One year ago, Amazon agreed to buy Whole Foods for $13.7 billion, sending shockwaves through a grocery industry suddenly faced with competing against the world’s second most valuable tech company and the number one most fear-inducing.

The announcement of Amazon’s acquisition of Whole Foods, its biggest ever by a long shot, came June 16, 2017, and immediately set off a chain of speculation that Amazon would revolutionize the grocery industry the same way it did online retail. Amazon has spent the last year putting its stamp on Whole Foods, and traditional grocers have made a flurry of moves to beef up their e-commerce and logistical operations.

“Just by Amazon saying ‘we are acquiring Whole Foods,’ it forced an entire industry to change their strategy, to change their business model and the changes are still taking place to this day,” said Brittain Ladd, a strategy and supply chain consultant who previously worked at Amazon.

Today, Amazon and Whole Foods control just a sliver of the grocery market, and it will be a few years before the full impact of the combined companies is clear. But Ladd claims it is a near certainty that Amazon will rise up the grocery ladder, potentially becoming the top grocer in the U.S., unless one of its rivals does something drastic.

Prime play

The acquisition closed a little more than two months after it was announced, and that same day Amazon made its first splashy changes. Amazon started cutting prices on some items, offering Whole Foods items on its platform and installing kiosks to sell Amazon Echo speakers and other devices.

Small changes followed for several months until this spring when Amazon played two important cards: the beginning of grocery delivery and the installation of major discounts for Amazon Prime members.

Neither was a huge surprise. Rapid delivery is one of the main drivers of Amazon’s ascent to the top of the retail world. Prime boasts more than 100 million worldwide members, and it is clear how highly the company values the program based on all the incentives it offers for people to sign up.

CNBC reported in May that while 75 percent of Whole Foods shoppers are Prime members, only 20 percent of Prime members are Whole Foods shoppers. If Amazon continues to integrate Prime more deeply with Whole Foods, the tech giant could drive a huge surge in shoppers just by converting some of its existing online retail customers.

“Simple math tells you that if Amazon could increase the percentage of Prime members who shop at Whole Foods from 20 to 50 percent or 75 percent, look at how quick Amazon will be able to become one of the largest grocery retailers in the United States,” Ladd said.

The response

Amazon’s Whole Foods acquisition overshadowed another huge deal that happened the same day: Walmart acquiring Bonobos for $310 million. The move was part of a larger push — headlined by the $3.3 billion acquisition of Jet.com — to bolster its e-commerce offerings and appeal to younger, hipper demographics.

Since the Amazon-Whole Foods deal, Walmart has kicked its pace of innovation into overdrive. It’s expanding grocery delivery services across the nation and purchased New York-based Parcel to strengthen same-day delivery capabilities. Walmart started building a network of massive Pickup Towers where customers can find their online orders. The company formed alliances with Google and Postmates, and recent reports indicate Walmart is talking to Microsoft about an Amazon Go-like technology the tech giant is developing.

And it’s not just Walmart making moves. Kroger invested in British online grocer Ocado to boost its delivery business and bought the meal-kit company Home Chef. Those moves came at a price of close to $450 million combined.

Target bought same-day grocery delivery company Shipt for $550 million and started a curbside pickup service called Drive Up. This month, the company announced the expansion of both same-day delivery and Drive Up across the Midwest and Southeast.

“A lot of this (activity) relates to the increase in immediate gratification that continues to be required by consumers,” said Mary Rodwogin, managing director of Seattle-based mergers and acquisitions advisory company Exvere. “People seem to be willing to pay a premium to save time and receive their goods without a couple days or longer lead time.”

These innovations make for an exciting era in grocery. Companies are falling all over each other to improve the customer experience, shore up delivery and pickup options and infuse technology into the business.

“There are discussions on groceries being delivered by drone, using cameras in a warehouse for consumers to pick their fruit to confirm it is not bruised, etc,” Rodwogin said. “The difference in this deal compared to others is that it is not a consolidation but creating a completely new structure.”

Think big

The future of this new grocery landscape is in offering better experiences, exciting products, getting them to the customer faster and understanding the importance of delivery, Rodwogin argues. And the companies that get that will thrive.

But to truly compete with Amazon, Ladd says grocers will need to keep in mind one of the company’s leadership principles: Think big. Here’s how Amazon describes the core tenet: “Thinking small is a self-fulfilling prophecy. Leaders create and communicate a bold direction that inspires results. They think differently and look around corners for ways to serve customers.”

Thinking big means acquisitions, Ladd says, major ones. The grocery industry is in this position today because Amazon had the opportunity to acquire Whole Foods to kickstart its brick-and-mortar grocery business. Ladd argues Walmart or Kroger should have scooped up Whole Foods, even if it was just to block Amazon, as there was no other acquisition option out there that would have made the same impact.

Going forward, Ladd says the best way to blunt Amazon’s momentum is to counter one big deal with another: Walmart buying Costco, Kroger buying Target. He could even see Walmart buying a company like Salesforce.

“It’s big thinking that got Amazon in the position where they are today, and it’s big thinking that’s going to be required of other executives if they hope to survive the grocery wars.”

The other winner

Instacart is not a big fan of Amazon. When the Whole Foods acquisition occurred, the rapid grocery delivery company said the tech giant “just declared war on every supermarket and corner store in America.”

But Instacart has actually been one of the beneficiaries of the deal. Instacart raised $150 million earlier this year to double its staff and expand its footprint across North America. It now has partnerships with many of the nation’s top grocers: Albertsons, Kroger, Publix, Ahold, H-E-B, and Sam’s Club.

Speaking at the 2017 GeekWire Summit, Instacart CEO Apoorva Mehta said the Amazon-Whole Foods megadeal has been a “blessing in disguise” for his company.

“At this point retailers are coming to us,” Mehta said. “When the Amazon/Whole Foods announcement happened, essentially every major grocery retailer in the country had an emergency board meeting and right after that board meeting they called us.”

Ladd cites the grocers’ collective turn to Instacart and the failure of any other grocer to scoop up Whole Foods as miscues that could someday hand the industry to Amazon on a silver platter. As if grocers didn’t have enough to worry about with the looming threat of Amazon-Whole Foods as a potential future juggernaut, Ladd predicts an evolution from Instacart that will make it a formidable competitor as well.

“The fact that so many grocery retailers made the decision to sign a contract with Instacart will be documented in case studies one day as being one of the worst business decisions the retailers could have made,” Ladd said. “Why? Because all the leading grocery retailers did was teach Instacart their business and allow Instacart to fully understand each retailer’s strengths and weaknesses. Regardless of the public comments from Instacart that they plan on maintaining their business model, it is clear to me that Instacart will become a grocery retailer; expand into grocery distribution; and expand into private label manufacturing to name a few.”