Dive Brief:

• Whole Foods CEO John Mackey said the "marriage" to Amazon presents challenges for the two company cultures in a keynote speech at the APICS 2017 conference in San Antonio. And his words aren't all that surprising — back in June, Fortune Magazine published an article suggesting that the big merger could result in serious culture clash.
• Mackey also said that he and other top Whole Foods executives are planning a retreat to figure out how to integrate their purpose with Amazon's higher purpose.
• Since the merger's announcement back in June, Mackey has been mostly positive about the move, even saying that Amazon rescued Whole Foods from the "trap" of its "whole paycheck" image. At the APICS conference, Mackey also said Amazon plans to slash Whole Foods' prices again.

Dive Insight:

Amazon's company culture is often described as productivity-driven, aggressive and extremely internally competitive, but also innovative, tough and hardworking. Whole Foods, on the other hand, is the idealist company; it is consumed with a "higher purpose" to provide good, high-quality products, and takes great pride in caring for communities — inside and outside the company. As an example, one of Whole Foods' core values is, "Support team member happiness and excellence."

No wonder the meshing of cultures will be difficult — by cultural measures, the companies appear to be complete opposites. Mackey is assessing those very real risks, but he did say that Whole Foods is "happy to create a shared identity" with Amazon, then added, "I do think Amazon and Whole Foods are going to do amazing stuff together." 

Not only that, but it seems that Amazon isn't quite done paring down Whole Foods' "whole paycheck" image: "Amazon's thinking long term, they're going to do another round of price reductions," Mackey said.

Amazon's ability to streamline Whole Foods' operations and supply chain doesn't negate the fact that potentially clashing company values could breed internal resentment, and Whole Foods execs are already planning a retreat to think things over.

That's a warning to other established companies seeking to merge: even if a merger makes smart business sense, it's another thing entirely to deal with conflicting company cultures, and if those kinds of issues aren't resolved quickly, they can impede operations and efficiency. The Wal-Mart and Jet.com merger is just one recent example of clashing cultures that actually decreased employee morale.

Until now, the Whole Foods-Amazon merger has been interpreted as a boon to both parties — Whole Foods' supply chain is now better, Amazon can now have an easier time dipping into the grocery business. But conflicting values can ruin any marriage. If their union is going to succeed, it's likely that one or both companies will have to bend.