| THE MOST TRUSTED NEWS IN PRODUCE | CXXIV, NO. 29 | JULY 17, 2017 | THEPACKER.COM Though Whole Foods accepted Amazon’s bid for the company, six other firms had previously expressed interest in the organic retailer, SEC filings show. What’s inside ... Foodservice www.thepacker.com A Farm Journal Media publication July 17, 2017 Check out our Foodservice insert Pamela Riemenschneider Red, white and watermelon displays Retail, A2 Amazon had competition for Whole Foods By Ashley Nickle SIX COMPANIES , in-cluding two in the grocery industry, expressed interest in Whole Foods before Am-azon made its acquisition offer, according to a recent Securities and Exchange Commission filing. Amazon announced June 16 that it had agreed to buy Whole Foods for $13.7 bil-lion. About two months earlier, facing investor pres-sure to explore a sale, Whole Foods began hearing from numerous parties. Four private equity firms and two grocery industry companies — none of them named in the filing — ex-pressed interest. One of the grocery in-dustry companies indicated it wanted to explore a merg-er-of-equals transaction at a potential value of $35-40 per share. Such a deal would have required “substantial bor-rowing” and probably would not have been an all-cash transaction. Another industry com-pany approached Whole Foods about a more limited partnership, giving the ex-ample of a supply arrange-ment, but the two sides did not discuss the possibility of a merger or acquisition. AMAZON ENTERS Whole Foods had also been talking with Amazon, which made an offer in late May to acquire Whole Foods for $41 per share. The Whole Foods board of directors, at a subsequent meeting, decided not to so-licit competing bids from the private equity firms be-cause they likely could not match what Amazon was offering. Even so, Whole Foods made Amazon a counterof-fer at $45 per share. That response elicit-ed “disappointment” and had Amazon considering whether to even continue negotiating, according to the filing. Instead of disengaging to pursue other opportunities, however, Amazon made its final offer of $42 per share, cautioning Whole Foods that it would pursue alter-natives if Whole Foods did not accept promptly. Whole Foods accepted, and the deal is expected to be finalized by the end of the year. The 173-page proxy statement document that describes the negotiations also detailed Whole Foods’ rationale for accepting the proposal. Near the top of the list, Whole Foods noted the challenging grocery envi-ronment, mentioning that Kroger had recently low-ered its earnings guidance for that reason. STRUGGLES It also alluded to Lidl’s entry into the U.S. market and to retail alternatives like meal kit companies. Whole Foods also listed among its difficulties “in-creases in the offerings by other retailers of natural and organic products, which could create supply shortag-es and limit the company’s ability to source sufficient product for its stores.” P Blue Apron’s fizzling Opinion, A4 IN MEMORIAM: Strawberry industry loses Fritz Koontz People, A5 Survey explores how consumers shop for groceries on the web By Ashley Nickle MANY CONSUMERS do not browse when they shop for groceries online, a dy-namic that may be a challenge for retail-ers, a recent survey found. Search bars and order history take shop-pers directly to the items they plan on pur-chasing, and consumers are taking advantage. “In-store shoppers must necessarily move from one item to the next, browsing whether intentionally or not,” market re-search firm TrendSource said in its 2017 Grocery Industry Report. “This provides grocers with ample op-portunity to increase spend by strategically distributing promotions, similar items and impulse items throughout the store. The same is not true for many online shoppers.” Less than 15% of those surveyed said that browsing virtual aisles is their primary way to find items. Order history and the search bar were used most often. Participants deemed recommendations by retailers as least useful — unless the pric-Crown Jewels’ Torosian dies By Ashley Nickle ATOMIC TOROSIAN , managing partner of Fres-no, Calif.-based Crown Jewels Produce, died July 7 at the age of 67. Torosian was introduced to agricul-ture early, growing up on a farm in the San Joaquin Valley and TOROSIAN loading trucks with produce for 95 cents an hour as a 14-year-old, and he remained in the industry throughout his life. “Produce was truly his passion,” said longtime friend Keith Johnson, who works in business develop-ment for Fowler Packing. Torosian started Crown Jewels Marketing & Distri-bution LLC — later renamed Crown Jewels Produce — with Rob Mathias about 20 years ago. The company just really outwork anybody. “His big thing was he built relationships between the growers and the buyers,” Ted Torosian said. “I think that’s what set him apart was just building relationships.” Johnson, who was work-ing for Kroger when he first met Atomic and who knew him for more than 30 years, gave a similar account. “He was really a student of his growers and his custom-ers,” Johnson said. “He really was connected with people.” Johnson described Toro-sian as one of the best sales-men in produce because of those connections. Ted Torosian said several people have told him Atom-ic was “the LeBron James of the produce industry.” Johnson said Torosian’s lasting contributions include wise counsel — both profes-sional and personal — given to others in the industry. “He really guided and mentored and taught so many people in the industry,” Frost nips Michigan’s apple prospects Crops & Markets, A7 File photo According to TrendSource, shoppers who used local grocery delivery services were twice as likely to order perishables online than those using other online retailers. “Perhaps shoppers find comfort in know-ing their items are only traveling a short distance or perhaps they have more faith and trust in their familiar grocery vendors,” TrendSource said in the report. “Regardless, across produce, dairy, meat/ seafood, and baked goods, shoppers uti-lizing local grocery delivery options were twice as likely to order online.” TrendSource pointed to that behavior as Automation’s not a quick fix for labor woes Produce Tech, A10 ‘Across produce, dairy, meat/seafood, and baked goods, shoppers utilizing local grocery delivery options were twice as likely to order online.’ es on those items were lower than normal. “Sales are basically recommendations coupled with a lower price point, but shop-pers aren’t going to settle for half the deal,” TrendSource said in its report. “If you want them to take notice, you have to mark it down.” The survey found that shoppers are still much more willing to purchase dry goods online than they are to purchase perishables. However, consumers shopping online from their local grocer — as opposed to Amazon, Instacart, Jet or other third par-ties — were more willing to buy perishables. ‘He was really a student of his TrendSource growers and his customers.’ Keith Johnson, Fowler Packing markets items including grapes, Mexican vegetables, apples and pomegranates. Earlier in his career, Toro-sian worked as a produce buy-er for A&P. He also worked at Tri Produce and had his own venture, Sales King. “He had a tireless work ethic,” said his brother Ted Torosian, an owner of Cus-tom Produce Sales. “He’d Johnson said. “When Atomic spoke, everybody listened,” he said. “He was respected by all.” Torosian is survived by his wife of 47 years, Char-lene, their son Wyatt, and siblings Arlene, Max, Tara, Ted and Christine. A service was scheduled July 14 at Fresno’s Peoples Church. P Familar faces at New York Apple Association New York Produce, B4 a key reason that Amazon recently agreed to purchase Whole Foods for $13.7 billion. In addition, more than half of those surveyed, across age groups, said they prefer to order groceries online from a local store versus an online-only vendor. “Amazon has stepped right into a local footprint and there’s no telling what tricks it has up its sleeve now that it’s put its en-tire weight behind grocery delivery,” Trend-Source said in its report. “But for the time being, the opportunity is there to establish a beachhead in grocery delivery.” P What’s online ... The apple industry’s worried about steel re-strictions. Learn why at http://bit.ly/applesteel.