In almost all regards, it was the only viable “out” for Whole Foods Market, Inc. (NASDAQ:WFM), as well as the next natural progression for Amazon.com, Inc. (NASDAQ:AMZN) and its grocery ambitions. Ergo, it was no real surprise for owners of AMZN stock to learn on Friday morning that the e-commerce giant is seeking to acquire struggling Whole Foods Market, offering $42 per share of WFM stock to get the deal done.

It’s unlikely the Department of Justice will have any antitrust concerns, and it’s equally unlikely Whole Foods shareholders will balk — they’ll just be happy to be out of a grim situation.

Happiest of all, though, should be Amazon stock holders. This acquisition could give AMZN a high-quality toehold in a grocery industry it has been eyeing for a while.

Amazon to Acquire Whole Foods

The deal, which values Whole Foods at $13.7 billion, was announced by Amazon this morning. A statement from Amazon CEO Jeff Bezos explained:

“Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy. Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades – they’re doing an amazing job and we want that to continue.”

It’s hardly the company’s first venture into food-retailing. The company’s grocery-delivery business called AmazonFresh began beta-testing in Seattle a decade ago, and over the course of the past couple of years has been rolled out to a handful of major markets. Late last year it began testing the idea of cashier-less convenience marts, and this year it’s launched a couple of drive-thru locales where customers can have their groceries brought to their car after ordering them online.

The purchase of Whole Foods Market, however, is the first chance Amazon will get to go truly head-to-head with rivals like Kroger Co (NYSE:KR) and Wal-Mart Stores Inc (NYSE:WMT).

Worth the Effort

The integration and overhaul of Whole Foods Market won’t be easy.

A couple of decades ago, Whole Foods worked because there were only a handful of stores addressing a niche market, and more traditional grocers weren’t even interested in getting into the organic food and healthier-eating business. As is so often the case, though, competition like Kroger crept into the space, and overaggressive expansion on the part of Whole Foods left it with more stores than it could really afford to operate.

There’s also the not-so-small matter of earning the nickname “Whole Paycheck,” with many would-be buyers finding its fare increasingly unaffordable.

Still, Whole Foods Market is salvageable. That’s largely why activist investor group Jana Partners took on a controlling stake in April. Better technology, a board shakeup and other fixes were all part of a plan to get the company bid-ready for a suitor. One clearly emerged, perhaps even sooner than Jana was expecting. Whatever the case, there’s little doubt that Jana had a lot to do with getting the deal done.

The integration of Whole Foods will be worth it though. U.S. consumers spend about $600 billion every year on groceries, and that figure gets bigger every year.

It’s not a terribly profitable business to be in; Kroger’s net margins are on the order of 2%. Amazon is no stranger to thin margins though, and Amazon is able to monetize its customers in a myriad of ways traditional grocers can’t.

Looking Ahead for AMZN Stock

Don’t look for the acquisition or an expansion beyond Whole Foods Market’s current footprint to beef up the value of AMZN shares right away. Amazon itself is still figuring out how to “do” groceries, and it’s going to want to rebuild Whole Foods from the ground up … at least to the extent Jana Partners hasn’t yet. That’s going to take time. Nevertheless, this is another bullish feather in Amazon’s cap.

Be that as it may, while there may not be a lot of profit in the grocery business, there’s a ton of consumer and lifestyle data packed into people’s shopping habits.

If you’re buying snacks in early February, you’re probably a football fan prepping for a Super Bowl party. If you’re buying deli meat, you likely also want bread and mustard. If you’re buying a kids cereal every week, you probably (though not necessarily) have kids.

This kind of data will make Amazon an even more potent marketer, serving as an entry point into other aspects of those consumers’ lives.

And if nothing else, Whole Foods Market stores give AmazonFresh some already established online-order pickup locations. In other words, this really is a growth pillar for Amazon, and not just on the heels of grocery sales. It could take a few quarters to get there, though.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.