-over-sustainability-dietary-guidelines-americans">should consider sustainability</a>. <a href="http://www.futureoffood.ox.ac.uk/blog/us-dietary-guidelines-report-%E2%80%93-whats-fuss-over-sustainability">Others</a>, including <a href="http://www.hsph.harvard.edu/nutritionsource/2015/06/16/the-new-focus-on-sustainability-the-dietary-guidelines-for-americans-and-for-our-planet/">experts in the field</a>, were <a href="http://www.foodpolitics.com/2015/03/my-plate-my-planet-support-sustainability-in-dietary-guidelines/">supportive of its inclusion</a>. </p>
<p>A congressional hearing on the report has been scheduled for October 7.</p>
<h2>People in glass houses</h2>
<p>The recommendations also met with displeasure from those who promote high-fat, low-carbohydrate diets. And this week the BMJ has unfortunately given voice to one such person. US journalist and author of <a href="http://thebigfatsurprise.com/">The Big Fat Surprise: Why Butter, Meat and Cheese Belong in a Healthy Diet</a> Nina Teicholz has published an “investigation” into the report and its authors.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/96030/original/image-20150924-17087-1o9rtjz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/96030/original/image-20150924-17087-1o9rtjz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/96030/original/image-20150924-17087-1o9rtjz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/96030/original/image-20150924-17087-1o9rtjz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/96030/original/image-20150924-17087-1o9rtjz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/96030/original/image-20150924-17087-1o9rtjz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/96030/original/image-20150924-17087-1o9rtjz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A new advisory report on US dietary guidelines has upset many in the meat and junk food industries.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/brizzlebornandbred/9375507295/in/photolist-fhtVFv-ff52LL-ff52BN-4z5AkF-6CMYYq-6CMZ9s-7cXRW8-4z5D48-4z5vot-4z5yqD-4z9T2w-4z9TrA-4z5za8-y4gkiG-4z9TJL-a95RFU-4z5BKM-4z5DiH-e1iERv-5kk29W-aj1328-5B1sk7-sMsxA-e1NAEK-4z9RyY-czfSzC-h">Paul Townsend/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>In line with the arguments of her book, Teicholz criticises the scientific report for the 2015 guidelines. She claims the advisory committee didn’t conduct thorough reviews of recent evidence and failed to identify their conflicts of interest. </p>
<p>But, after a close look, I could find little evidence of conflict of interest among the committee members. Its members were carefully selected to provide balanced viewpoints on the scientific evidence, and to not represent the viewpoints of any specific group. They conducted public meetings and also invited various other experts to present data. </p>
<p>It’s hard to understand Teicholz’s criticism of such an extensive, systematic and practical report. The methodology <a href="http://health.gov/dietaryguidelines/2015-scientific-report/05-methodology.asp">the panel used</a> was thorough, clearly outlined and followed strict scientific guidelines.</p>
<p>Over a two-year period, the committee examined a vast amount of data in a detailed and scientifically rigorous way. Its answers to science-based research questions were published at the <a href="http://www.nel.gov/">USDA Nutrition Evidence Library</a> (NEL). The committee also used systematic reviews that pay great attention to sources and types of bias, and graded all this evidence according to strict and well-defined criteria. </p>
<p>Perhaps in keeping with her own conflict of interest in promoting the ideas in her book and the listed conflicts in the BMJ piece (honorariums from the restaurant, meat and dairy industries), Teicholz is especially critical of the advice concerning saturated fat. The US diet is high in saturated fat, with much of it coming from vegetable oils hydrogenated for use in commercial frying, pizzas, pastries, cakes and desserts, biscuits, savoury and sweet snack foods. Some of it comes from a high intake of processed and fatty meats, including burgers. And cheese is a major source. </p>
<h2>Saturated fat controversy</h2>
<p>The advisory committee’s report doesn’t ignore the recent controversy over saturated fat and heart disease. In fact, it <a href="http://health.gov/dietaryguidelines/2015-scientific-report/11-chapter-6/d6-2.asp">specifically discusses major studies</a> of randomised controlled trials and prospective cohort studies conducted between 2009 and 2014. The committee placed particular emphasis on reviews that looked at what <em>replaces</em> saturated fat in most diets, a move suggested by authors of recent research reviews that reported a lack of relationship between total intake of saturated fat and heart disease. </p>
<p>The <a href="http://www.cochrane.org/CD011737/VASC_effect-of-cutting-down-on-the-saturated-fat-we-eat-on-our-risk-of-heart-disease">best evidence</a> still points out that when saturated fats are replaced with polyunsaturated fats, cholesterol levels improve and the risk of cardiovascular disease declines. But the key is where these polyunsaturated fats come from; getting them from deep-fried foods or snack foods, for instance, won’t improve heart health.</p>
<p>The claim by some critics that the committee’s report advocates a low-fat or high-carb diet is wrong. Indeed, the report specifically notes that swapping saturated fat for sugar and refined grains is useless. Instead, it recommends foods high in unsaturated fats, echoes the recommendation from the <a href="http://www.who.int/mediacentre/factsheets/fs394/en/">World Health Organization</a> that added sugars be limited to no more than 10% of total daily calories, and recommends big reductions in refined grains.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/96031/original/image-20150924-17062-11jw54q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/96031/original/image-20150924-17062-11jw54q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/96031/original/image-20150924-17062-11jw54q.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/96031/original/image-20150924-17062-11jw54q.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/96031/original/image-20150924-17062-11jw54q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/96031/original/image-20150924-17062-11jw54q.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/96031/original/image-20150924-17062-11jw54q.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The US diet is high in saturated fat, with cheese being a major source.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/cogdog/8690615113/">Alan Levine/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>Teicholz claims the committee ignored many studies of low-carbohydrate diets. But, as the report notes, most have been small, short-term, often pilot or case-control studies that rely on subjective recall of information (both of which rate poorly as evidence). When you look at <a href="http://journals.plos.org/plosone/article?id=10.1371/journal.pone.0100652">published trials</a> of such diets being undertaken for six months, there’s little difference in weight-loss outcomes compared to more balanced approaches.</p>
<p>Teicholz accepts that effects of low-carb diets are not maintained in the long term but defends them with reference to only <a href="http://www.ncbi.nlm.nih.gov/pubmedhealth/PMH0056190/">one meta-analysis of stricter low-carb diets</a>. It’s an odd choice since the authors include “grey” literature, which is not peer reviewed, and comes from organisations outside of academic publishing channels. Her chosen study also concludes that, in the long term, and when compared with conventional therapy, results of even strict low-carb diets appear to be of little clinical significance. </p>
<p>Had the advisory report made recommendations on this basis, Teicholz would have a valid complaint.</p>
<h2>Eat food, not nutrients</h2>
<p>The <a href="https://theconversation.com/eat-food-not-nutrients-why-healthy-diets-need-a-broad-approach-45823">food sources</a> for fats or carbohydrates matter; talking in broad terms of these macronutrients fails to distinguish between healthy foods and junk foods. The main thrust of the advisory committee’s report is that diets <a href="http://www.ncbi.nlm.nih.gov/pubmed/24572039">should be focused on whole foods</a>, not specific nutrients. And that makes a lot of sense.</p>
<p>Consider this: bacon, lard, olive oil and nuts all contain saturated fat to some extent. Dietary patterns containing plenty of the latter two are linked to health benefits. As for the first two, back slowly away from the bookshop when anyone is trying to sell you on these being the keys to good health and weight loss. The report notes evidence showing benefits for dietary patterns that favour olive oil and nuts.</p>
<p>Teicholz is not the only one to complain about the committee’s report. Nor is this anything new. Dietary guidelines produced in other countries, <a href="https://www.nhmrc.gov.au/guidelines-publications/n55">including Australia</a>, also attract mud-slinging. Sadly, this serves to confuse the public and leads some to abandon advice because “experts are always changing their minds”.</p>
<p>So it’s not surprising that lobbyists for the sugar and meat industries as well as companies marketing junk foods <a href="http://blog.aicr.org/2015/06/25/lobbyists-move-to-weaken-the-dietary-guidelines-help-us-protect-them/">have been vocal</a> about the US report. It’s just a pity that a reputable journal such as the BMJ decided to publish such an article from a journalist rather than an expert scientific appraisal.</p><img src="https://counter.theconversation.com/content/48007/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>National dietary guidelines have become an easy target for those looking for a scapegoat for bad diets in rich countries. And a BMJ article about draft US guidelines adds further fuel for the fire.Rosemary Stanton, Nutritionist & Visiting Fellow, UNSW SydneyTim Crowe, Associate Professor in Nutrition, Deakin UniversityLicensed as Creative Commons – attribution, no derivatives.