WEBVTT - John Mackey 0:00:00.440 --> 0:00:03.920 This is Bloomberg Best. Bloomberg Best is about the insight 0:00:04.120 --> 0:00:06.480 and the context that we get from our guests. It's 0:00:06.519 --> 0:00:07.880 a great way to catch up on some of the 0:00:07.920 --> 0:00:10.520 stories you might have missed on the Bloomberg stories you're 0:00:10.560 --> 0:00:14.600 not going to find in any other news organizations. Bloomberg 0:00:14.720 --> 0:00:18.440 Best Bloomberg's Best stories of the week, powered by twenty 0:00:18.520 --> 0:00:21.320 seven hundred journalists and ennalysts in more than a hundred 0:00:21.320 --> 0:00:24.320 twenty countries around the world. I met Baxter and I'm 0:00:24.360 --> 0:00:28.080 Denease Pelly Green. On this weekend edition of Bloomberg Best. 0:00:28.320 --> 0:00:32.360 I had my food awakening where I really understood for 0:00:32.400 --> 0:00:35.200 the first time that what you a affected how you felt. 0:00:35.520 --> 0:00:39.360 John McKee, CEO of All Foods, asked my girlfriend living 0:00:39.400 --> 0:00:41.440 in the cow off whe her we ought to start 0:00:41.479 --> 0:00:44.200 up our own little store, and she said she thought 0:00:44.240 --> 0:00:47.240 that would be a lot of fun cool the birth 0:00:47.360 --> 0:00:50.960 of the nation's biggest natural foods change turned out there 0:00:51.280 --> 0:00:53.920 it wasn't just selling food to hippies, and how it 0:00:53.960 --> 0:00:56.960 turned out to be so much bigger. All this and 0:00:57.080 --> 0:00:59.880 more coming up in the next hour of Bloomberg Best. 0:01:02.200 --> 0:01:04.600 All right, I want to get right to it, because 0:01:04.600 --> 0:01:12.240 what a story let's go back now to Austin, Texas. Yeah, 0:01:12.280 --> 0:01:15.600 and David Rubinstein asked John Mackie what propelled him to 0:01:15.640 --> 0:01:19.760 start Safer Way and then Whole Foods after dabbling at 0:01:19.800 --> 0:01:22.160 being a college student. And here's what Mackie said on 0:01:22.200 --> 0:01:26.240 the David Rubinstein Show Peer to Peer Conversations. What propelled 0:01:26.280 --> 0:01:28.640 you to start Safer Way and then Whole Foods. I mean, 0:01:28.640 --> 0:01:30.560 you were at the University of Texas, and did you 0:01:30.680 --> 0:01:33.319 drop out to do this? I dropped out of school 0:01:33.400 --> 0:01:36.480 like six times. I've got a hundred twenty hours of electives. 0:01:36.520 --> 0:01:38.800 I just study whatever I was interested in. But I 0:01:38.800 --> 0:01:41.600 did not drop out to start this company. I was 0:01:41.840 --> 0:01:44.440 living in a vegetarian co op when I was twenty 0:01:44.480 --> 0:01:48.000 three years old, and that's when I had my food awakening, 0:01:48.680 --> 0:01:51.360 where I really understood for the first time that what 0:01:51.520 --> 0:01:55.120 you ate affected how you felt and your health and 0:01:55.160 --> 0:01:58.160 your longevity. And then I became the food buyer at 0:01:58.160 --> 0:02:01.000 that co op. And then I went to work for 0:02:01.040 --> 0:02:03.480 a small natural food store in Austin, and I had 0:02:03.480 --> 0:02:05.800 found the purpose of my life. I was on fire 0:02:05.960 --> 0:02:09.840 for healthy eating, organic and natural foods. Came home one 0:02:09.919 --> 0:02:12.519 day and asked my girlfriend living in the co op 0:02:12.639 --> 0:02:15.160 whetherr we ought to start up our own little store, 0:02:15.360 --> 0:02:17.680 and she said she thought that would be a lot 0:02:17.720 --> 0:02:22.320 of fun. Cool and uh. Six months later, we'd raised 0:02:22.440 --> 0:02:26.840 forty dollars from friends and family and we found a location, 0:02:26.880 --> 0:02:29.440 a small store location in Austin, and we were in business. 0:02:29.880 --> 0:02:32.040 So when you started the company, though, did you have 0:02:32.200 --> 0:02:35.120 the vision of building a global or national company or 0:02:35.120 --> 0:02:36.680 did you just say I'll do a couple of stores. 0:02:36.720 --> 0:02:40.640 What was your original vision? Original vision was to break even. 0:02:41.880 --> 0:02:43.960 We were losing the month when we started out. The 0:02:44.000 --> 0:02:47.680 first year, we raised forty dollars in capital. We managed 0:02:47.720 --> 0:02:49.880 to lose twenty three thousand of it, so we were 0:02:49.919 --> 0:02:52.560 lucky to survive. We did much better in the second year, 0:02:53.120 --> 0:02:56.560 relocated two Whole Foods. No, we had no grand vision. 0:02:56.880 --> 0:02:59.680 The best way to understand it is we were just 0:02:59.760 --> 0:03:03.840 passion and about selling natural, organic foods. There was no 0:03:03.960 --> 0:03:06.720 we weren't. We weren't. We didn't take any business classes. 0:03:07.280 --> 0:03:11.000 We we didn't have we weren't NBA's. We just were passionate. 0:03:11.320 --> 0:03:13.520 We were on five. We were young. I was twenty 0:03:13.680 --> 0:03:15.720 four years old when we started the first store. Renee 0:03:15.800 --> 0:03:19.600 was twenty, so we were just having an adventure. We 0:03:19.600 --> 0:03:21.840 were we were playing and having a grocery store. It 0:03:21.880 --> 0:03:24.160 was so much fun. And then and then we started 0:03:24.240 --> 0:03:26.320 learning business and we've got pretty good at it, and 0:03:26.320 --> 0:03:28.840 then we started to grow it. I will tell you 0:03:28.800 --> 0:03:30.560 a story, David. So when we did our I p O. 0:03:31.960 --> 0:03:34.520 You know, one of the things that the investors want 0:03:34.520 --> 0:03:36.440 to know. They're trying to build a model of your company, 0:03:36.560 --> 0:03:38.520 so they want to know what's the potential. How big 0:03:38.560 --> 0:03:41.160 could it be. We had twelve stores when we I 0:03:41.240 --> 0:03:44.040 p O. And I thought, I think we could sunday 0:03:44.040 --> 0:03:47.680 have a hundred stores, and uh, you know, we might 0:03:47.720 --> 0:03:50.040 even someday, we might even be able to do maybe 0:03:50.080 --> 0:03:52.800 maybe a billion dollars in sales. Someday someday we could 0:03:52.840 --> 0:03:55.520 have that. And they weren't. They weren't that impressed with that. 0:03:55.560 --> 0:03:58.040 They didn't think that was gonna be that bigger company. 0:03:58.280 --> 0:04:00.680 And of course, you know, we're doing twenty billion in 0:04:00.760 --> 0:04:03.920 sales now, I would have five twenty stores or thereabouts. 0:04:04.080 --> 0:04:07.480 So I was very wrong about the upward potential of 0:04:07.480 --> 0:04:10.760 the business at the time. Um, when you were doing 0:04:10.760 --> 0:04:14.000 this in seventy eight. In the early eighties was natural 0:04:14.080 --> 0:04:17.280 food and well known as what natural food was organic foods. 0:04:17.279 --> 0:04:19.680 What what we're what weren't the view of them. Then 0:04:20.200 --> 0:04:22.680 when we were trying to raise venture capital money, I 0:04:22.720 --> 0:04:26.360 mean only we had three venture capitalists and invested, and 0:04:26.400 --> 0:04:29.080 we had a dozen or more turned this down. And 0:04:29.120 --> 0:04:32.240 I remember one of the guys turning me down saying, yeah, 0:04:32.279 --> 0:04:34.159 I don't think this business has much of a future. 0:04:34.200 --> 0:04:36.120 I don't know why he felt so motivated to tell 0:04:36.120 --> 0:04:38.040 me why he wasn't going to invest, because usually they 0:04:38.120 --> 0:04:40.719 just say we're not interested. But he said, I want to. 0:04:40.839 --> 0:04:42.919 I want to explain to you. And he said, you 0:04:42.960 --> 0:04:45.320 guys are just a bunch of hippies and you're selling 0:04:45.360 --> 0:04:48.640 food to other hippies. I ran into that guy like 0:04:48.760 --> 0:04:50.800 eight years later. He told me that was the biggest 0:04:50.839 --> 0:04:54.080 mistake he'd ever made in his venture capital career. Turned 0:04:54.080 --> 0:04:56.800 out that it wasn't just selling food to hippies, that 0:04:57.160 --> 0:05:00.000 it caught on in the in the upper middle class 0:05:00.080 --> 0:05:02.239 US and then and then it spread from there and 0:05:02.240 --> 0:05:05.599 and uh and yeah, the rest is history. As I say, So, 0:05:05.680 --> 0:05:07.919 when you dropped out of college, did you say to 0:05:07.960 --> 0:05:11.920 your father, I'm gonna be like Mark Zuckerberg er Bill Gates, 0:05:12.120 --> 0:05:13.800 and I'm gonna build a big company, and did he 0:05:13.880 --> 0:05:15.720 have a lot of confidence in here to do that? Well. 0:05:15.760 --> 0:05:19.400 Mark Zuckerberg wasn't alive when I started the company. Saw 0:05:19.480 --> 0:05:21.640 he wouldn't have referred to him. And Bill Gates was 0:05:21.720 --> 0:05:24.360 just started Microsoft two years before I started a safer way, 0:05:24.600 --> 0:05:28.159 so my dad had never heard about UM. My dad 0:05:28.200 --> 0:05:31.839 was very supportive. Uh. He he was just wanted his 0:05:31.880 --> 0:05:34.320 son to do something. He was passionate about that. I 0:05:34.400 --> 0:05:36.640 really he could see I was very excited about this. 0:05:36.760 --> 0:05:39.559 So he was actually very supportive. In the early years, 0:05:39.560 --> 0:05:41.800 he helped you somewhat as an accounting professor. He gave 0:05:41.839 --> 0:05:45.320 you some advice. My dad was my mentor. Uh, since 0:05:45.360 --> 0:05:48.080 I didn't have that business background. I always say that 0:05:48.160 --> 0:05:50.960 from the year of nineteen seventy eight to nineteen ninety four, 0:05:51.560 --> 0:05:53.760 I never made a move at Whole Foods without checking 0:05:53.760 --> 0:05:58.280 with my dad. In nineteen four, I turned forty years old, 0:05:58.560 --> 0:06:02.039 and uh, we'd gone public two years before, and my 0:06:02.160 --> 0:06:04.599 dad was now wealthy, you know, on pay per pose 0:06:04.920 --> 0:06:07.680 with the wholefing stock that he had bought, and he 0:06:07.720 --> 0:06:10.400 wanted to hold onto what he had, and I wanted 0:06:10.400 --> 0:06:12.640 to grow the business. I just saw, we can really 0:06:12.680 --> 0:06:15.520 grow this thing. And so we had to. We used 0:06:15.480 --> 0:06:17.560 to fighting our board meetings. We were screaming each other 0:06:17.600 --> 0:06:20.360 at public board meetings. And finally I said, Dad, here, 0:06:20.440 --> 0:06:21.680 here's what I want you to do. I want you 0:06:21.720 --> 0:06:24.360 to sell half of your stock tomorrow. I'm firing. I 0:06:24.400 --> 0:06:26.640 don't want you on the board anymore. I want you 0:06:26.680 --> 0:06:29.279 to sell half your stock tomorrow and take the other 0:06:29.320 --> 0:06:31.680 half and leave it in the company because we're gonna 0:06:31.720 --> 0:06:34.160 grow Whole Foods. It's gonna be a big enterprise someday. 0:06:34.480 --> 0:06:36.479 So he did that, very took my advice, sould half 0:06:36.520 --> 0:06:38.640 the stock the next day. He was very hurt. His 0:06:38.680 --> 0:06:41.120 feelings were hurt. I remember him telling me. I said, 0:06:41.120 --> 0:06:43.360 I'm forty years old. I'm ready to run the company 0:06:43.360 --> 0:06:46.920 by myself without you, And he said, forty years old. 0:06:47.240 --> 0:06:51.279 You don't know anything. You're only forty, you know. It 0:06:51.320 --> 0:06:52.960 turned out he was right. I didn't know very much 0:06:53.000 --> 0:06:54.880 when I was forty. I know a lot more today 0:06:54.920 --> 0:06:57.400 and I knew then. But he was wrong about the 0:06:57.400 --> 0:07:00.160 potential growth of Whole Foods because the company took up 0:07:00.160 --> 0:07:02.159 after that, and he made a lot more money on 0:07:02.200 --> 0:07:05.240 that half that he kept in. So when you're growing 0:07:05.240 --> 0:07:07.440 the company and making it a national company in a 0:07:07.480 --> 0:07:10.480 well known brand. Was the biggest problem that people still 0:07:10.520 --> 0:07:13.720 weren't convinced that natural foods and organic foods were good 0:07:13.760 --> 0:07:15.800 for you. Was it that the price you had to 0:07:15.880 --> 0:07:18.880 charge was somewhat more expensive than that's a safe way, 0:07:19.000 --> 0:07:20.360 or was it the safe ways of the world that 0:07:20.400 --> 0:07:21.800 we're gonna compete with you and they were gonna have 0:07:21.880 --> 0:07:24.760 organic foods, or it was just getting cash from investors 0:07:24.760 --> 0:07:27.280 to help you grow. What were the biggest problems. The 0:07:27.320 --> 0:07:32.239 biggest problem was the limitation of the marketplace. Initially because 0:07:32.760 --> 0:07:36.720 it's a consciousness thing. So if when we opened up 0:07:36.720 --> 0:07:40.720 in a hip area where he had a lot of uh, 0:07:41.040 --> 0:07:44.600 younger sort of counterculture people the store or bohemian people, 0:07:44.640 --> 0:07:47.240 the stores would take off from the very beginning. But 0:07:47.360 --> 0:07:50.120 we when we went into suburb, like when we opened 0:07:50.120 --> 0:07:53.800 a store in in Greenville Avenue in Dallas, it took off. 0:07:54.320 --> 0:07:57.400 But when we went up to Richardson, a suburb North Dallas. 0:07:57.880 --> 0:08:01.760 Back this, it was really slow. The stores started really slow. 0:08:02.000 --> 0:08:05.160 The suburban stores just didn't have enough what we'd call 0:08:05.240 --> 0:08:09.040 natural food consciousness to really be successful. It took us 0:08:09.160 --> 0:08:14.040 years to grow those those businesses. Now, when whole Foods 0:08:14.080 --> 0:08:16.440 came along and it was very popular in many areas. 0:08:16.600 --> 0:08:19.960 It became known in some circles as whole paychecked. I'm 0:08:19.960 --> 0:08:23.280 sure you've heard that before, and so that the implication 0:08:23.400 --> 0:08:26.440 was that your prices were expensive. But um, I assume 0:08:26.480 --> 0:08:29.120 that your responses. But you're selling higher quality or more 0:08:29.200 --> 0:08:33.160 complicated things, and your prices are not a big drag 0:08:33.240 --> 0:08:35.240 on your overall ability to get people to come into 0:08:35.280 --> 0:08:38.199 the store. Is that right. It's a it's a very 0:08:38.200 --> 0:08:40.280 good question, of course, I do hear that all the time, 0:08:40.320 --> 0:08:43.520 and it's it's it's a little bit of a complex answer. 0:08:43.640 --> 0:08:48.040 So for most of our history, in the forty year history, 0:08:48.200 --> 0:08:51.920 we probably only got serious competition in the last fifteen years. 0:08:51.920 --> 0:08:54.520 So the first twenty five years we existed, very few 0:08:54.520 --> 0:08:58.599 people sold the same products that we sold, so um, 0:08:58.640 --> 0:09:00.880 there was no big deal. But then as we got 0:09:00.880 --> 0:09:04.079 more successful, we got more competition. And one of the 0:09:04.120 --> 0:09:06.880 ways they competed with us was to undercut us in price. 0:09:07.559 --> 0:09:09.440 And of course, one of the things Whole Foods knows 0:09:09.480 --> 0:09:10.800 it needs to do is it needs to meet the 0:09:10.800 --> 0:09:14.400 competitive marketplace in terms of price, and that is one 0:09:14.400 --> 0:09:16.599 of the reasons we wanted to merge or sell the 0:09:16.679 --> 0:09:21.240 Amazon is. Jeff and his team think long term. So 0:09:21.920 --> 0:09:24.240 it was gonna be very difficult for us to lower 0:09:24.280 --> 0:09:27.680 our prices and hold on to our company because it 0:09:27.720 --> 0:09:30.360 was when you lower prices initially, it actually hurts your 0:09:30.400 --> 0:09:33.200 sales and hurt your profitability. Something you were selling for 0:09:33.200 --> 0:09:35.840 a dollar now you're selling for ninety cents, So it 0:09:35.880 --> 0:09:38.720 looks like your business is declining. Now you'll get it 0:09:38.760 --> 0:09:41.880 back over time as people realize that they get better prices. 0:09:42.120 --> 0:09:45.559 But it's a painful transition. Now with Amazon, we've already 0:09:45.600 --> 0:09:49.000 dropped our prices three times and we're gonna keep dropping them, 0:09:49.040 --> 0:09:51.480 so Amazon is, and that that's another great benefit of 0:09:51.480 --> 0:09:53.480 the merger for us. We are getting more and more 0:09:53.520 --> 0:09:56.640 price competitive, and Amazon is willing to be patient and 0:09:56.720 --> 0:10:00.640 let that play out over time. So a couple of 0:10:00.679 --> 0:10:03.160 years ago, you had, as you wrote in your in 0:10:03.160 --> 0:10:06.600 your book on Conscious Leadership, I hedge fund, kind of 0:10:06.640 --> 0:10:09.439 an activist Hedge fund came along and they were agitating 0:10:09.440 --> 0:10:12.200 for a higher price, and ultimately you looked at some 0:10:12.240 --> 0:10:14.360 about alternatives and one of them that seemed the best 0:10:14.440 --> 0:10:17.640 was selling the Amazon. Is that right, that's correct. We 0:10:17.720 --> 0:10:22.439 had the activists Investor's Janna partners wanted to. I met 0:10:22.480 --> 0:10:24.960 with them and they basically said, we're gonna take over 0:10:25.000 --> 0:10:28.120 your board and and we're gonna throw you out. We're 0:10:28.120 --> 0:10:30.760 gonna sell the company, So why don't you just save 0:10:30.840 --> 0:10:33.320 us all a lot of a lot of anguish and 0:10:33.400 --> 0:10:36.959 just let's just agree to do that. So, of course 0:10:37.520 --> 0:10:40.560 we we didn't want to sell the company uh to 0:10:40.640 --> 0:10:42.720 the highest bidder, and we had to think about our 0:10:42.720 --> 0:10:46.720 different alternatives. So one was going private potentially. Another one 0:10:46.840 --> 0:10:49.280 was to put the company in friendly hands like we 0:10:49.360 --> 0:10:53.360 contacted Warren Buffett for example. Another one was to maybe 0:10:53.360 --> 0:10:58.240 fight Janna and fight to maintain control. And then as 0:10:58.280 --> 0:11:00.000 I was trying to think about what the best solution 0:11:00.040 --> 0:11:02.760 and was, one morning I woke up. I just woke 0:11:02.840 --> 0:11:05.560 up and it popped in my brain, what about Amazon? 0:11:06.080 --> 0:11:09.600 What about Amazon? I've met Jeff a year before, really 0:11:09.600 --> 0:11:14.920 admired him, still do. I thought these guys would be perfect. 0:11:15.120 --> 0:11:17.600 I've heard they want to get into grocery business. This 0:11:17.640 --> 0:11:20.160 would be a good opportunity for them to get into it. 0:11:20.679 --> 0:11:24.560 Their technology could help Aul foods. So we contacted Amazon. 0:11:25.200 --> 0:11:27.440 A couple of days later, we flew up to Seattle 0:11:27.480 --> 0:11:30.200 and met with Jeff and his team. We had an 0:11:30.240 --> 0:11:34.040 amazing first conversation lasted about three hours. It was like 0:11:34.080 --> 0:11:36.559 we were finishing each other sentences, all the things we 0:11:36.600 --> 0:11:40.640 could do together. We got super excited. Just a few 0:11:40.720 --> 0:11:42.760 days after that, they sent a whole team to Austin 0:11:42.800 --> 0:11:46.600 to continue the conversations. Six weeks after that first meeting, 0:11:46.640 --> 0:11:49.920 we signed a merger agreement. We negotiated the price, signed 0:11:49.920 --> 0:11:52.400 the mergery agreement, and and we were we were on 0:11:52.440 --> 0:11:55.520 our way. So every acquisition looks great at the time 0:11:55.520 --> 0:11:57.640 you do him. Now you've had a couple of years 0:11:57.679 --> 0:11:59.760 behind you. Is it working out? And are you happy 0:11:59.800 --> 0:12:02.040 with you know? The metaphor I like to use for 0:12:02.080 --> 0:12:06.160 a merger is it's uh, it's like a marriage, particularly 0:12:06.240 --> 0:12:09.640 between big companies. So we had to love at first 0:12:09.679 --> 0:12:12.480 sight in a whirlwind romance. It's a fair question to ask, 0:12:12.480 --> 0:12:15.520 how's that working out now? It's about three years later now, 0:12:15.720 --> 0:12:20.040 as a matter of fact, and is it perfect? You know? No, 0:12:20.240 --> 0:12:22.320 It's like I I sometimes say when people ask me 0:12:22.360 --> 0:12:24.960 this question, I said, you know, do I love absolutely 0:12:25.000 --> 0:12:27.600 everything about my wife? I've been I've been married thirty 0:12:27.679 --> 0:12:32.080 years and the answer is no, I love about nine percent. 0:12:32.160 --> 0:12:34.360 But it's two percent that you know it really bothers me, 0:12:35.080 --> 0:12:36.959 And I'd say it's kind of similar with Amazon. Do 0:12:37.040 --> 0:12:39.480 we love everything about Ama? There's about two percent we 0:12:39.520 --> 0:12:42.800 know love, but we love almost everything. Is pretty good. 0:12:42.840 --> 0:12:45.880 That's a pretty good marriage. And in Amazon, the merger 0:12:45.920 --> 0:12:47.720 is working out great for us. We're a much better 0:12:47.760 --> 0:12:51.520 company today than we were pre Amazon. So Amazon is 0:12:51.559 --> 0:12:54.600 about getting people to buy things and ship into their home. 0:12:55.040 --> 0:12:57.360 You've been about getting people to come into your stores 0:12:57.640 --> 0:12:59.320 and buy a lot of things that they might see 0:12:59.320 --> 0:13:02.000 while they're walking around. So is that a different kind 0:13:02.040 --> 0:13:04.200 of culture and how has it worked out in that respect? 0:13:04.640 --> 0:13:09.480 There's overlapping the cultures. We're both very customer focused. There 0:13:09.480 --> 0:13:11.400 are difference in cultures. But one of the things that 0:13:11.440 --> 0:13:14.920 Amazon has done, which has been fantastic and one reason 0:13:14.920 --> 0:13:18.679 the mergers worked well, they respect our culture. They're not 0:13:18.720 --> 0:13:21.880 trying to change our culture. Now our culture is changing 0:13:22.280 --> 0:13:26.120 because we're taking on lots of attributes that Amazon has 0:13:26.200 --> 0:13:28.600 and that has a change in our culture. But they're 0:13:28.600 --> 0:13:32.200 not forcing us to coercing us. We're doing it voluntarily 0:13:32.559 --> 0:13:37.240 to make our company better. So that's why we're evolving. 0:13:37.760 --> 0:13:41.560 But I think in a healthy constructive way. People ask me, hey, John, 0:13:41.559 --> 0:13:42.920 if you could do it all over again, would you 0:13:42.920 --> 0:13:45.240 make the same decision, And the answers, yes, we make 0:13:45.280 --> 0:13:47.640 the exact same decision. So I know, whenever I go 0:13:47.720 --> 0:13:49.800 to Whole Foods, which is about a mile from my house, 0:13:49.840 --> 0:13:52.240 and I go there very frequently, they always asked me, 0:13:52.280 --> 0:13:54.679 are you a Prime Member? So it's being Prime helped 0:13:54.679 --> 0:13:59.120 a lot in your business. The Prime Membership club. High 0:13:59.120 --> 0:14:01.560 percentage of our custom as our Prime members, and so 0:14:01.679 --> 0:14:04.160 they like that. Now there is a minority of customers 0:14:04.200 --> 0:14:06.760 who are not and and of course every time they 0:14:06.800 --> 0:14:08.720 get asked with their prime member, of course they don't 0:14:08.760 --> 0:14:13.800 necessarily like that. They keep, you know, getting asked that question. Um. 0:14:13.920 --> 0:14:18.000 But on balance, remember the majority of our transactions are 0:14:18.000 --> 0:14:20.720 coming from Prime members, so that's been that's been a 0:14:20.720 --> 0:14:24.280 good thing for them. They're getting better prices and better deals. 0:14:24.760 --> 0:14:27.320 The main way Amazon's health Toll Foods though, is technology. 0:14:27.680 --> 0:14:32.160 I mean, particularly now with Covid, the amount of deliveries 0:14:32.560 --> 0:14:35.160 that we're doing and pick up store pickups and deliveries, 0:14:35.640 --> 0:14:37.840 I mean it's triple in the last year. I mean, 0:14:37.880 --> 0:14:40.880 we're doing a large percentage of our business online now 0:14:41.120 --> 0:14:43.960 and we didn't really have a small percentage before Amazon 0:14:45.120 --> 0:14:48.360 acquired US. So let's talk about COVID for a moment um. 0:14:48.400 --> 0:14:52.040 And COVID came, many people are worried that retail stores 0:14:52.080 --> 0:14:55.000 would have to shut down, but actually food retail stores 0:14:55.040 --> 0:14:57.080 have benefit, and you could argue because people need to 0:14:57.120 --> 0:14:59.080 eat a lot more, I guess, or at least to 0:14:59.120 --> 0:15:01.480 going to the buy staples. What was it like to 0:15:01.480 --> 0:15:04.160 manage under COVID at the outset. So the main thing 0:15:04.200 --> 0:15:07.480 to understand is almost all food retailer sales are up, 0:15:07.520 --> 0:15:11.000 primarily because restaurants sales are down so much. Right, people 0:15:11.040 --> 0:15:13.200 aren't eating out as much, so they're eating at home 0:15:13.320 --> 0:15:16.800 more and that's been good for pretty much all food retailers. 0:15:17.120 --> 0:15:19.320 That's been good for whole foods as well. Maybe a 0:15:19.400 --> 0:15:21.320 little bit less good for us because we do a 0:15:21.360 --> 0:15:23.760 lot of prepared foods in our stores, and so that's 0:15:23.800 --> 0:15:26.480 way down. People are not going to our salad bars, 0:15:26.800 --> 0:15:30.240 are hot food bars, they're they're not going in our 0:15:30.280 --> 0:15:32.560 offices are shut down around our stores, so we're not 0:15:32.600 --> 0:15:35.640 getting that traffic that we used to get in. But 0:15:36.200 --> 0:15:39.080 on the other hand, overall sales are up substantially because 0:15:39.280 --> 0:15:41.560 everything else is up so much as it made the 0:15:41.600 --> 0:15:44.480 way you're going to manage in the future different. Again, 0:15:44.520 --> 0:15:48.080 it helps us tremendously for being online sales and so 0:15:48.480 --> 0:15:50.840 and that will continue. I don't well ever, when we 0:15:50.880 --> 0:15:53.040 won't go back to Once people get a taste of that, 0:15:53.360 --> 0:15:56.400 they like it in Amazon if you're Prime member, delivery 0:15:56.480 --> 0:15:59.560 is free. So I think that's gonna be a permanent 0:15:59.600 --> 0:16:03.320 shift for many people. You know. The hardest thing about 0:16:03.360 --> 0:16:06.920 managing the business now it's it's there's an element of fear. 0:16:07.680 --> 0:16:11.000 Right people are scared of the virus. Everybody's masked up. 0:16:11.080 --> 0:16:14.160 We would require mask for all of our team members 0:16:14.160 --> 0:16:17.400 and all customers in those masks. If you're I'm in Austin. 0:16:17.400 --> 0:16:19.360 It's a hundred degrees outside right now and we're in 0:16:19.400 --> 0:16:22.560 a mask around is not not very fun or pleasant 0:16:22.600 --> 0:16:26.600 thing to do. Um and people have been shut down 0:16:26.600 --> 0:16:28.320 in their homes and that's you know, we see what's 0:16:28.360 --> 0:16:31.040 happening is unrest around the country. So it's been a 0:16:31.120 --> 0:16:33.320 hard This is this is I don't know about you, 0:16:33.360 --> 0:16:36.120 but I'd have to say is the weirdest year of 0:16:36.120 --> 0:16:38.320 my entire life. When you go to a Whole Foods 0:16:38.320 --> 0:16:40.480 anywhere in the country, you have at five hundred stores 0:16:40.560 --> 0:16:43.120 or so in the country. Now, I assume you're instantly 0:16:43.160 --> 0:16:45.080 recognized to have a picture of you there when you 0:16:45.120 --> 0:16:47.080 walk in, so they know who you are. Now I 0:16:47.120 --> 0:16:49.400 go in, I'm wearing a mask, nobody knows who I am. 0:16:49.400 --> 0:16:52.200 I'm I'm gonna have a perfect disguise, but no, they've 0:16:52.200 --> 0:16:55.640 recognized me, mostly because they know I'm coming. Generally, I 0:16:56.840 --> 0:17:00.280 do some surprises, it's occasionally, and it's just I get 0:17:00.280 --> 0:17:02.440 recognized very quickly. So when you go in and you 0:17:02.760 --> 0:17:04.720 if you say, well, this is not set up the 0:17:04.800 --> 0:17:06.760 right way, or you should charge something different, that they 0:17:06.760 --> 0:17:08.520 listen to you. You know what I've learned, David, I've 0:17:08.600 --> 0:17:11.679 learned painfully that, uh, whether I like it or not, 0:17:11.800 --> 0:17:15.080 I'm the father of Whole Foods, and the team members 0:17:15.480 --> 0:17:18.720 really want Dad to love the story. So I've learned 0:17:18.760 --> 0:17:22.720 to to sort of moderate my criticisms because they really 0:17:22.760 --> 0:17:24.640 tried to make the store look good because he knew 0:17:24.640 --> 0:17:27.679 I was coming. So I just try to stay positive 0:17:27.720 --> 0:17:30.920 and connect with the people, and then maybe after I leave, 0:17:31.040 --> 0:17:34.159 I will tell the the leadership of the region, I 0:17:34.200 --> 0:17:36.760 didn't like this, this or this. You've built one of 0:17:36.800 --> 0:17:40.000 the most famous companies in the United States. But you don't. 0:17:40.040 --> 0:17:41.919 You don't own a lot of it relative to what 0:17:42.080 --> 0:17:43.880 some of the other founders of large companies have done. 0:17:43.920 --> 0:17:46.640 It does that make you, uh, lose sleep at night 0:17:46.720 --> 0:17:49.800 or you're okay with that? You know something I learned 0:17:49.800 --> 0:17:53.119 pretty early in life. One of the most destructive emotions 0:17:53.160 --> 0:17:56.679 there is in the world is envy. Envy will poison 0:17:56.760 --> 0:18:00.400 your soul. I learned to deal with envy of people 0:18:00.520 --> 0:18:02.480 envying me, and I learned to deal with my own 0:18:02.560 --> 0:18:06.520 envy a long time ago. And it's far better to 0:18:06.520 --> 0:18:10.280 to just be grateful. I've had an amazing life. I 0:18:10.320 --> 0:18:13.480 am a very wealthy man by any objective standard. So 0:18:13.520 --> 0:18:15.960 other people wealthier than me. There are other entrepreneurs have 0:18:16.000 --> 0:18:19.120 made more money. So what I mean? I have everything 0:18:19.119 --> 0:18:22.880 I need or could ever want. So agreed, and those 0:18:22.920 --> 0:18:26.399 things poison our souls, and so I have. There's no 0:18:26.440 --> 0:18:29.320 place for envy. I am happy for them. I'm happy 0:18:29.359 --> 0:18:32.960 that they've had successful lives, and uh, yeah, so have I. 0:18:33.200 --> 0:18:35.720 Life is good. In your book, you talk about the 0:18:35.720 --> 0:18:38.800 importance of a certain type of leadership where you are 0:18:38.880 --> 0:18:41.520 trying to be what you call a conscious leader, which 0:18:41.520 --> 0:18:44.280 is to say, worry about long term purpose of a company, 0:18:44.560 --> 0:18:48.719 not just profit. Is that right? Yes, I mean in 0:18:48.760 --> 0:18:52.800 the book we talked about purpose first. Put purpose first. 0:18:53.040 --> 0:18:56.400 That that Whole Foods has always been purpose driven since 0:18:56.440 --> 0:19:00.359 the very beginning. We always um, you know, wanted to 0:19:00.359 --> 0:19:02.680 make the world a better place and natural organic foods. 0:19:02.720 --> 0:19:05.960 You want to people lead healthy. And then what we 0:19:06.080 --> 0:19:09.160 learned over time is the importance of leading with love, 0:19:09.440 --> 0:19:12.040 to care about your people. And so we have a 0:19:12.119 --> 0:19:14.560 chapter about leading with love. And then we learned, of 0:19:14.560 --> 0:19:18.600 course the importance of integrity in business, in life in general. 0:19:18.640 --> 0:19:21.359 Integrity is so important. You have to be you have 0:19:21.400 --> 0:19:23.160 to do what you say. You have to be trustworthy, 0:19:23.160 --> 0:19:25.439 you have to be authentic, you have to be honorable, 0:19:25.800 --> 0:19:27.600 you have to have honor. When you talk a lot 0:19:27.640 --> 0:19:29.919 about the importance of culture and having a certain culture, 0:19:29.960 --> 0:19:32.880 you developed the Whole Foods culture. Has it changed under 0:19:32.920 --> 0:19:34.960 Amazon or you've been able to keep your culture? And 0:19:35.000 --> 0:19:38.480 what is that culture? Well, cultures are like living there 0:19:38.520 --> 0:19:43.200 like they're like living entities, and they change over time. 0:19:43.240 --> 0:19:46.960 They evolve. So yes that at mergers three years ago, 0:19:47.040 --> 0:19:50.120 our culture has evolved in the last three years. But 0:19:50.400 --> 0:19:53.880 culture comes from your values, it comes from your purpose. 0:19:54.280 --> 0:19:56.000 And it comes from the way you lead the company, 0:19:56.119 --> 0:19:59.480 what your leadership principles are. So Whole Foods cause of 0:19:59.600 --> 0:20:01.240 very healthy culture. We were named one of the Hunter 0:20:01.359 --> 0:20:04.639 Best Companies to work for for twenty consecutive years, and 0:20:05.280 --> 0:20:07.639