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PORTSIDE CULTURE

WE NEED TO TALK ABOUT TRADER JOE’S  
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Adam Reiner
April 1, 2024
Taste Cooking
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_ Behind the bubbly cashiers in Hawaiian shirts, craveable snacks,
and bargain-basement prices are questionable business practices that
have many food brands crying foul at the company’s blatant and
aggressive copycat culture. _

Trader Joe's copying products, Taste Cooking

 

Chitra Agrawal doesn’t want to talk about Trader Joe’s anymore.
She vividly remembers the deluge of direct messages she received from
customers on her company’s social media accounts in the summer of
2021. Is this you guys? You got into Trader Joe’s?! The response was
overwhelming—but also confusing. Brooklyn Delhi, the condiment
company she’d founded in 2014 offering boldly flavored Indian
pickles and chutneys, wasn’t sold at Trader Joe’s. But six months
earlier, she’d been approached by Trader Joe’s executives about
partnering together. “I felt like I’d been sucker punched a little
bit,” Agrawal recalls. Earlier that year, she’d provided them with
samples, including wholesale pricing for some of her signature
products, like her Coconut Cashew Korma and Roasted Garlic Achaar.
Then communication went dark. According to Agrawal, a food industry
veteran with over 15 years of experience, it isn’t unusual for
negotiations to go quiet when you’re engaged with a major retailer.
What happened next was the unusual part.

Agrawal learned in August via messages from friends and social media
followers that Trader Joe’s had launched its own proprietary garlic
achar product with a similar set of ingredients and a similar label
design to Brooklyn Delhi’s popular simmer sauces. Trader Joe’s
even spelled its product’s name the same way—with three As
(“achaar”), instead of using the traditional spelling which has
only two (“achar”). (Agrawal intentionally chose to spell the
word, which means “pickled” in Hindi, more phonetically to make
the product easier to pronounce for non-Indian buyers.) Even though
traditional achar is made with raw garlic, Trader Joe’s roasted the
garlic in its formula (although in diluted, pureed form), mimicking
the signature twist that makes Brooklyn Delhi’s product so unique.

Agrawal took to Instagram to set the record straight, clarifying that
her company was not behind the watered-down Trader Joe’s version.
Even though she understood that her company owned no rights to achar
itself—recipes, after all, cannot be trademarked—she couldn’t
shake the feeling that she’d just gotten played.

After six months of conversations with five founders of small to
midsize food brands, it appears to be an open secret in the consumer
packaged goods industry that Trader Joe’s outsources inspiration for
new products by targeting emerging brands under the guise of
recruiting them to manufacture private-label items. Private labeling
is the ubiquitous (and often clandestine) practice of consumer food
brands creating exclusive products for third-party retailers. The
terms of these contracts vary, but the enlisted food brand typically
receives compensation in the form of a production fee or
profit-sharing arrangement.

According to these sources, Trader Joe’s commonly solicits product
samples and even asks for potential recipe adjustments—a revealing
and time-consuming exercise for bootstrapped founders—before
inexplicably abandoning the negotiations and releasing its own
private-label versions of similar products at lower prices.

“They’re specifically doing this to diversity brands, or so-called
ethnic brands,” the founder of one gourmet food company told me on
the condition of anonymity to avoid unwanted media attention. Before
the COVID-19 pandemic, the New York–based founder had corresponded,
through phone calls and emails, with the Trader Joe’s product team
over the course of several months about private labeling two of his
products, a spicy condiment and a jarred simmer sauce. “Ethnic foods
are specialized items; there’s so much history and culture and
tradition that you can’t do simple knockoffs like you do with
everyday items like ketchup or mayo,” he said. “You need brands
like ours to educate you.”

The Monrovia, California–based Trader Joe’s, which owns and
operates 545 stores in 42 states plus Washington, DC, is a widely
loved brand with a motivated fan base. Trader Joe’s aficionados
regularly brave crowded stores and long lines to stock up on signature
frozen meals, like its wildly popular Mandarin Orange Chicken and
Cauliflower Gnocchi, as well as quirky private-label snacks like
Peanut Butter Filled Pretzel Nuggets and Baked Cheese Crunchies. But
behind the kitschy grocery chain’s public face, with its superficial
good vibes and Hawaiian-shirted cashiers, is a litany of thorny ethics
and questionable business practices surrounding how it handles
sourcing and packaging certain private-label ethnic food products.

The original Trader Joe’s store opened in Pasadena, California, in
1967. Its founder, Joe Coulombe, sought to distinguish his eccentric,
nautically themed grocery brand from the wave of convenience stores
like 7-Eleven that were popping up all over the state at the time by
offering a large, curated selection of reasonably priced gourmet
foods, like hard-to-find wines and cheeses, from all over the world.
The company struggled in its nascent years, but the breakthrough came
in 1972 when Coulombe produced the store’s first private-label
product, a proprietary granola that undercut the competition on price.
Today about 85 percent of Trader Joe’s inventory is private label.
“Keeping things in our label as opposed to the brand-name label or a
supplier’s label helps us keep our costs low,” said Tara Miller,
currently Trader Joe’s VP of marketing, on the Inside Trader Joe’s
podcast in 2018.

An important aside: I occasionally buy food from Trader Joe’s. I
understand the reality that, for many consumers, the store’s
everyday low prices make it an appealing place to shop, especially as
inflation soars to historic levels and grocery prices have risen 25
percent over the past four years alone. Last week, even Trader Joe’s
announced it was raising its price on individual bananas from 19 cents
to 23 cents—the company’s first price hike in over 20 years.
Compared with other national grocery chains like Whole Foods, Trader
Joe’s is still a significantly cheaper source for many pantry
staples and other basics like cereal and eggs. This holds true even
when comparing private-label items—I recently found a five-pound bag
of organic all-purpose flour selling for $8.69 at Whole Foods (365
brand), compared to $4.99 at my local Trader Joe’s. The store’s
well-curated selection of convenience foods, particularly those found
in the frozen food aisle, comprises a relative United Nations of
cuisines from around the globe, tailor-made for the air fryer economy.

“It’s an affordable grocery store for gourmet or gourmet-leaning
items, depending on how you define ‘gourmet,’” says Alex Beggs,
who reviews Trader Joe’s products in a seasonal online column for
Bon Appétit. Beggs, herself an avid Trader Joe’s shopper and
occasional TASTE contributor, offers candid takes on new product
releases, helping readers separate the hits from the misses. “It’s
a grocery store, but it’s full of little treats, and we love treats
as a species,” she says.

Private labeling has been instrumental to Trader Joe’s growing
success. “It made private label feel not private label,” says
Andrea Hernández, an erudite observer of the snack food and grocery
space in her popular Snaxshot newsletter. “So it still felt like a
discovery, as opposed to [house-brand products like] 365 at Whole
Foods or Kirkland at Costco, which are packaged very generically.”
According to Hernández, Trader Joe’s branding has a unique appeal
for millennial and Gen Z consumers who gravitate toward product
“dupes”—private-label items that are indistinguishable from the
name brands—that make them feel like they’re hacking the grocery
aisle. “All the articles about Trader Joe’s from a millennial lens
talk about dupes,” she says. “The rebranding of private label as a
budget hack resonates with our generation.”

The ethnic food aisle is not the only victim of Trader Joe’s product
duping; its stores are filled with private-label spins on many
mainstream corporate snack foods, too. Ritz Crackers are rebranded as
Golden Rounds, Oreos are called Joe-Joe’s, and Pringles are
repackaged as Sea-Salted Saddle Potato Crisps. In fact, many large
corporations like Pepsi and Conagra are suspected of cooperating with
Trader Joe’s to manufacture cheaper versions of their own products
for private labeling.

But Trader Joe’s hijacking the ethnic food aisle and flooding the
market with cheap knockoffs is more frustrating to so-called baby
brands like Brooklyn Delhi, who feel like they’ve created niche
lanes for certain products that didn’t exist before. Unlike large
conglomerates, smaller brands often can’t scale production to meet
the price demands associated with private labeling for large retail
companies. For them, the Trader Joe’s dupes are capitalizing on
their years of product development and marketing. “After I posted on
social media,” Agrawal says, “a number of other food brands
started messaging me and saying they’d had similar experiences with
Trader Joe’s. Apparently it’s a known thing among food
artisans.”

In the summer of 2019, more than a year before Agrawal was first
approached by Trader Joe’s, Auria Abraham of Auria’s Malaysian
Kitchen received an email from a “product innovator” with an
official Trader Joe’s email address about private labeling her Lime
Leaf Sambal for nationwide distribution in its stores. “When you get
that email, it’s like, ‘Wow! Is this going to blow the top off my
business?’ In a good way,” she says. According to Abraham, the
parameters of the deal required her to partner with a specific
co-packer (a third party that handles the manufacturing) based in
California. Abraham exchanged several calls and emails with the
co-packer in late 2019, but the financial terms were onerous, leaving
Abraham feeling uneasy about a potential partnership. In return for
private labeling her product for Trader Joe’s, she was told she
would receive a modest finder’s fee based on the co-packer’s
profits—not a percentage of Trader Joe’s sales.

After sharing samples with the co-packer and sending a counteroffer
asking for greater transparency, she never heard back from him or from
Trader Joe’s. Within a matter of months, Trader Joe’s released a
product with a similar recipe and flavor profile that it called
Thai-Style Green Chili Sauce. Its sauce was also made with jalapeño
and Auria’s signature sambal ingredient, makrut lime leaves (Trader
Joe’s labeled them as “Thai lime leaves” on its product’s
jar).

The company is notoriously tight-lipped about its private labeling
process. Responding to a request for comment about the allegations of
copycatting alleged by multiple sources in this article, a Trader
Joe’s spokesperson wrote: “When we develop our products, we meet
with many potential producers to determine which can best deliver on
food safety, production capacity, product quality, and price. We are
proud of our long history of supporting vendors and their growth with
us. For a range of reasons, we are unable to work with every company
we contact and realize our decisions to not pursue certain products
can be disappointing.”

But the founders I spoke to, who share years of extensive experience
collaborating with other major food retailers, including companies
that also offer private label products in their stores like Costco,
Target, and Whole Foods, all described Trader Joe’s shadowy tactics
as an outlier in the industry. They’re left wondering whether Trader
Joe’s negotiates with prospective partners in good faith.

Beyond emulating recipes, Trader Joe’s also has a reputation for
shamelessly copying the package designs of established products in the
ethnic food space. One founder of a popular ethnic food brand told me,
on the condition of anonymity due to a non-disclosure agreement, that
their company threatened legal action against Trader Joe’s in 2019
for infringing on trademarked packaging design. “Their product line
looked incredibly similar to ours in terms of color choices, patterns,
borders, and font,” they recall. “It was kind of uncanny.” The
founder, whose products are sold in over 15,000 stores across the
United States, initially shrugged it off, but as the confusion grew
among their clientele base, they decided to lawyer up. Trader Joe’s
eventually capitulated without the founder bringing suit, agreeing to
make minor cosmetic changes to its packaging, including altering label
motifs and adjusting the color scheme slightly.

“It reminds me of the fast fashion model,” says Jing Gao, who
founded the wildly popular Fly By Jing brand of Sichuan chili crisp.
“Trader Joe’s is like the food version of Zara or Shein. The way
that these big houses keep up with so much innovation so quickly is by
copying independent designers.” Trader Joe’s executives approached
Gao about private labeling at Natural Products Expo West in 2022.
According to Gao, a company representative told her, referring to her
popular chili crisp, “We’ve been trying to replicate this flavor,
and we can’t get it right.” Gao made it clear that she would only
consider partnering with the company if it was also willing to carry
her Fly By Jing brand in its stores. That turned out to be a
dealbreaker, ending the conversation on the spot.

Last year, Fly By Jing collaborated with another baby brand, Little
Sesame, to release a limited-edition hummus topped with Fly By
Jing’s chili crisp. They launched the product to great fanfare at
Expo West in early 2023, where Trader Joe’s product innovators are
known to roam the aisles of the Anaheim Convention Center. About three
months after the event, Trader Joe’s released a similar hummus
product with its own proprietary chili crisp for less than half the
price. “With food, just like with fashion, whenever something is
cheap, somewhere along the line, someone is being taken advantage
of,” says Gao. “As with Zara and Shein, they sniff out the latest
trends and replicate them quickly and cheaply. Those companies
specifically target young, up-and-coming designers because they know
they won’t get called out for it.”

Unlike other companies that innovate by creating new products and
product categories, Trader Joe’s recipe for innovation relies on
harvesting knowledge and expertise from third party vendors to bring
existing products under the Trader Joe’s banner. Co-opting the ideas
of established artisans, whether those brands end up as partners or
not, seems baked into its product development methodology, a tactic
that the company justifies as part of its crusade to provide customers
with more affordable groceries. “You can have a fantastic product,
that everybody knows is fantastic, but it doesn’t belong at Trader
Joe’s because the value just isn’t there,” said Lori Latta,
Trader Joe’s VP of Product Innovation, during an interview on PLMA
Live. “And if we find products like that, we do everything we can to
either find another source for something similar—we’re not copying
other people’s things—or we work with suppliers to make those
prices more reasonable. But if it’s not great value, we don’t
bring it in.”

But the unnamed New York–based founder I spoke to believes that
Trader Joe’s hides behind price to sandbag negotiations with small
brands. Less than six months after it approached his company about
private labeling, Trader Joe’s released not one but two jarred
condiments similar to his. He had sent them multiple samples of both.
“They give you a price point that they know you can’t meet, so you
gracefully bow out. That gives them the legitimate green light to
knock you off,” he said. “And then a couple of months later, they
launch the same products.”

To his point, most of Trader Joe’s private-label products are priced
so low that baby brands can’t meet the company’s wholesale price
requirements. Abraham says that had she private labeled her Lime Leaf
Sambal with Trader Joe’s using the original recipe, her wholesale
unit cost to them would’ve been around $7. The Thai-Style Green
Chili Sauce that the company released after their negotiations stalled
went on sale for a mere $2.99, a sweet spot for many of Trader Joe’s
ethnic food products. In other words, it would be impossible for her
company to manufacture a product that could meet Trader Joe’s price
targets without compromising quality. (Trader Joe’s did not respond
to our repeated attempts to verify the details of its correspondence
with the company founders we interviewed and refused to answer pointed
questions regarding the allegations outlined in this article.)

Copycatting baby brands is not the only controversy related to ethnic
food labels that has embroiled Trader Joe’s in recent years. In
2020, the company faced public outcry over the store’s racially
insensitive packaging, such as private-label brands like Trader José
beer and Trader Ming’s frozen Asian meals. The company initially
sounded contrite on the issue, but it later refused to change many of
its product names, arguing that it did not believe the labels were
racist. On a recent visit to a location in New York City’s Upper
East Side neighborhood, I found both Trader José and Trader Ming’s
products currently on sale. (Trader Joe’s ignored multiple requests
for comment regarding the accusations of racially insensitive
packaging and refused to provide specific details about which, if any,
labels had been discontinued.)

The beachcomber ethos of Trader Joe’s evokes the tiki aesthetic that
some believe inspired Coulombe, a self-professed admirer of the iconic
California tiki bar Trader Vic’s, to name his store after it. But
just as the tiki cocktail movement has had its own reckoning with
cultural appropriation, the exoticism at the heart of Trader Joe’s
feels less charming today than when the company was
founded—especially against the backdrop of blatant copying from
minority-owned brands. “The whole business model of Trader Joe’s
is based on racial insensitivity,” says Preeti Mistry, a
California-based chef and author of The Juhu Beach Club Cookbook.
“It’s called ‘Trader Joe’s.’ It’s basically a white guy
named Joe who travels the world and brings these delicious foods to
your neighborhood.”

A common feeling among the purveyors I spoke with for this article is
that Trader Joe’s is squandering the opportunity to shine a light on
small brands, especially ones with unique global flavors like Brooklyn
Delhi and Fly By Jing. “They could be showcasing the actual people
that are making this stuff,” says Gao, “instead of cutting corners
and finding cheap ways to make it, then taking credit by calling it
‘Trader José’ or whatever. That’s a colonial mindset.” Gao
and others agree that Trader Joe’s duping ethnic brands makes it
more difficult for them to introduce the public to new product
categories when they have to contend with Trader Joe’s undermining
their efforts with watered-down versions of the same products.
“We’re building a category and educating people about what this
is,” says Gao. “To have that opportunity be taken from you as a
small brand is pretty shitty.”

In 2022, two years after Trader Joe’s abandoned negotiations with
Abraham, a new point of contact on the product innovation team reached
out to her about partnering together, expressing interest in several
of Auria’s products, including her Salted Caramel Kaya. By then,
Abraham had caught wind of what happened to Brooklyn Delhi, and she
was not willing to travel that road again. “Perhaps now would be a
good time for Trader Joe’s to put our brand on your shelves under
our own label to show that Trader Joe’s supports small
businesses,” Abraham wrote back in an email she shared. The 12-word
response was clear: “Thanks for the suggestion, but we are only
interested in private label.” That was the last contact Abraham has
had with anyone from the company.

There is little optimism among my many sources that Trader Joe’s
tactics will change anytime soon, especially when affinity for the
brand has never been higher, and the company’s rabid fans remain
addicted to their weekly TJ’s runs. “There’s always going to be
a place for Trader Joe’s because of the fucked-up fact that people
don’t have any time or money,” says Mistry, “and that’s just
getting worse.” Rising grocery prices make the value proposition of
shopping at a place like Trader Joe’s even more attractive. But
small food brands are determined not to let corporate bullies break
their independent spirit. For most of them, like Agrawal’s Brooklyn
Delhi, it still feels like an uphill battle. “The only way it’s
going to change is if consumers do something about it,” she says.
“But if they keep wanting the same cheap knockoff products, then
Trader Joe’s is going to keep peddling them out.”

* Trader Joe’s
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