It became very clear this month that Amazon wants to dominate your dinner table.
Just ahead of Blue Apron's much-anticipated IPO, Amazon announced it would acquire Whole Foods for as much as $13.7 billion, leading the New York City meal-kit startup to slash its share prices. This week, the Seattle-based e-commerce giant began selling its own Amazon Fresh meal kits for members of the Prime subscription service. That doesn't even scratch the surface of the seismic changes for which small Whole Foods suppliers are girding with the organic grocer's new owner.
But a closer look at the company's history, during which it has acquired or invested in more than 129 companies, suggests that its foray in pre-measured food has long been in the works--and its hardly the only industry that should be worried.
Back in 1999, Amazon--then four years old--funneled as much as $42.5 million in the Seattle-based HomeGrocer.com, among the first online grocery delivery companies, in return for a 35 percent equity stake. Amazon's then-vice president for product development, David Risher, also joined HomeGrocer's board of directors.
While Amazon no longer maintains its stake in the company, its interest in food--and meal kits, more specifically--was confirmed. "The HomeGrocer.com team is literally changing the lives of customers by taking the drudgery out of grocery shopping," Amazon CEO Jeff Bezos said at the time. "Their shoppers pick out better produce than I could pick for myself," he added, a sentiment that echoes the company's description for its new trademark service, "We do the prep. You be the chef."
If you had been paying attention, you would have seen this coming long ago, suggest analysts. "Amazon's acquisition strategy is often about adjacent businesses," said Sucharita Mulpuru, an independent e-commerce analyst. "It helps them get into new spaces that they couldn't get into on their own." She points out that back in the 1990s, Amazon likely recognized the challenging unit economics that grocery presented, which may have kept them from acquiring the company outright. "They were probably thinking that they would do grocery at some point," she says.
Based on this thinking, you would have also seen Prime Video long ago. In 1998, Amazon bought the film and TV database company iMDB, which was started as a pet project eight years earlier by a U.K.-based cinephile and computer programmer, Colin Needham. (Needham would continue running the company under Bezos.) Eight years later, in 2006, Amazon officially launched its video streaming service. Then, in 2010, it launched its own production studio--which now makes award-winning films and television shows, such as Manchester by the Sea and Transparent.
So which other industry (or industries) is next on Amazon's agenda?
The tea leaves would indicate that pharmaceuticals could be next for the mammoth retailer. The same year that Amazon acquired iMDB, it also invested in a nascent prescription drug service, called Drugstore.com. It bought a 40 percent stake in the company, which at the time made it the largest shareholder--though its stake was down to 12 percent by the time Walgreens purchased the company for $429 million. "There are a lot of differences between books and drugstores," Bezos had said of the Drugstore.com investment, "but there are a lot of similarities, too. Customers want selection, convenience, price, and information."
Indeed, analysts have said that they wouldn't be surprised if Amazon brought pharmacies to its new Whole Foods locations in the coming months, in an effort to break into the $400 billion market. For the last several years, the company has reportedly held at least one annual meeting at its Seattle headquarters to discuss whether and how to approach the industry. Amazon is now looking to hire a general manager to help lead these efforts, CNBC first reported in May, as more consumers are electing to pay for healthcare.
Then there's the investment in Pets.com in 1999. So in addition to selling chew toys and collars, online pet-boarding might also be on Amazon's radar soon enough.