Monday, January 27, 2014

A supplier outed, along with some unsavory business practices

One of the most popular items in Trader Joe's salty snack aisle are these peanut butter-filled pretzels. We used to sell case after case of these on days leading up to big football games, and I can only imagine how many are currently being stocked up in anticipation of the Super Bowl. 

But they've left the owners and employees at a Maxim Marketing Corp., a California-based snack company, with a bad taste. According to a lawsuit between Maxim and Con-Agra, a giant food conglomerate based in Omaha, Con-Agra has stolen Maxim's Trader Joe's business.

Maxim's story is that, for years, Con-Agra supplied the pretzel "pockets" that Maxim filled with peanut butter and then sold to Trader Joe's. I'm not sure if Maxim claims to have actually invented the filled pretzel, but they do sell a similar product that they call, "The Original Pocket Pretzels®". 

Now, it seems that Con-Agra has gone around Maxim, and is filling its own pockets. 

Internally, Trader Joe's talks a lot about it's sharp—some might say, ruthless—buying practices. The story told to employees is that the company cuts costs in order to sell to consumers at the lowest possible price. But while eliminating one step in the peanut butter-filled pretzel supply chain has, presumably, resulted in a cost savings, Trader Joe's sells the Con-Agra product in the same packaging at the same price, $3.79 for a one-pound bag. (Maxim's original pocket pretzels are sold in other outlets, at a suggested retail price of $2.39 per 8 oz.)

Luckily, Maxim has other customers. Trader Joe's buyers love being a small company's only customer, though that has obvious risks because TJ's projects a "South Seas" vibe but the company acts more like a cutthroat pirate when negotiating supply deals. 

Anyway, Maxim will miss the $10M in revenue from selling (my guess) about 7M bags of pretzels to Trader Joe's per year, but it will survive this setback. Whether it succeeds in its suit against Con-Agra will hinge on two things: did their contract include a non-compete clause, and; can a much smaller company possibly win a fight with a giant?






Monday, November 25, 2013

Stuck in line at Trader Joe's? This guy wrote a charming essay about it...

In the produce section of Trader Joe’s store in the Chelsea section of New York, Karl Holman holds an eight-foot-tall sign that reads “End of Line.” It’s six o’clock on a Tuesday, and Holman is managing the line for the second time this shift. While customers test peaches for ripeness, Holman holds the towering metal pole aloft, making the banner’s orange and yellow lettering visible to anyone who gazes up from the shelves. For the next hour, the line’s end moved constantly.

Short and stout, with a salt-and-pepper goatee and a grey Trader Joe’s T-shirt, the forty-nine-year-old Holman addresses a knot of stopped customers who are blocking traffic. “Are you ready to check out?” he asks. “Step right here.” Customers glance at his sign and then file into place.

As the line forms in front of him, he takes tiny backwards steps to keep pace with its telescoping end. His moving target keeps him in motion, and he marks it with the dedicated poise of a Beefeater at Buckingham Palace. 

Starting by the tubs of cut pineapple, he inches deeper into the produce area, backing past the baby carrots and fresh herbs, past the clear bags of salad greens, and, while smiling and greeting passersby with a “Hi, how are you?” he hooks around a freestanding rack of fruit before stopping near the entrance. In a few minutes' time he has traveled so far back that, without meaning to be metaphysical, he has transcended the proverbial end of the line and arrived at the beginning.

To read the rest of author Aaron Gilbreath's wonderful essay, and see more of illustrator Marc Pearson's cartoons of life in a busy Manhattan Trader Joe's store, check out Narrative.ly

Friday, November 15, 2013

It's not a SNAP, but we could eliminate food injustice


There’s been a lot of talk over the last couple of weeks about the reduction in SNAP (aka ‘food stamp’) benefits, which were the result of the end of the 2009 American Recovery and Reinvestment Act.

Although I’ve never received SNAP benefits — in fact, as a foreigner there’d be a five year waiting period, and after that, as an able-bodied adult without dependents I could only collect benefits for three months in any three-year period — I did work in the grocery business for a year while researching my book Build a Brand Like Trader Joe’s. I’ve got plenty of experience with the SNAP program from the other side of the cash register.

At the Ward Parkway Trader Joe’s store in Kansas City we served a very diverse community because the location was essentially astride two very different neighborhoods. The area west of our store, in Johnson County, Kansas, was upscale and predominantly white; the sort of well-off Republican voters who tend to sympathize with old Mitt Romney’s characterization of people receiving benefits as ‘takers’. The area immediately east of our store was also predominantly white but not as well off — the arty/liberal enclave of Waldo. 

Troost Avenue was about a mile east of our store. Anyone who knows Kansas City knows that Troost has long been the border of the predominantly African-American community. Much of the landscape beyond Troost is pretty grim; it features drugs, gangs, and a school system so bad that the state of Missouri wrested control of it from school board.

While researching Build a Brand Like Trader Joe’s I handled hundreds (probably thousands, but I wasn’t counting) of SNAP transactions, serving people of all ages and ethnicities. Some looked ‘poor’ although our store was not really that easy to get to, if customers didn’t at least have access to a car. Most looked like many other ‘cash’ customers, which is consistent with the observation that most families that receive SNAP benefits are headed by adults who have jobs, albeit low-paying ones. I did EBT transactions for a few Trader Joe’s crew members, which tells you something; even though the store paid far better-than-average wages in the retail sector, most employees still qualified.

(As an aside, the well-off white customers from Johnson County often displayed the gulf of understanding between the 1% (or maybe the 10%) and the working poor in the service sector. I remember one guy about my age, obviously pretty well off, who commented that my job seemed a lot more fun and social than his job as an accountant. He told me, “I wish I could work here.” I told him that he’d have to be ready to take a pay cut. “Yeah, I guess I couldn’t afford it,” he said, adding “What do you guys make? Like, $20 an hour?” I just smiled and shrugged it off, but I thought, Is that really what you think?)

I can tell you from experience that most people who bought food with EBT cards weren’t buying booze as well (even though we sold plenty of beer and wine to people paying conventionally.) I saw one clear-cut case of something many people would’ve called ‘abuse’ of the SNAP program: a woman buying about 10 cans of tuna told me, “They won’t let you buy pet food with food stamps, so I feed my cats tuna.”

By and large, the nutritional choices made by EBT customers were no worse than the choices made by the other customers. I often saw EBT customers make conspicuously good choices, which is to say their carts arrived full of ingredients, not prepared foods. 

Ironically, poverty in America is marked by obesity, not starvation. The issue is clearly not that many people will starve because SNAP benefits have been cut, or would starve if they were eliminated altogether.

Anyone with a nuanced understanding of the American food industry knows that the system is stacked against a healthy population, from corn subsidies on down. This has resulted in a situation where Americans spend a very small percentage of their income on food, but 10 times as much as other developed nations on health care.

I’m not going to solve this problem in a single blog post, but I’ll tell you this: Some of the SNAP recipients who live east of Troost in Kansas City managed to get to Trader Joe’s. But many of the people who need SNAP benefits live in neighborhoods that are food deserts. Those people have no choice but to use their SNAP funds to buy expensive, unhealthy prepared foods in bodegas, convenience stores and gas stations.

Rich white people who are obsessed with ‘food stamp fraud’ would eliminate far more waste— and save far, far more on future health costs — by spending their time and effort figuring out ways to make healthy food available in poor neighborhoods.

The reduction in SNAP payments is a tiny part of a much larger food injustice issue. Let me tell you this: if the U.S. really set out to solve the problem of food injustice in its inner cities — if the country really made it a priority and, step by step, did whatever it took to ensure that the country’s urban poor understood and had access to proper nutrition — in the process of solving those problems, all the other problems of the inner city including crime, gangs & drugs; the collapse of public education in the inner city; the whole fucking poverty cycle... You’d wake up one morning and realize that you’d solved all of those along the way.

Happy Thanksgiving.

Wednesday, November 13, 2013

Another Trader Joe's supplier outed, thanks to a food poisoning outbreak

From this...
A tiny corner of Trader Joe's famous veil of secrecy was lifted last week, as Richmond CA-based Glass Onion Catering was identified as the source of Trader Joe's “Field Fresh Chopped Salad with Grill Chicken” and “Mexicali Salad with Chili Lime Chicken.”

That news emerged when Glass Onion was identified as the source of an e-coli outbreak that had sickened at least a couple of dozen customers in the western states. The company also supplies "Wheatberry" and "Southwestern" salad 'kits' to Whole Foods.

...to this. Brought to you by e.coli.
Personally, I think that anyone who buys a chicken salad made days ago and hundreds of miles away is playing fast and loose with their digestive tract anyway. If you're hung up on TJ's Mexicali Salad, try making it yourself with this recipe.

Friday, September 27, 2013

A top-10 finish in Ad Age's book poll!


Build a Brand Like Trader Joe's finished 8th overall in Advertising Age's "Best summer marketing reads" book poll! Thank-you to the readers who noticed my title in the contest, and voted for it.

Wednesday, September 11, 2013

Give the TJ's brand credit where it's due: Vote on AdAge.com!

Advertising Age is running a contest to determine the best summer marketing read. Give Trader Joe's brand credit where it's due, but going here, and voting for "Build a Brand Like Trader Joe's".

I'll be honest with you; Ad Age doesn't make voting that easy (unless you're already a registered site user, you'll have to register.) But, if you choose to register by linking to your Facebook page it's a little easier, and Ad Age is not a FB abuser -- they won't, for example, insist on posting on your behalf. 

Please vote! Hey, it's Build a Brand Like Trader Joe's, it's not like you're casting a ballot for Anthony Weiner.

Thursday, July 25, 2013

Trader Joe's tops one customer survey, flops another

A survey of over 6,000 people by Market Force recently concluded that Trader Joe's has the most-satisfied customers, and the ones most likely to recommend the store to others.

Quel surprise, eh? Or not.

What I find interesting about the Market Force survey is that it supports the thesis of my book, "Build a Brand Like Trader Joe's".


You can see that when customers are asked to rank the 'empirical' factors like price and selection, Trader Joe's rarely figures. Obviously, its fans like the selection of unique items, so it does well in selection, but that's it.

By contrast, when it comes to the touchy-feely criteria, Trader Joe's rocks it...

...though one has to wonder about that "Fast Check-out" ranking! They must have limited their survey to shoppers who buy groceries before noon on Mondays and Tuesdays. But seriously, folks; as I note in my book, a cheerful checkout clerk undoes the frustration of those long checkout lines. That's what this survey reflects.

My premise, that the staff is what really creates the Trader Joe's brand experience, is supported by some of the many comments that have cropped up online, in the wake of this story breaking.


And, as I note in "Build a Brand Like Trader Joe's", the way you get that superior staff interaction is by paying a little more. Increasingly, customers are aware of the implications of shopping in stores that refuse to pay a living wage...


Meanwhile, in other survey news...

It seems as if Consumers Union, the activist arm of the respected magazine Consumer Reports, timed the release of information about its own Trader Joe's survey to coincide with news about its #1 status among grocery customers generally.

Consumers Union has been working hard for the last year or two to make Trader Joe's the poster child for its campaign to reduce antibiotic use in the livestock industry. It surveyed over 1,000 Trader Joe's customers and learned that...
  • 87 percent of Trader Joe's shoppers agreed that supermarkets and meat suppliers should work together to avoid giving food animals antibiotics unless they are sick, compared to 79 percent of other store shoppers
  • Only 23 percent of Trader Joe's meat shoppers were aware that the store sells meat raised on antibiotics but 72 percent were concerned about this policy
I address the disjunction between what Trader Joe's does, and what its customers think it does in my book.

For more information on the antibiotics in TJ's meat issue, click here.