Grocery News

Was this Texas supermarket chain on Amazon’s acquisition radar?

Was this Texas supermarket chain on Amazon’s acquisition radar?

H-E-B Montrose Market, grocery store, January 2013
Was H-E-B on Amazon's radar? Photo courtesy of H-E-B

As far-fetched as it might seem, could have scooped up the H-E-B grocery chain instead of Whole Foods Market.

Brittain Ladd, who until February was senior manager of a group within the larger Amazon Fresh and Pantry team, tells CultureMap that while he was working at Amazon, he suggested both H-E-B and Whole Foods as potential acquisition targets for the e-commerce giant. Of course, Amazon is now buying Whole Foods in a deal valued at $13.7 billion as a way to plunge into the brick-and-mortar grocery business.

“I don’t know if Amazon executives ever seriously considered buying H-E-B, but all of the executives I spoke to agreed that H-E-B could be a viable acquisition target,” says Ladd, who’s now a global strategy and supply chain consultant for the grocery industry and other business sectors.

In conversations with fellow Amazon executives, Ladd says he maintained the e-commerce powerhouse could expand H-E-B nationwide to accommodate Amazon’s grocery plans. However, since Whole Foods already had a nationwide footprint, the Austin-based organic grocery retailer was a more attractive acquisition candidate, he says.

Industry observers doubt the Butt family, owners of H-E-B, would ever give up control of the San Antonio-based company to Amazon or any other acquirer. H-E-B is the largest grocer in Texas, with locations in the Austin, Dallas-Fort Worth, Houston and San Antonio areas.

Dya Campos, a spokeswoman for H-E-B, declined to comment. Representatives of Amazon couldn’t be reached for comment.

Why did Ladd recommend H-E-B as an acquisition target?

“I chose H-E-B because I believe they have arguably the best team of executives and merchandisers in grocery retailing,” he tells CultureMap. “H-E-B does a fabulous job of creating a positive experience for customers in their stores. H-E-B also does a masterful job of procuring high-quality products and pricing the products to generate value for customers.”

For years, H-E-B has enjoyed a loyal and enthusiastic following. For instance, customer experience research and consulting firm Temkin Group in June named H-E-B the most trusted brand in the U.S. among 329 companies. Also this year, Market Force Information, a provider of customer experience insights, put H-E-B at No. 4 on its list of the country’s best grocers.

H-E-B operates about 390 grocery stores in Texas and Mexico. In 2016, H-E-B rang up an estimated $23 billion in revenue, making it the 13th largest private company in the U.S., according to Forbes.

In April, H-E-B announced it had passed the 100,000-employee mark, giving it bragging rights as the largest private employer in Texas. More than 90,000 of those workers are in Texas, with the remainder in Mexico.