Sunday, March 31, 2013

Lawsuit labels Trader Joe's as liars

I see on the Huffington Post that Trader Joe's will have to defend itself in a class-action lawsuit over misleading labeling. Specifically, the suit refers to 'evaporated cane juice', listed as an ingredient in Trader Joe's yogurt. Evaporate cane juice, by another name, is simply sugar.

'Evaporated cane juice' = sugar. Although much commercial sugar is extracted from beets, sugar from the two sources is chemically identical. In fact, virtually all sugars are nutritionally identical. But 'evaporated cane juice' certainly sounds a lot healthier than 'high-fructose corn syrup'.
Although the U.S. Food and Drug Administration has officially banned the use of the term, but Pierce Gore* - a San Francisco-based consumer affairs attorney who has launched dozens of similar suits - claims Trader Joe's continues to use the term in a fraudulent attempt to make its prepared foods appear healthier than they really are.

I was interested to read some of the comments that appeared on Huffington's post about the suit, because they underline key points that I made in Build a Brand Like Trader Joe's -- mainly that the company's devoted fans will leap to its defense even when, as in this instance, critics have a solid case.

One poster asked, "How stupid would consumers have to be, not to realize that 'evaporated cane juice' was just another name for sugar?" Obviously, Trader Joe's doesn't think consumers do know that it's just another name for sugar; if they did, they'd just list 'sugar'.

Another pointed out that since a lot of sugar comes from beets, which are often GMO, by listing evaporated cane juice, Trader Joe's was reassuring customers of the non-GMO source of the sweetener. Leaving aside the fact that there is no genetic material in sugar, rendering GMO fears moot, that defense begs the question, why not list 'cane sugar' as the ingredient? Doing so would obviate any criticism of disingenuous labeling.

When I worked at Trader Joe's, I rolled my eyes when I saw that 'evaporated cane juice' ingredient. Notwithstanding Trader Joe's ardent defenders on HuffPo, the truth is that the company actively seeks to abet the conflation of terms like 'all natural', 'organic', and 'healthy' in its customers' minds.

Prepared foods account for the lion's share of Trader Joe's profits, and per square foot, the frozen foods section is the most profitable section of the store. And while virtually everything in there is 'all natural', and much of it is 'organic', those convenient meals are loaded with fat, calories, and especially sodium. (When I was being trained, I was warned that one question I was bound to get was, "Why is there so much salt in Trader Joe's foods?" I was told to answer that Trader Joe's never used artificial preservatives, and salt was necessary as a natural one." I was, like, Yeah but we're talking about food that's frozen.)

For those in the know, Trader Joe's spokesperson Alison Mochizuici's official statement that the company won't comment on pending litigation is kinda' funny; the company won't comment on anything, more like it. Gore, the lawyer, will either win this one or force Trader Joe's to settle and change at least one (highly) questionable labeling practice. If the management is smart, it will take this opportunity to bring both labeling and, over time, formulations of prepared foods into line with the perception people have of the brand.

*Yes, he's the Al Gore's cousin.

Wednesday, March 13, 2013

Message to retailers: Greedy for increased profits? Then pay rank-and-file staff more

Costco's CEO Craig Jelinek is an outspoken proponent of an even-higher minimum wage than the one proposed by Obama in the most recent State of the Union address. Costco is, in fact, a sort of poster child for higher salaries for front-line retail employees.

Most retail employees earn less than Obama's wished-for $9/hour minimum rate. And while Republicans howled that raising the minimum to that level would bankrupt businesses or, at the very least cause them to stop hiring altogether, Costco's latest quarterly report proves that it's far-more-generous pay-and-benefits package hasn't hurt profits. In fact, Jelinek believes it's helped the retail giant to a quarterly profit of $537 million -- a 35% increase over the same quarter last year. By coincidence, Costco's per-employee profit is about $10,000, which is about 35% more than Walmart's.

Vice-President Joe Biden was disappointed that Costco didn't carry shotgun shells, but otherwise pleased that Costco co-founder Jim Sinegal (center) and current CEO Craig Jelinek generally support progressive policies. Jelinek recently suggested that $10.10/hour would be an appropriate minimum wage.
The average Costco worker earned $45,000 last year -- almost triple the average employee of Sam's Club (a similar warehouse store owned by Walmart). The majority of Costco's full- and part-time workers are covered by health insurance, too.

According to Jelinek, “At Costco, we know that paying employees good wages makes good sense for business. Instead of minimizing wages, we know it's a lot more profitable in the long term to minimize employee turnover and maximize employee productivity, commitment and loyalty."

While Trader Joe's will never release profitability figures, it's certainly another highly profitable retailer that offers far better than average salaries to customer-service staff. When I was researching my book, Build a Brand Like Trader Joe's, I found tons of evidence to suggest that the correlation between higher wages and higher profits is general; it's not something that only works for certain retailers, like Trader Joe's and Costco. In Trader Joe's case, higher wages allow the chain to selectively hire the kinds of employees who will build the store's unique, idiosyncratic brand, too.

Monday, March 11, 2013

Lots 'o people love Trader Joe's. But not like Nico Lang

Millions of people love Trader Joe's. I wrote a whole book about how that happened. But Nico Lang -- whose work often appears on Chicago's NPR mega-station WBEZ -- has taken TJ's love to a new level, pledging to marry Trader Joe's.

I don't know whether Nico wants to marry the entire chain, or just one Chicago store. Or, if Illinois approves gay marriage, maybe he'll marry Joe Coulombe (though I doubt the original 'Joe' is up for it.)

In a long post on the well-written Thought Catalog blog, Lang rhapsodizes about the marriageability of Trader Joe's, comparing it favorably to such presumably marriage-worthy stars as Ryan Gosling and George Clooney.

Nico's essay may be tongue-in-cheek, but it's interesting to me that he makes a couple of points that I made in my book. (I'm not saying he listened to my interview on WBEZ, but he might have...)

You might think that we’re in the honeymoon period and that I can’t see your flaws, but I accept you — for whatever you throw my way. Is that price not correctly marked? Is the food not always as healthy and organic as it appears? You think that I just see food that tastes good and don’t think about the politics behind it? I know why I have to travel from my “diverse” neighborhood a half an hour by bus to get to you, and why you only seem to be located in “white” neighborhoods. I understand food deserts. I know what your deal is.
I’m ready for a real relationship with you, which means calling you on your bullshit and knowing that your parents (or society) made you this way. They screwed you up, but we get better when we help each other. I see the good in you and know that sometimes instead of throwing the food that has “gone bad” away, you donate it or leave your dumpsters open for garbage pickers to reduce your food waste. You’ve got some baggage, but you’re also a force for good in the world. You care.
What fascinates me still, is that Trader Joe's fans cut the chain so much slack, in exactly the way that we excuse flaws in our friends that we'd find totally irritating in strangers. When he says, "Is the food not always as healthy and organic as it appears? You think that I just see food that tastes good and don’t think about the politics behind it?" it's as if he's been reading this blog.
Nico has an idealist's view of marriage as something you work on. "Is the food not always as healthy and organic as it appears? You think that I just see food that tastes good and don’t think about the politics behind it?" The implication is, of course, that Trader Joe's will actually listen.
"We have to talk" is not something that Trader Joe's famously close-mouthed senior management is ever going to respond to...