by Deborah Orr, Forbes Magazine


Thank you Meg Gabriel for recommending this article. It is a goood introduction to the Trader Joe's gourmet grocery chain set to open its first DC location in the Columbia Hospital building which is being converted to retail and residential use.

Wasabi Peanuts? Ginger Cats Cookies? Chocolate Covered Soy Nuts? Trader Joe's sells oddball fare at terrific prices.

A hundred shoppers crowd into eight checkout lines at Trader Joe's in Tyson's Corner, Va. Their carts are loaded with unusual gourmet items: hand-rolled tamales, marinated racks of Australian lamb, chocolate-covered soybeans. Jon F. Mitchell, a store manager, looks at the crowd and pops the cork out of a $3 bottle of Charles Shaw Beaujolais, Trader Joe's house-label wine. "We have a Beaujolais nouveau here, meant to be drunk young," he calls to shoppers, pouring it into Dixie cups. The bottle is quickly emptied. Mitchell opens three more.

The always-festive atmosphere at Trader Joe's 253 stores, loved by frugal foodies for their high-quality, dirt-cheap concoctions, seems even more exuberant these days. The Monrovia, Calif. company is starting to venture beyond the out-of-the-way suburban strip malls its devoted fans have flocked to--some driving for hours--for 39 years. Expanding into high-rent neighborhoods, Trader Joe's opened its first Manhattan store in March, one of 33 new outlets since year-end 2004.

Trader Joe's devoted customers like the food, the prices and the sense of humor. Plastic lobsters are suspended in fishnets by the seafood section and staffers wear Hawaiian shirts and tags that read "Captain" and "First Mate." Hand-lettered signs include lots of exclamation points--as in "$1 less than last year!" and "Organic!"--and invite customers to sample new offerings. Adding to the allure, the product choices, although limited (2,000 items, against 45,000 in a large Safeway), are not entirely predictable. With as many as 10 to 15 new items every week a store becomes the scene of a treasure hunt. Where else are you going to find Soy & Flax Cereal clusters ($3.49), Ginger Cats Cookies ($2.29) and Jalapeño Blue Cornbread Mix ($2.29)?

"When you look at food retailers, there is the low end, the big middle and then there is the cool edge--that's Trader Joe's," says Richard George, professor of food marketing at St. Joseph's University in Philadelphia. The word of mouth is such that the advertising budget can be small, at 0.2% of sales, against 4% for a supermarket. "You really have to try this granola," one customer says to another at a store in Westwood, N.J., holding up a bag of Trader Joe's Ginger Granola. "You can't get it anywhere else."

 Trader Joe's carries mostly goods with its own labels. There's "Trader Giotto's" for Italian items, "Trader Ming's" for Chinese. Product ingredients and serving suggestions are detailed, in the style of clothing retailer J. Peterman, in stores and in the food company's newsprint circular. ("Dude, we have some totally outrageous holiday cookies .… These all-butter cookies have no trans fats. Radical.") Some of the items are knockoffs of national brands. Joe's O's look like Cheerios but cost half as much.


The chain posted sales of $4.5 billion last year, estimates trade journal Supermarket News, closing in on Whole Foods, with sales of $4.7 billion from more-expensive items. Trader Joe's stores are small, averaging 12,500 square feet (the 15,000-foot store in Manhattan is an outlier). Thus does the company haul in annual revenue of $1,440 per square foot. WholeFoods does only $783, the average supermarket $60

Trader Joe's is owned by one of Europe's richest merchant families, the Albrechts, who have made their $32.2 billion fortune selling private-label goods. They keep their business affairs private, too. No member of the family has been interviewed since Theo Albrecht, the cofounder of Germany's Aldi Group, was kidnapped and released on a $3 million ransom in 1971. Trader Joe's management has been just as hush-hush since the family bought the chain in 1978


Trader Joe's fiercely guarded sources are mostly small-time foodmakers, although some larger companies, including Ian's Natural Foods, do some manufacturing. Rather like Pier 1 Imports, Trader Joe's sends scouts around the world to find finished goods other retailers aren't selling or to find ingredients for its own recipes. Trader Joe's President Doug Rauch who, like other executives at Trader Joe's, declines to be interviewed, recently told attendees at a food-marketing conference that it started creating its own products so "we could put our destiny in our own hands."

Trader Joe's was created by Joe Coulombe, who bought three Los Angeles convenience stores in 1958. Instead of competing with 7-Eleven, Coulombe decided while vacationing in the Caribbean to adopt a tropical theme and focus on building no-frills stores with hard-to-find gourmet products at impossibly low prices, says Len Lewis, author of The Trader Joe's Adventure (Dearborn, 2005). Coulombe's reasoning: Consumers are more willing to try new things on vacation.

The future for Trader Joe's looks a bit more complicated. The company, which only added scanners to its checkout lines five years ago--management considered them too impersonal--may have a hard time maintaining its folksy appeal as it grows. Already it is having a harder time managing its suppliers. Not long ago Trader Joe's cut its ties with Bingham Hill Cheese of Fort Collins, Colo. when the cheesemaker couldn't keep up with an explosion in orders from the food retailer. (Bingham Hill went out of business in February.) Trader Joe's had to recall some frozen-chicken entrées last October, after listeria bacteria were found at one of its suppliers' plants. In December it yanked an Italian white wine from stores nationwide after the Dayton Daily News in Ohio posted a critique of its inconsistent quality.

Big-time rivals are taking aim. Whole Foods Chief Executive John Mackey says his firm created its "365" private-label bargain brand to go up against Trader Joe's. Costco, the warehouse-style discount retailer, has added a line of Cameron Hughes wines, nicknamed "Ten-Clam Cam," like "Two-Buck Chuck," which is what Trader Joe's shoppers call its Charles Shaw label.

 Still, the fact that Trader Joe's has gotten as big as it has without attracting much head-on competition shows how hard it is to imitate a quirky formula with a cult following.

Hula Swordfish Express
erves 2

2 Trader Joe's Swordfish Steaks, in our freezer case
1/2 cup Trader Ming's Soyaki
1 cup Trader Joe's All Natural 100% Hawaiian Pineapple Chunks, drained
Trader Joe's Extra Virgin Italian Olive Oil Spray

Spray an ovenproof pan with oil. Place defrosted fish in the pan and pour 1/4 cup of Soyaki over fish, turn fish and repeat. Broil the fish for 7 minutes and then turn them over, top with pineapple and return to the oven for another 7 minutes or until done (when fork inserted, fish flakes).

The hook to defrosting frozen fish:

Best bet - thaw from frozen in package in the refrigerator for 24 hours.
2nd best - in packaging in a bowl of water in fridge for 1-2 hours.
Quick thaw - under cold running water.
Cheater thaw - remove packaging and microwave on defrost until thawed.
Never thaw seafood at room temperature and marinate only in the refrigerator ­ discard marinade after use.

Excerpts from Forbes Magazine 4/10/06 and