Tuesday, March 4, 2008

Who Makes Trader Joe’s Products? ........Hint: It’s NOT Trader Joe!
Eighty percent of Trader Joe's products are sold under the company's private label, but TJ's doesn't make them.
When you see that Trader Joe's packaging, the item is actually produced by a
third-party supplier whose identity is kept secret from the consumer, and who also makes other, name-brand products. Sometimes the manufacturer tweaks the product a little for Trader Joe's audience, but usually the food is kept remarkably similar to the original product, even down to copy and photography on the box. In some cases, TJ's sells both its own version and the rumored producer's. But the grocery-store giant's versions are always astronomically cheaper. Although it's impossible to confirm who's producing the goods, you can make a pretty good guess. Here's our take on who's behind the TJ's label.

Retail Grocers have done this for years. They make a deal for specified quantities of a range of products, then they get to specify the packaging and other details. One company that springs to mind is Topco, Inc. Their base line brand is "Food Club" You'll probably find it in a number of smaller chain supermarkets all over the U. S. for example A&P. Most of the items are commodities, like brown sugar, Macaroni and Cheese dinners, Flour, etc. The store operator just wants to get his shelves filled and be up and running as soon as possible. After the basic products are set, he can entertain the offers from the direct brand name brokers, to complete the offering to the public. Everyone who wants to can have their own line of products. Think of Paul Newman's Own. He didn't build a factory; he shopped the food processors for the right deal. I can think of his label coffees and salad dressings. His aim is not to move product but to raise money for his charities, I believe. Judging from your examples, Trader Joe's deserves kudos for working the system to provide these products to a broader market. Sure, its for their profits too. After all they have a business to run. If they can attract new customers who like Toms of Maine toothpaste but would rather save the $2, they get to make the sale. I recently began shopping at a new Trader Joe's here in New York I buy only maybe 10% of my things there; but, I do like their prices, the quality/variety and that I can always find something out of the ordinary in their stores.
This is common practice amongst all mass retailers. Nobody could afford to have a 1,000 different factories producing everything from soap to sushi.