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 that are a distinct departure from the popular name brand selections.
But a new one investigation by Taste found that making Trader Joe's branded items may have a darker side than simply reproducing big company favorites — some small brands are claiming that Trader Joe's copied their ideas and intentionally removed them from the agreements.
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To offer such cheap pricesTrader Joe's will buy products directly from the supplier and rebrand the product with its own name – for example, if the company wanted to buy Sabra hummus, instead of selling it to customers in Sabra packaging, the grocer will buy directly from the distributor of Sabra and repack it.
However, some smaller companies said 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 font,” said the founder of an ethnic food brand that was set to work with Trader Joe's. “It was kind of weird.”
The founder spoke to the media anonymously because of a nondisclosure agreement he signed with the grocer.
Another founder named Auria Abraham of Auria's Malaysian Kitchen claims she was approached by the grocer about private labeling her Lime Leaf Sambal. After vague financial terms were discussed and phone calls were made, she says the deal fell through.
Then, Trader Joe's allegedly released its own Thai-style Green Chili sauce, which was nearly identical to Abraham's.
“It reminds me of a fast fashion model,” said Jing Gao, founder of Fly By Jing, a fresh sichuan chili brand. “Trader Joe's is like the grocery version of Zara or Shein. The way these big houses keep innovating so quickly is by copying independent designers.”
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Trader Joe's reportedly approached Gao to replicate the recipes.
Trader Joe's did not immediately respond entrepreneurRequest for comment but told Business Insider that it does not buy recipes or product concepts.
“Our usual practice is to deal directly with manufacturers or growers rather than buying through brokers, 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 offer food safety, production capacity, quality and price.”