Trader Joe’s has mastered the art of developing a cult-favorite brand, thanks to its low prices and quirky food selection.
The chain is known for creating fresh, frozen and packaged meals and snacks under its Trader Joe’s brand, with some products being an obvious riff on popular selections from name brands.
But a new investigation aside Taste has found that making Trader Joe’s-branded items can have a darker side than simply reproducing big company favorites: Some small brands claim that Trader Joe’s copied their ideas and intentionally priced them out of business.
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To offer such low prices, Trader Joe’s will purchase products directly from the supplier and rebrand the product with its own name: For example, if the company wanted to purchase Sabra’s hummus, instead of selling it to customers in Sabra’s packaging, the grocer will purchase directly from the Sabra distributor and repackage it.
However, several smaller companies have reported this Taste that Trader Joe’s copied their recipes and packaging after contacting smaller companies and asking about their products and distribution process.
“Their product line looked incredibly similar to ours in terms of color choices, patterns, borders and fonts,” said the founder of an ethnic food brand that was set to partner with Trader Joe’s. “It was a little disturbing.”
The founder spoke to the outlet anonymously due to a confidentiality agreement signed with the grocer.
Another founder named Auria Abraham of Auria’s Malaysian Kitchen says she was approached by the grocer asking her to private label her Lime Leaf Sambal. After unclear financial terms were discussed and calls were sent back and forth, she says the deal fell through.
Then, Trader Joe’s would release its own Thai-style green chili sauce, which was nearly identical to Abraham’s.
“It reminds me of the fast fashion model,” said Jing Gao, the founder of Fly from Jing, to Sichuan brand of crispy chili pepper. “Trader Joe’s is like the food version of Zara or Shein. The way these big houses keep up with so much innovation so quickly is by copying independent designers.”
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Trader Joe’s reportedly approached Gao about replicating the recipes.
Trader Joe’s did not immediately respond Entrepreneur‘s request for comment but said BusinessInsider who does not purchase recipes or product concepts.
“Our common practice is to deal directly with producers or growers rather than purchasing through intermediaries, distributors, sales agents or other intermediaries,” the grocer said. “In our search for new products, we meet with many manufacturers to determine who can best ensure food safety, production capacity, quality and price.”