Amazon’s surprise deal to buy Whole Foods has set the grocery world spinning — with several players looking for a food delivery partner so it can better compete with a beefed-up Bezos machine, The Post has learned.
At the center of many conversations is FreshDirect, sources said.
The 17-year-old online grocer, whose ubiquitous trucks make deliveries throughout the Big Apple — as well as surrounding suburbs such as Philadelphia, Delaware and most recently Washington, DC — is the only company that’s figured out how to do what Amazon and Whole Foods are likely to accomplish as partners, say industry experts.
“The entire list of public and private companies would want to acquire FreshDirect, including Wegmans, Kroger, Costco, Walmart, Safeway and Target,” said retail consultant Burt Flickinger, managing director of Strategic Resource Group.
Even Amazon once looked at buying the privately held company when the online behemoth was launching its AmazonFresh business in New York several years ago, a food wholesale executive told The Post. “But FreshDirect wasn’t ready to cash in and run away,” said the executive.
That could change now.
“In the long run, a merged Amazon and Whole Foods is not good for FreshDirect,” said a source close to FreshDirect, adding that over the years big box chains such as Walmart, Target, Kroger and the Dutch conglomerate Ahold Delhaize, which owns Stop & Shop among others, have “made back channel overtures” to acquire FreshDirect.
Co-founder and Chief Executive Jason Ackerman, a former investment banker whose financier uncle, Peter Ackerman, is a major investor in FreshDirect, did not respond to calls for comment.
But FreshDirect, which relies primarily on its fleet of several hundred trucks, recently dipped its toes into Amazon’s territory with a service, FoodKick, that makes courier deliveries within an hour for last-minute meal items or packaged goods.
But it’s leap years away from competing with Amazon in speed and technology in any meaningful way, sources said.
“If I’m FreshDirect, I’m thinking about two things,” said David Tawil, president of Maglan Capital. “What can I do to prepare for a sophisticated attack that will have unlimited deep pockets and who can buy me?”
Last September, FreshDirect secured a $189 million investment from JPMorgan Asset Management.
Walmart’s $3.3 billion acquisition of Jet.com, the e-commerce startup that is spearheading Walmart’s online strategy, positions Walmart to compete on delivery of everyday items but not on fresh food, which is FreshDirect’s strength, say experts.
While online food delivery is still a fraction of the overall industry — about 7 percent of grocery purchases are made online — FreshDirect has succeeded in convincing New Yorkers to not only buy their paper goods online but also fresh produce, prepared meals, fresh bread and meats.
“Companies have always been interested in buying FreshDirect, and the Amazon deal just accelerates that interest in it,” said Flickinger.