Our food supply chain is overly ripe for disruption.

In finance and communities, we are rolling out token-based economies cross the blockchain. In transportation, we are rewiring the world under solar power.

For food however, the process of getting veggies and perishable products to the shelves of our supermarkets is not all that different than it was a century ago with horse and buggies and blocks of ice.

A few large players own the supply chain with massive refrigerated warehouses and trucks wired together with proprietary logistic systems. A high-cost, low-margin ecosystem up and down the chain that squeezes the producers on one side and the customers on the other.

Add to that the cost of government certs and regulations for organic and non gmo, and what you have is the ice-cube-in-the-sun business model with margins melted into submission and bolstered by the false belief that volume will fix a margin-poor model.

And an overarching disincentive for innovation in the artisanal food market.

Enter Amazon and Whole Foods.

Whether you care for them or not (I like them both a great deal), this huge experiment is being done in a very small market sandbox comparatively but will create a tsunami of change for the segment if successful.

Starting this coming Monday, only 90 days after this multi-billion-dollar acquisition was announced, change will already on the shelves. Change that as we move forward will impact everything about how quality organic and fair-trade food outside of seasonal green markets gets to our tables.

I know only what is in today’s Amazon Press Release, plus considerable experience as a vendor and customer, and a long-term student of the organic food, beverage and wine markets.

On Monday, many of Whole Foods shelf-stable, 365 everyday brands are supposed to go on Amazon.com for home delivery. Prices drops for a few categories of products roll in. And Prime, the club for same/next day free delivery/shipping, for access to movies and media, starts its unstoppable rollout as the discount loyalty club for everything from paper towels to organic rotisserie chicken to organic wine.

Rumors abound on what the core strategy is and how the logistical genius that is Amazon will run headfirst in the logistical hiccups and cost of the current paradigm.

This experiment is with nothing less than our food supply impacting our wallets at checkout and the future for thousands of artisanal brands that are dependent on this channel.

I’m an optimist and forecast nothing but dramatic yet solidly needed change.

Change that will get carbon-copied by everyone and will spark another massive wave of consolidation if it proves successful.

If we start with Amazon and Whole Foods stated goal of bringing high-quality organic products to a larger swatch of the population at more affordable prices, we can be certain of the following:

Ownership and configuration of the supply chain will change

Organic agriculture is scalable. In fact, technology is a boon potentially to increasing production, indoors and out, of organically grown goods.

I believe that Amazon will need to own in some fashion the food production in order to make this work. They are in a position to capitalize this where few are.

The way to control margins here is to own the production and control the process itself.

Distribution from logistics to storage to delivery will be reinvented

This is a quagmire of issues for short shelf life, perishable, refrigerated and frozen products.

It takes care and money to grow organic crops certainly. It takes as much to address a delivery chain that respects the shelf life of these products. This is part logistics, part mechanics of delivery.

Today the growers, the distributors and the retailers are all separate. With disparate systems that simply don’t interact well if at all.

Amazon has the DNA to rethink this from the ground up.

Change will happen though for certain as that is how to reduce prices and increase margins and better serve us the customers.

Amazon already touches the customer base, in fact most all of them

Customer acquisition and communications are usually the largest budget line item. Herein lies Amazon’s greatest asset.

They already have us as customers of amazon.com, Prime and more. They know how to leverage this.

That is who they are. The rest above is all logistics and vertical understanding.

Non-trivial certainly as an undertaking but imaginable that they could win.

Two gotchas that I worry about:

-Whole Foods was born on the idea of local and artisanal

That was the secret sauce of their success. That connection let them thrive even with higher prices in communities everywhere. Foragers were their business development people and built their brand.

There are ways to do this at scale and still both respect and capitalize on the local brands.

I hope they will.

-Neither Whole Foods nor Amazon understands the wine consumer

Both entities individually want this segment with its margins.

Amazon has tried multiple times and failed. Whole Foods never really got this right.

On one side, I am not a fan of them touching the artisanal wine world. On the other, if they respect the producers this could—I’m not certain here—be good for many.

I’ve seen no indication that they have figured this out as yet as rumblings of them buying vineyards and coming up with their own brands is I think the wrong tact.

This is going to be a long, disruptive and strange trip. 

I am optimistic that Amazon will figure out how to bring high-quality, non gmo, organic products with a community of producers to the market at better prices.

Them winning may be the best thing that could happen for all of us.

This is not however free shipping, or streaming media, it’s more personal as it is our health and the food that we buy for our families.

This is not luxury e-commerce, it’s a supply chain that feeds our lives.

The new order starts Monday. We are all players in this game.