Editor’s Note: On June 16, 2017, Whole Foods agreed to sell itself to Amazon for $13.7 billion. This is the exclusive story that led up to that momentous decision for the Austin-based grocery giant.

Monday, April 10, was going to be a big day for John Mackey, but he had no idea how big it would turn out to be. The co-founder, CEO, and spirit animal of Austin-based Whole Foods Market was flying to New York to launch a tour to promote the publication of his second book, The Whole Foods Diet (summary: Go vegan, or mostly vegan). He was set to lead things off at the Lower Manhattan headquarters of Goldman Sachs, in a gleaming tower overlooking the Hudson River, as part of a speaker series at the powerful investment bank. Mackey was going to follow that event with a signing at a nearby Barnes & Noble, an interview on CBS This Morning, and a handful of other appearances.

As he stepped off the American Airlines flight at JFK (Whole Foods doesn’t own a jet, and Mackey flies coach), his phone lit up with urgent text messages and voice mails. A hedge fund in New York called Jana Partners had snatched up almost 9 percent of Whole Foods’ stock and announced that it would pressure the company to either overhaul its business or sell itself—perhaps to another grocery giant, such as Kroger, or to a less traditional player, such as Amazon. Mackey and other leaders might have to be replaced. A media frenzy ensued, and the PR team who had carefully staged what should have been a traveling celebration of their boss as a thought leader shifted into immediate crisis mode.

“From that moment on, I was drowning in it,” Mackey says, “including when I got to Goldman Sachs. The CEO of Goldman [Lloyd Blankfein] wanted to meet with me because, of course”—he adopts a sardonic tone, a tic that tends to make his handlers stiffen up—“ ‘Goldman Sachs would love to represent you. If you guys are going to be sold, we’d love to make one hundred million dollars doing that. Don’t forget your buddies at Goldman Sachs!’ ” (A spokesperson for Goldman says no such meeting occurred.)

Mackey tells me this story in a modestly sized corner office at Whole Foods headquarters, in downtown Austin, a couple of weeks later. It’s a warm late-April day, and the afternoon sun beats in through the windows, which frame a view of the West Austin hills unfolding gracefully on the horizon with the booming neighborhood that has risen around the Whole Foods mother ship in the foreground. “This used to be my office, but I learned it didn’t have good feng shui,” Mackey says with a slight twinkle in his eye (I can’t tell if he’s being serious).

It’s unbelievable timing, I note, that the Jana news would come out precisely as he was beginning his book tour—so unfortunate, because he presumably didn’t want to be out doing public events while controversy swirled around his company. “The timing was intentional,” Mackey says curtly. He tends to speak softly, and he presents himself like your rumpled, slightly kooky uncle until something snaps him to attention and a take-no-bull streak reveals itself. “They hijacked my book tour. It’s not that I think that they were trying to harm the book tour. It’s just like, ‘Okay, the CEO is going to be distracted. He’s not going to be able to give full attention to this.’ ” (Jana Partners declined to comment for this article.)

The PR team started canceling Mackey’s media appearances—“a lot of media,” he says. Gayle King and the crew at CBS This Morning wouldn’t promise to stick to happy veggie-book chatter and ignore the Jana drama, so Mackey’s staff even backed out of that plum booking.

“We were reeling,” Mackey says. “I hadn’t even had a chance to talk to my team. We didn’t have any bankers in place. These guys just—it was like kicking you below the belt. Usually when these things happen, you get fair warning. They let you know, ‘Hey, we’re going to be buying some stock. I want to meet with management.’ ”

I had asked to spend some time interviewing Mackey several weeks before the Jana Partners crisis erupted. The company had surprised the business world last November when it announced that 25-year Whole Foods veteran Walter Robb—who had shared the CEO role with Mackey for six years—would be stepping aside, making Mackey the sole CEO. Mackey, in the co-CEO role, had acted less as a traditional executive and more as a kind of spiritual leader, with Robb handling more of the day-to-day matters. By January, the founding-father-philosopher was running things alone, which made some investors nervous.

It had been an eventful two or three years leading up to the leadership change, which made his new position even more interesting. Whole Foods’ stock price topped out at $65 per share in late 2013, and shortly thereafter, Fortune published a cover story called “How Whole Foods Is Taking Over America.” The company had doubled its revenue and tripled its profits in the seven years prior, the article touted. The company was looking to triple its number of stores, from 400-something to around 1,200. It was basking in the feel-good glow of having opened a risky store in Detroit in 2013, at that city’s nadir, which led Cory Booker and Rahm Emanuel to ask the company to please, please open up in Newark and the South Side of Chicago, in the hopes that the halo effect of a Whole Foods store would give those areas a much-needed boost.

“I hadn’t even had a chance to talk to my team. We didn’t have any bankers in place. These guys just—it was like kicking you below the belt. Usually when these things happen, you get fair warning.”

But by the time the company announced its leadership change, the mood around headquarters had sagged. The company faced challenges on all sides. In 2016, Kroger, the nation’s largest mainstream supermarket chain, passed Whole Foods in annual sales of natural and organic products. Trader Joe’s and Sprouts Farmers Market were attacking on another front with nimbler, cheaper, foodie-focused stores. Food costs were deflating across the industry, thanks to larger economic trends and a renewed focus on lower prices by Walmart. Amazon was nosing into the grocery business. Meal-kit start-ups such as Blue Apron were changing shopping habits. Two German supermarket giants, Aldi and Lidl, were planning an all-out assault on the U.S. market. And a pair of overpricing scandals in 2015 had given new life to Whole Foods’ longtime reputation for causing sticker shock in the checkout line.

After its high of $65, Whole Foods’ stock price had gradually lost more than half its value, and it has hovered around $30 for two years. The company had reported six successive quarters of declining same-store sales (a key measure of retailers’ health that compares existing stores’ sales with their sales a year earlier), and a 3 percent decline in store traffic in the same period (that’s roughly 14 million fewer customer visits, a Barclays analyst reported this March). In its February 2017 first-quarter-earnings call, Whole Foods walked back its plan to open eight hundred more stores.

The year 2017 was going to be a critical moment for Whole Foods and Mackey, so I was curious what life was like for him in this new reality, now that he was back solo in command. The company agreed it would be a good opportunity to tell his side of the story and decided to cooperate. Then, days before I was to start reporting, Jana announced its siege, offering a front-row seat to Mackey’s scramble to keep hold of his life’s work.

“These people, they just want to sell Whole Foods Market and make hundreds of millions of dollars, and they have to know that I’m going to resist that,” Mackey said to me at one point. “That’s my baby. I’m going to protect my kid, and they’ve got to knock Daddy out if they want to take it over.”

To understand the crisis facing Whole Foods, rewind past the recent slump, past the farm-to-table frenzy of the previous decade or so, and go all the way back to 1978, when then 25-year-old Mackey launched the store that would become Whole Foods Market. As with most iconic brands, the founding story of Whole Foods has entered the annals of business lore.

Mackey grew up in Houston’s well-to-do Memorial neighborhood eating the typical mid-century American diet of TV dinners, hamburgers, and mac and cheese. He didn’t care a hoot for health food until after college, when he moved into a vegetarian commune in Austin called Prana and became the resident food buyer, then took a job with a local health-food store called the Good Food Company. He’d attended the University of Texas at Austin, as well as Trinity, in San Antonio, shuttling back and forth between the two over the course of six years, taking classes in religion and philosophy and whatever interested him (certainly not business) but never ended up getting a degree.

One night, after he’d worked at Good Food for about six months, he came home, enraptured with his newfound fascinations with food and retail and approached his then girlfriend, Renee Lawson, about opening their own store. “It’d be so much fun,” he told her. They raised $45,000 from friends and family and opened a store called SaferWay in 1978, in an old Victorian house on Rio Grande and Eighth Street, not half a mile from today’s global headquarters of Whole Foods. When they got kicked out of their apartment for using it as a stock room, they moved in above the store and showered in a back room using a hose from the dishwasher.

Mackey’s studies and life in the commune had led him to a predictably progressive worldview. But as he worked to build his store, he developed a new, more business-friendly set of beliefs. He’d been reading a lot of Milton Friedman and other staunchly free-market economists. After about two years of running SaferWay, Mackey learned that building a successful health-food store might require some compromises on his ideals. SaferWay “was, like, a super-healthy store,” he remembers. “It was vegetarian. We didn’t sell sugar. We didn’t sell meat. We didn’t sell alcohol. And we didn’t do any business either. We were averaging about $10,000 a week in sales, and I began to realize that we needed a bigger store, and we needed to make our product mix a little bit less narrow.”

Longtime employee David Matthis and Mackey at the opening of Houston’s Shepherd Drive store in 1984; the original Whole Foods location in Austin, which opened in 1980. Photographs courtesy of Whole Foods.

He persuaded Craig Weller and Mark Skiles, the owners of a competing store called Clarksville Natural Grocery, to merge with him and open a 10,500-square-foot natural-foods emporium on Tenth Street called Whole Foods Market. The store was two or three times the size of a typical natural-foods store at the time, and it blurred the lines around what such a store should or could sell. Whole Foods sold meat, alcohol, and sugar—and people, naturally, bought the stuff. It wasn’t just a place to buy a few sacks of bulk grains but an actual full-service grocery store that didn’t allow preservatives or artificial colors or flavors. Within six months, Whole Foods was the highest-volume natural-food store in America. “So we knew we’d hit on something that was a good idea,” Mackey says.

It was also the first time Mackey was accused of being a sellout. Among the co-op crowd, he suddenly looked like a craven capitalist—“Darth Vader,” some called him—even though he felt as though he was still an idealist. As he saw it, he had just added a dose of pragmatism to his vision. If people were going to buy meat and beer anyway, at least try to sell them good meat and beer. Maximizing the amount of money the store made wasn’t an end in itself; it was a means to achieving the store’s higher purpose.

Mackey calls this phase of his life an “awakening,” a realization that if your business motives are so pure that you can’t create a business around them, you’ll never accomplish your mission. And a corollary: Haters gonna hate. You have to persist in the face of them.

“Here’s the thing,” Mackey says today. “I’m just a guy. I’m an Austin, Texas, guy who built a business. It’s a lot bigger than I ever thought it would be. I’m a little older, I’m a little bit wiser, but I’m still the same guy. I just show up as who I am. I’m not trying to bullshit anyone. I’m just showing up in my authentic self. Some people love that. Some people don’t like the self that shows up. Ultimately, I don’t really care. I’m just gonna be who I am, try to be a good person, do the right thing, build a great company, and let the world think what it wants to think.”

The Whole Story: Pt. 1 1978 Twenty-five-year-old John Mackey and his then-girlfriend Renee Lawson open Safer Way, a small health-food store near downtown Austin. 1980 Safer Way joins forces with competitor Clarksville Natural Grocery to open the first Whole Foods Market in downtown Austin. Within six months, Mackey says, it is the highest-volume natural-foods store in America. 1981 A flash flood nearly destroys the store. Employees and customers rally to help rebuild it, and it reopens less than a month later. 1984 Whole Foods begins its expansion by opening in Houston. 1988 Whole Foods buys the Whole Food Company, in New Orleans, which becomes its first store outside of Texas. 1992 With only ten stores to its name, Whole Foods Market becomes a publicly traded company. 1997 The company launches its in-house line of packaged foods, 365 Everyday Value. 1998 Fortune names Whole Foods one of America’s “100 Best Companies to Work For.” The company becomes a perennial presence on the list. 2004 The company opens its second New York City location, a foodie mecca prominently situated across from Central Park. 2005 Whole Foods debuts on the Fortune 500 list at number 480. It eventually reaches number 176 in 2017. 2006 Seeking to distance himself from any perception that he’s out for personal gain, Mackey gives up his salary and stock options. 2007 The Federal Trade Commission tries to block Whole Foods’ acquisition of Colorado-based competitor Wild Oats. It’s revealed that Mackey has, for seven years, been using a fake screen name to post on online message boards disparaging Wild Oats.

As Whole Foods expanded across Texas and eventually started buying up other natural grocers around the country, establishing itself as the first national healthy-foods supermarket chain, the gap between Mackey’s personal mission and that of his company became more and more pronounced. Personally, he went through a series of diet awakenings, becoming ever more ascetic in his food choices, to the point that now he not only eats vegan but consumes no oils. Whole Foods, on the other hand, grew its assortment into an even more dizzying array of healthy and gourmet and not-quite-either products that make it harder and harder to define what the company stands for. How does a barbecue counter or boxed mac and cheese fit into the Whole Foods philosophy? What about organic potato chips? Sure, they don’t use any of the ingredients Whole Foods bans from its stores (a list of more than 120 things now that includes bleached flour, MSG, foie gras, and myriad unpronounceables), but are the chips healthy? Of course not. It boils down to Whole Foods becoming a gourmet specialty-foods store as much as a healthy one.

As that transformation happened, another one was happening throughout the rest of the supermarket business. In the late nineties and early aughts, Walmart got into the grocery business in a big way, and mainstream grocers were “scared to death,” Mackey says. “Walmart was coming in and just taking away all their share, so they all tried to become more like Walmart. They cut their costs, they cut their labor at their megastores, didn’t invest as much into them, and the stores got to be kind of crummy. That created an opening for Whole Foods Market, which wasn’t trying to compete with Walmart on having the lowest prices. We transitioned over to a middle-class customer that we never thought we were going to get.”

In 2004, Whole Foods opened its second store in New York City, in the basement of the Time Warner Center, a pair of gargantuan luxury towers on Columbus Circle, located across the street from Central Park and at the intersection of the city’s busiest business district, Midtown Manhattan, and one of its most established residential districts, the Upper West Side. The store became an instant foodie temple, a place to pick up a quick lunch to take to the office, grab dinner to schlep home on one of the five neighboring subway lines after work, to see and be seen, to wander around ogling the copious produce and fresh fish and baked goods, and, yes, to actually do some proper grocery shopping. On opening day, as the crowd topped the store’s maximum capacity, the line to get in stretched out the building and down Broadway, remembers David Lannon, a longtime Mackey deputy who oversaw the launch. “It gave us a confidence and a swagger to say, ‘If we can make it here, we can make it anywhere.’ ”

To be sure, it wasn’t the first such temple Whole Foods had created, but it turned heads in the industry. After all, the store had visibility at one of the world’s most valuable pieces of real estate. Mainstream supermarket companies—which had been grappling with the Walmart effect—suddenly started chasing Whole Foods.

A lot of the weaker players had gone out of business by that time or consolidated into huge supermarket conglomerates, and as the new giants began upping their game, they narrowed the gap between themselves and Whole Foods. Now customers who wanted to buy organic sometimes, or appreciated finding heirloom tomatoes or a dozen varieties of apples, could do so at the local Kroger or H-E-B. They might not find quite the cornucopia of artisanal cheeses made by Northern California cheese nymphs, but they could reliably get a decent wheel of Camembert and a bouquet of organic lacinato kale. The regular grocery, in time, became good enough on quality—and usually better on price.

“Some of those middle-class customers, who weren’t really our customers from the philosophical standpoint but came to us just because our stores were nice, began to drift back to H-E-B and Safeway and whatnot,” Mackey says. Meanwhile, Trader Joe’s began to blanket America with its combination of smiling Hawaiian-shirt-clad salesclerks, low prices, small and convenient (and thus cheaper) store layouts, and clever, only-at-Trader-Joe’s packaged products.

This is the conundrum that has dogged Whole Foods for much of the past ten years. It continued to grow handsomely as it added more stores and ever more in-house dining areas and special services, but eventually the competition caught up to it. “They didn’t evolve,” says Phil Lempert, a longtime food-industry analyst and the editor of supermarketguru.com. “I think the chain really had blinders on and thought they were so far ahead of everyone else that they didn’t have to pay attention to competitors. The reality is, I can go to Kroger and buy the same or similar goods at a lower price—it’s that simple.”

The situation also provides an excellent window into the mind of Mackey. A conventional solution might be to double down on growing Whole Foods into a mega-grocer. To Mackey, though, it’s a callback to his roots. “We’re going back to being a little bit more niche than we were. We are not going to be the supermarket that everybody’s going to want to shop at.”

Fair enough, but the problem with that strategy is that it’s probably not the kind of thing that’s going to satisfy Wall Street investors, who demand never-ending growth, measured in quick-fire increments every three months when the company reports its quarterly earnings. For a publicly traded company, the reality is that the market demands that you either grow or die.

Mackey can’t restrain himself from a rant about how unfair it seems that Wall Street is cornering him, given the company’s history. “Whole Foods has created amazing value for our shareholders. We’ve increased value thirty times over since we went public. We have the highest sales per square foot in the food-retailing business. By every objective measurement, we’re still best in class in the entire food-retailing industry. Our business model’s not broken. We’re still extremely healthy. We had eight percent growth in same-store sales for thirty-five years. The last year and a half got negative same-store sales, and our stock has fallen fifty percent. So, obviously, the company needs to be sold! Obviously, the management can’t create any value!”

Mackey, to a large degree, is a victim of his own success. He has, from the beginning, been willing to compromise his ideals to grow his company, but he has his limits. And now they’re being tested. Turning Whole Foods into more of a mainstream grocer would be a form of defeat in his eyes, and that’s what he sees as the outcome if the company were to be sold. But paradoxically, staying independent and not growing the company aggressively enough could lead to his ouster—another form of defeat. His options are narrow and not obvious.

I ask him if he ever thinks, “Well, we changed food culture. Our work is done—we can go home, let the big guys take it from here.”

“There’s part of me that thinks that,” he says. “But then I see that seventy-one percent of Americans are overweight and thirty-eight percent are obese, and we realize our work is not done.”

It’s a Monday evening at BookPeople, the giant independent bookstore across the street from Whole Foods’ headquarters, and Mackey is kicking off his Austin book-signing event. “This is like a bucket-list book for me,” he tells the audience. “This is a book I had to write before I would feel like I finished my purpose in life. Imagine for a moment that you know the solution to the health-care crisis in America, that you know we spend eighty percent of our health-care dollars in our country on basically dietary and lifestyle diseases, and you know the solution to the health problems, you know how to prevent people from getting heart disease, which is our leading killer, you know how nobody would get type two diabetes, you know how to reverse diabetes, you probably know how to keep people from getting cancer. Wouldn’t you feel an ethical compulsion to share that information?”

For nearly an hour prior to Mackey’s arrival, a slow stream of his most die-hard health-food acolytes (long, gray hair, sensible hiking sandals, flowy skirts) filed into the event space, where a few dozen chairs had been arranged facing a lectern. They chatted among themselves while waiting for Mackey and shared their attachments to the Whole Foods brand. This one just started a “one hundred percent plant-based diet” two weeks ago, this one shops at Whole Foods four or five days a week and wants a job there. At a certain point, a fit-looking young man in blue doctor’s scrubs offered an anecdote about a morbidly obese person he’d helped by putting him on a Mackey-style oil-free diet.

“Are you a physician?” asked the four-times-a-week shopper.

“I’m a health coach,” he said. “I work for Whole Foods Market.”

His name, it turns out, is Adam Sud, and he works in Whole Foods’ in-house health clinic—the company has two of them, one in Austin and one near L.A.—where he helps employees establish better nutrition and lifestyle habits. He should know about that. Five years ago, at age thirty, Sud weighed three hundred pounds, ate primarily fast food, had type two diabetes, and was addicted to Adderall. He’d stay up all night playing video games and binge eating. Then he went to a week-long vegan boot camp run by Rip Esselstyn, a former Austin firefighter who has become a health guru and Mackey friend; he has a series of books and packaged foods (sold in Whole Foods, naturally). Sud went vegan, started working out, and within a couple of months lost forty pounds and dropped his blood sugar level from 300 to 120 milligrams per deciliter. Within a year he’d lost one hundred pounds and reversed his diabetes.

Sud happens to be the son of Jim Sud, Whole Foods’ executive vice president of growth and business development, who was one of the original investors in SaferWay and has known Mackey since they played basketball together in high school.

It was the elder Sud who suggested Adam attend Esselstyn’s boot camp, which was part of a wider effort at Whole Foods to promote wellness among employees. To compel workers to eat healthy, the company started offering greater shopping discounts for people who could meet certain benchmarks on things like body mass index, blood pressure, and cholesterol. When Mackey realized this all but left out the people who could most use more fresh veggies—the least healthy employees—he started a series of week-long Total Health Immersions, each run by a nutrition expert such as Esselstyn. At a cost of $4,000 per person (which the company pays), the attendees get “intensive education about healthy eating and lifestyle. We put them on a mild exercise program, we take all their biometrics, and we completely control their food for one week,” Mackey explains. “We feed them the Whole Foods Diet.

“Whole Foods Market doesn’t primarily care about money. It primarily cares about fulfilling its purpose. And so do I.”

“What’s been astounding,” he continues, “is how much progress people make in just one week. The diet Americans eat is so fundamentally unhealthy that when you just put people on real foods for one week, they make amazing progress. And if they can stay on it for a year, it’s transformational. We’ve actually reversed type two diabetes in hundreds of people, usually in less than thirty days. We’ve reversed heart disease countless times. We’ve had probably well over one hundred team members lose over one hundred pounds in less than a year.”

Adam Sud wasn’t a Whole Foods employee at the time, but his dad arranged for him to go to an immersion anyway. “I often think that had I not been involved in Whole Foods, had I not been able to get him into Rip’s immersion, what would have happened?” says Jim. He believes Whole Foods saved his son’s life.

During Mackey’s talk at BookPeople, he singles out Adam in the audience, to illustrate the power of his diet on not only human health but also the health of his business.

“Adam, how much money are we spending on health care for you?” he calls out.

“Zero.”

“Exactly. Exactly,” says Mackey. Whole Foods runs its own health-insurance program for employees, in addition to working with a large health-insurance provider. “If we can get our team members to be healthier, we will pay less in health care for them.” This is why it’s worth it for the company to foot the bill for Total Health Immersions. Ten or fifteen percent of Whole Foods’ employees are chronically unhealthy or overweight, and those people account for about eighty percent of the money paid out in the insurance plan. So in the long run, the cost of a week-long boot camp pays for itself in savings. The wellness clinic Sud works in represents similar thinking.

Both programs might one day become available to the public, Mackey has mused—a goal that points to his view of Whole Foods as something more than just a grocery store. “We’re a mission-driven company,” Mackey says to me at one point. “It’s hard for many people to understand that Whole Foods wasn’t created to make money per se. It wasn’t created as an MBA project to meet some unmet market need. It’s something I was very passionate about. We’re not like every other corporation. Whole Foods Market doesn’t primarily care about money. It primarily cares about fulfilling its purpose. And so do I.”

It’s a theme Mackey returns to with me again and again, and it’s certainly true for him as a person. For the past ten years, the only compensation he’s accepted from Whole Foods is a $1-a-year salary—no stock options, nothing else. “I have enough, and I don’t lust after more,” he says. (His net worth is around $100 million—a lot of money, but nowhere near the billions people often assume he has raked in.)

It’s a muddier question whether the company truly cares more about its mission than money, but it’s telling that one after another, current and former employees talk about their devotion to the cause. “People see John as truly a visionary,” says Chad Sarno, the company’s former global culinary educator, who left in 2013 but still remains close with Mackey and wrote the recipes in The Whole Foods Diet. “I would do anything for John and for Whole Foods,” says Jeff Turnas, a veteran of more than two decades who has uprooted his family numerous times to tackle business challenges on various parts of the globe. “It’s not like we’re just putting boxes on a shelf,” says David Lannon. “Our mission is to change the world.”

The way Mackey sees it, the story of Whole Foods’ current crisis is a “morality play between conscious capitalism and greedy, short-term financial capitalism.” “Conscious capitalism” is his term for a way of thinking about business as having a higher purpose than just creating value for its shareholders. The critical difference comes down to a distinction between shareholders and stakeholders. Shareholders are people who buy stock in the company. They are one kind of stakeholder. Other stakeholders include customers, employees, suppliers, and the wider community and environment—and each group of stakeholders should be equally valued, according to Mackey. Strategic decisions about the business should never involve trade-offs between different stakeholders but rather create what he calls “win-win-win-win-win-win” scenarios—of which the company’s approach to employee health benefits is a prime example.

It might sound self-evident that corporations would be wise to seek win-win scenarios, but the reality is that Wall Street demands that public companies accept a “fiduciary duty to maximize shareholder value”—or, more plainly, to put the interests of shareholders above all else. There’s zero legal obligation to do so, but the notion has become so enshrined in the business world that to question it, as Mackey does, is considered something akin to treason.

In 2013, Mackey co-wrote a book about conscious capitalism (and coined the term) with Raj Sisodia, a professor at Babson College, outside Boston. In the book (Conscious Capitalism: Liberating the Heroic Spirit of Business), Mackey writes that business and capitalism are fundamentally heroic systems. “In the long arc of history, no human creation has had a greater positive impact on more people more rapidly than free-enterprise capitalism,” he writes.

Within that system, he sees one group of people as the standout change makers: business creators like himself. “Entrepreneurs are the true heroes in a free-enterprise economy, driving progress in business, society, and the world. They solve problems by creatively envisioning different ways the world could and should be.”

On the other hand, he believes that many business leaders have become fundamentally greedy, and that because of their actions, the wider public has come to view business as exploitative and untrustworthy. “There’s a narrative about business in America that says, ‘Business sucks,’ ” Mackey tells me one day. “It’s the idea that business is about a bunch of greedy bastards running around exploiting people, screwing their customers, taking advantage of their employees, dumping their toxic waste in the environment, acting like sociopaths.” Whole Foods, on the other hand, “is really, really trying to do the right thing.”

It’s not that Mackey thinks Whole Foods should somehow get a pass from Wall Street because it means well, but just that people should be patient. As he points out in Conscious Capitalism, an academic study by Sisodia showed that the stock prices of a sample of conscious capitalism–style companies outperformed the wider market over fifteen years by more than tenfold. That is, over the long term, conscious companies might actually be better investments.

It’s a compelling argument, but it has at least one glaring limitation. When a company hits an extended rough patch and its stock price slides into a trough and stays there for a while, a special class of opportunistic investors—hedge funds and so-called activist investors like Jana Partners—stands ready to pounce. They buy up large chunks of the stock, enough to give them some bully power, and try to force the company to make changes that could increase the stock’s value, preferably quickly. That might mean selling the company, breaking it apart, forcing cost cuts, replacing leaders, or other often drastic measures. If the activists can rally other shareholders to join their cause, the company may have no choice but to acquiesce, at least to some degree.

Which is where Mackey finds himself today. I suggest to him that conscious capitalism is an easy sell when a company is steadily growing but that, when you’re in a downturn and predators are circling, you have to focus on the short term if you want any hope of fending them off.

“The way it’s structured now, that’s correct,” he concedes.

One response might be to change the way things are organized and take Whole Foods private. When another famous Austin entrepreneur, Michael Dell, found his eponymous company under a similar attack in 2013 by the financier Carl Icahn, he partnered with a private-equity firm and bought the company back from the public market so that he could focus on reshaping Dell for a shifting computing landscape. Mackey has mused publicly about the frustrations of running a public company, and last year he told a conference audience in California that his privately held competitors, such as Trader Joe’s, have a leg up on him because they don’t have to be as transparent as he does. “They fly under the radar largely, and Whole Foods never does,” he said. “Everybody sees what we’re doing. We can’t see what our competitors are doing if they’re private.”

Does he think about the possibility of taking the company private today? “I’m thinking about a lot,” he says.

And yet experts say such a transaction is highly unlikely in Whole Foods’ case, because the financials just don’t make sense. “I looked at that possibility when things weren’t as bad as they are today, and the math was really tight on whether a deal could work. And things have only deteriorated since then,” says Karen Short, a senior retail analyst with the multinational banking giant Barclays. “It’s really hard to get something like that done with the kind of same-store-sales trends Whole Foods is seeing.”

If Mackey wants to maintain control of his company, then, he’s just got to show that he can turn around the sliding sales, even as the company faces strong headwinds in the industry. “Yes, we need to evolve,” he says. “We need to get better, and we’re doing that. But these guys just want to sell us, because they think they can make forty or fifty percent in a short period of time. They’re greedy bastards, and they’re putting a bunch of propaganda out there, trying to destroy my reputation and the reputation of Whole Foods, because it’s in their self-interest to do so.”

Mackey’s fight reflex has a way of overcoming his attempts to stay on message. “Did you ever read The Lord of the Rings when you were younger? Do you remember the Ringwraiths?” he asks. “They were consumed by the Ring of Power. They became addicted to it and they became absorbed by it. Well, there’s an element in finance that consists of a bunch of Ringwraiths, and no matter how much money they have and how many billions they have, it’s not enough. They’re Ringwraiths. The guy behind Jana Partners, for example, who’s attacking us [Barry Rosenstein], he bought the most expensive home ever sold in America, for $147 million. And their mantra is basically shareholder value. They don’t care about the stakeholders or long-term value. It’s just, ‘How do we make as much money as we can as quickly as possible?’ ”

Rosenstein quite certainly is in it to make a lot of money—say, half a billion dollars—preferably sooner than later. That’s what his business does. But that’s a separate issue from whether Whole Foods needs the shake-up that Rosenstein’s firm is pushing for. “This isn’t the rapacious hedge fund versus the conscious capitalist,” says one frustrated Whole Foods shareholder I spoke with, who preferred to remain anonymous. “That’s a straw-man argument. The business is hemorrhaging customers.”

“I’m not sure John’s personality is suited for that Wall Street mentality, that constant pressure on earnings or store openings or what to do,” says grocery analyst Lempert. “That’s different from being steeped in good health for America. I give him so much credit for changing the landscape of supermarkets, but every successful company founder at some point leaves and turns things over to the next generation. Take credit for what you’ve done, be proud of it, and turn it over to someone who can run a fifteen-billion-dollar business and expand it.”

The Whole Story: Pt. 2 2009 Mackey publishes a Wall Street Journal op-ed arguing for market-based healthcare solutions under the title “The Whole Foods Alternative to Obamacare.” Mackey’s libertarian worldview comes under fire from liberal-minded customers, who vow boycotts. 2010 Whole Foods names longtime company veteran Walter Robb co-CEO, alongside Mackey. 2012 Mackey publishes his first book, Conscious Capitalism: Liberating the Heroic Spirit of Business. 2013 In October, Whole Foods’ stock price tops out at $65.24. 2015 The New York City Department of Consumer Affairs finds that 89 percent of pre-packaged foods at the city’s Whole Foods stores were incorrectly weighed, which led to wide-ranging overpricing and some underpricing. A resulting class action lawsuit is still in court. A Whole Foods store in California starts selling bottles of water that contain three asparagus stalks for $5.99; a price higher than an entire bunch of asparagus. The company pulls the product and apologizes. After a roller coaster ride for more than a year after its 2013 high, the stock price settles at about $30, less than half its one-time value, and stays there for nearly two years. Whole Foods reports a decline in its same-store sales, a key measure of retailers’ health. The company goes on to report declines in same-store sales for the next six quarters. 2016 The first 365 by Whole Foods Market, a new chain designed to compete with lower-price competitor Trader Joe’s, opens in L.A. That first store is a success, but the next two, in Oregon and Washington, underperform. In November, Whole Foods announces that co-CEO Walter Robb will be stepping down and Mackey will once again lead the company solo. The nation’s largest supermarket company, Kroger, for the first time sells more organic and natural products annually than Whole Foods. 2017 On April 10, New York hedge fund Jana Partners announces it has purchased nearly 9 percent of Whole Foods stock and will pressure the company to make drastic changes—perhaps forcing it to sell itself or find new leadership. Also on April 10, Mackey launches a tour to promote his second book, The Whole Foods Diet. The unfolding shareholder drama cuts the tour short. The first 365 store in Texas opens in Cedar Park, north of Austin. Mackey calls the revamped concept “365 2.0.” On the company’s second quarter earnings call, it announces an overhaul of its board of directors and details numerous cost-cutting measures, but Jana Partners declines to back off. “Whole Foods Market is faced with evolving right now—or possibly going extinct,” Mackey tells Texas Monthly.

At 8:30 a.m. on April 26, a crowd of a few hundred people spills over the sidewalks and into the parking lot of a newly built strip mall off the U.S. 183 frontage road in Cedar Park, a far-north suburb of Austin. Sharing the plaza with discount retailers such as DSW, Old Navy, and Nordstrom Rack is the latest Whole Foods store, which opens today.

It’s no ordinary Whole Foods. The Cedar Park location is the fourth store nationwide (and the first in Texas) of the company’s year-old spin-off brand, 365, a stripped-down, lower-priced chain meant to compete with Trader Joe’s and Sprouts. 365 could end up being a major part of Whole Foods’ way forward—Mackey suggests to me that the company has as many as one hundred older, smaller stores that it could reformat as 365 locations—but the new chain’s rollout has been bumpy so far, and slow. The first store, in L.A.’s hipster enclave of Silver Lake, has been a success, but the second two, in Oregon and Washington, have struggled.

The Cedar Park store represents what Mackey calls 365 2.0: not a complete reboot but a top-to-bottom revision, with changes in everything from the shelf labels to the olive bar to the value-shopper location. One of the most noticeable changes is the logo on the wall outside; the new store emphasizes the Whole Foods brand over 365, at least in part, Mackey acknowledges, to create a halo effect on the mother brand from the cheaper prices here.

As the Austin swamp-funk band Shinyribs plays on the sidewalk and shoppers finally swarm in the door at a few minutes before nine, dozens of Whole Foods execs mill around congratulating one another, no doubt relieved to have a cause for celebration. Mackey is here this morning too, and he sets up at a table out front with a stack of diet books and a Sharpie.

A woman with two small children walks up to him on her way out of the store. “Why are you guys selling Nature’s Own bread?” she asks.

Mackey, not quite hearing or understanding the question, looks to his publicist, who leans in.

“Why are you selling Nature’s Own? It’s full of bad stuff!” the mom says again. She starts to explain that she used to work for Whole Foods and she knows about these things, and the publicist circles around to head the conversation away from an eavesdropping journalist, or other customers coming to meet the CEO.

It’s the kind of complaint Mackey hears all the time, of course. If people aren’t upset about the prices, they’re upset about the selection or the quality standards—and they’re not shy about speaking up. And as ever, it’s Mackey’s job to tread carefully and try to satisfy the company’s bottom line without compromising too much on its mission. Whereas the path for 365 stores veers in the direction of convenience, the flagship stores have increasingly turned into foodie theme parks as much as places to do weekly shopping. That means more in-house restaurants and brew pubs and wine bars, more outdoor public spaces for morning sober raves (this is a real thing—it’s called Daybreaker). In one of the newest stores, abutting Manhattan’s Bryant Park, there’s a so-called produce butcher who chops and preps your veggies to whatever specs you desire. In Atlanta, the company just opened its first stand-alone restaurant, next door to a store rather than inside it.

Those are the things customers will notice. When Mackey and a handful of other execs announced their second-quarter earnings to Wall Street on May 10, though, the conversation centered mostly on cost-cutting measures and new efficiencies. Whereas Whole Foods has long run as a collection of twelve regional entities that have great autonomy in what products they stock, for instance, the company is now making many of those decisions centrally. On one hand, it gives Whole Foods more leverage to command lower prices from its suppliers. But it risks damaging a core tenet of the company’s culture and, moreover, could result in its stores having less of a local feel and fewer surprise-and-delight products.

Most important, the company sacked five people on its twelve-member board of directors, many of whom had been with the company for a long time. Gone were some of the conscious capitalism stalwarts, like Container Store co-founder Kip Tindell, and in their place were more traditional corporate leaders with fewer ties to Mackey.

The changes will result in a return to steady growth by 2020, Whole Foods predicted. And while analysts seemed to think Mackey bought some time to try and turn things around, some are dubious about the plan’s viability. “I don’t think it’s attainable,” says Karen Short at Barclays. “And they danced around one of the most important subjects: how they’re thinking about the competitive landscape.”

It’s anybody’s guess how much time Mackey actually bought, especially since Jana Partners rejected the company’s offer to appoint two board members the hedge fund suggested in exchange for an eighteen-month “standstill” agreement in which Jana would stop agitating publicly. “It depends how patient Jana is willing to be,” says Lempert. And how much faith other investors have in Mackey.

In the weeks I spend visiting with Mackey and other Whole Foods executives, there’s a daily drumbeat of headlines about the company’s limbo state: Amazon considered making a bid for Whole Foods last year. Albertson’s is weighing a bid. Another big institutional investor, mutual-fund manager Neuberger Berman, is agitating alongside Jana. Albertson’s probably couldn’t afford the debt it would take. The synergies aren’t right for Kroger. Or maybe they are. Mackey is wasting time with his book tour. And on and on.

One morning in early May, Mackey meets me at 7 a.m., in tan hiking shorts and a gray T-shirt that reads “Tranquility,” for a brisk walk around Lady Bird Lake. In normal times, he goes walking most mornings on his beloved Shoal Creek Trail, near his house in Old West Austin, and sometimes here on the lake. As we walk, passing joggers do double takes as they recognize him. Mackey seems calm—tranquil even—despite the pressure.

Hiking is a big part of Mackey’s life, a kind of meditative activity. Fifteen years ago, he split for five months to hike the entirety of the Appalachian Trail—from Georgia to Maine—and came back newly energized. He’s gone on extended hikes once or twice a year since then (though never again for five months), and one of the jokes around the company is that employees had better watch out because he’s going to come back with big new ideas. In 2007, he eliminated his salary and his stock options. Another year, he came back with the idea for the wellness program. Last year’s hike (perhaps not coincidentally) preceded a lot of big changes, including Robb’s departure. Lannon, who has joined his boss on several of the longer hikes, says that even in the short few months Mackey has been the sole CEO again, his taste for reinvention has intensified.

“Do you know the book Flow?” Mackey asks me as we cross a footbridge over Barton Creek. “When you’re in a state of flow, you’re in this highly creative state of being, where time no longer feels linear at all. You lose track of it. The people that seem to experience it the most are professional athletes and artists. But the psychologist who wrote the book—do you know who he found is next up on the list?”

“Business leaders?” I guess.

“Yes. Particularly entrepreneurs. And that’s how I experience business—I’m in a flow state right now. I’m awake.”

I ask him if the urgency of today’s crisis is in part Whole Foods’ fault, for having gotten complacent over the past few years.

“That’s sort of self-evident, right?” he says. “I’m not going to deny that. And yes, competition is a wake-up call. We are under extreme external pressure. It happens in any kind of evolution. If you think about species that go under extreme environmental pressure, they either evolve or they go extinct. Whole Foods Market is faced with evolving right now—or possibly going extinct.”

He’s had little time for his morning hikes since the Jana crisis erupted, he says, and he’s not planning on any big hiking sabbaticals in the next year. Instead, he’s been meditating more than ever—twenty-minute sessions at home in his “man cave”—and reading spiritual texts from a variety of faiths, from which he cherry-picks the parts he finds helpful. All day long, he repeats to himself a positive affirmation: Fully present. Fully in my heart. Fully in my higher self.

“We’re at a new creative moment,” he says as we circle back to where our walk began. “Whole Foods has got to go to a higher level, to synthesize the win-win-win-win strategy.”

I try to get him to define that higher-level strategy, because for all the tactical changes we’ve discussed, I still don’t know how it all fits together, what it looks like in five years. What’s the breakthrough idea, I ask, the big innovation?

He starts to answer, “I can’t—” and then cuts himself off. He starts again, stops again. “The answer is, I can’t say. We’re doing it right now, we’re in the creative moment. Say you’re writing a song or you’re writing a novel. You’re in the creative process, and you like some of the notes you’ve written, or the first three chapters rock. You’re saying to me, ‘I want to hear the whole song,’ or ‘Read me the whole novel.’ I can’t. Because we haven’t created it yet. We’re doing it right now.”

We walk quietly for a moment, and I wonder if we’ll ever get to hear the full song. “By the way, that’s incredibly challenging,” he says, “but it’s a lot of fun. It’s very fun. Trust me.”