Not your average Joe: customers who shop at Trader Joe's like to know where their products are from, how they are made and that they are a good bargain. Consumers are more and more interested in natural foods; however, the natural foods category can be confusing. Trader Joe's tells a good story behind the high-quality, wholesome foods it peddles

Prepared Foods, June, 2004 by Wilbert Jones

The company stresses leadership training and a 2collaborative work environment. All employees wear Hawaiian shirts. In the company language, managers are called captains, and employees are called crew.

There are 214 stores nationwide, and the chain is still growing. It has been reported that TJ's plans to open five Chicago-area stores within the next year, as well as new stores in the New York City area. The company does not disclose its sales revenue. However, many business analysts estimate Trader Joe's to be worth about $2 billion annually. The company does not advertise or use coupons. It gets the word out through a quarterly grocery flyer called the Fearless Flyer, sent via mail to neighborhoods surrounding its stores. They also send out emails announcing new product arrivals and recipes to subscribers.

Competition is Coming

Trader Joe's has enjoyed success while maintaining its identity. It has appealed to consumers with its quirky sense of humor and low prices. However, competitors are eager to expand into the organic and natural foods markets.

For example, Cincinnati-based Kroger has disclosed that private label now makes up 31% of its sales, up 0.4% from last year. Wal-Mart (Bentonville, Ark.), the country's largest grocery retailer, has opened a chain of smaller stores, called neighborhood grocery stores. The standalone grocery stores are only 45,000 sq. ft., compared to 200,000-sq.-ft. Wal-Mart Supercenters. Currently, there are 56 neighborhood grocery stores open, but the company plans to open an additional 30 units by the end of 2004. These smaller, scale-down stores contain only fresh produce, canned goods, a dell and a pharmacy.

Wal-Mart has been very successful in winning and keeping customers happy with its private label program. There are 1,475 products under its "Great Value" grocery line, compared to 194 just two years ago. The private label products are not the same as Trader Joe's, but very similar to those offered by large manufacturers such as Kraft Foods (Glenview, Ill.), Del Monte (Coral Gables, Fla.), ConAgra (Omaha, Neb.), Pillsbury (General Mills, Minneapolis) and others.

Some industry experts believe that Wal-Mart wants to come after high-end shoppers. In fact, they already have plans to start competing with the coffee giant Starbuck's (Seattle). Wal-Mart wants to go into the gourmet specialty coffee business, by opening up coffee bars within its stores and offering high-quality retail coffee products to its customers--at bargain prices.

Website Resources:

www.traderjoes.com--Trader Joe's home page

www.plma.com--PLMA's article on private label industry

http://american-taste.bcentralhost.com/US Trends ES03.htm--Interesting info on private labels, ethnic trends and organic foods

http://timesofindia.indiatimes.com/articleshow/msid-294043, Curpg2.cms?--"Private labels come of age," article in The Times of India

www.nfmonline.com/ASP/articleDisplay.asp?strArticleId=973&strSite=NF MSite&Screen=HOME--Article detailing 25 of the natural food industry's pioneers