Dive Brief:

• An investigation by food site Eater revealed that name brands like Naked, Stacy’s and Stauffers are behind many of Trader Joe’s private label products, according to a report. The site collected data from product recalls at Trader Joe’s and cross referenced it with data from other brands. Eater also examined ingredients lists to reach its conclusions.
• Most of Trader Joe's private label products, Eater points out, are made by small manufacturers under exclusive contract with the retailer. Trader Joe’s, like other retailers, also works with name brands, which often make subtle changes to their formulations at retailers' requests.
• Eater's writers wonder if shoppers would still buy Trader Joe's products if they knew many big-name brands were behind them. The site notes that this reliance on big brands goes against the unique image that the retailer takes pains to project.

Dive Insight:

This isn't the first investigation to try and uncover the companies behind Trader Joe’s products, but it is perhaps the most thorough. Using recall data obtained through a Freedom of Information Act request, Eater found the name brands behind many of Trader Joe’s beloved private-label products.

To most people in the industry, this is hardly a surprise. Retailers often rely on well-known manufacturers to supply their private label lines. As Eater notes, Walmart’s Great Value brand is made by companies like Sara Lee and Bimbo. Partnerships like these give grocers quality products and good supply chain capabilities, and allow manufacturers to build positive relationships with retailers. Particularly with center store sales declining, private label manufacturing remains one way CPG companies can build their shelf presence.

Most consumers, however, aren't aware of these relationships. In Trader Joe’s case, the involvement of so many mainstream brands seems to go against the one-of-a-kind appeal that the company promotes, which draws so many people to its stores. If Trader Joe's is selling the same products that Kroger and Walmart offer, why even shop there?

It's important to point out Trader Joe's is often demanding subtle changes to many of these products made by well known suppliers, so they're often not the same products consumers could find elsewhere. Also, despite these connections to mainstream brands, most of Trader Joe's private brands are made through exclusive relationships with manufacturers, which seems to be in keeping with the image most people have of the retailer and how it operates.

Moreover, even with its reliance on mainstream brands, Trader Joe’s is still curating its selection for customers. Although the company's unique products and its healthful standards are a draw, the main reason people shop there is because the products taste good. If products meet that standard, it's hard to imagine shoppers caring where they came from.

The biggest takeaway for industry here might be the power of branding. Trader Joe’s excels at promoting taste exploration with its customers. It does this with the products it sources, but also with aspects like product names, package design and typography. Although its sourcing may not completely live up to customer standards, it has won over legions of shoppers with its quirky yet seriously meticulous brand identity. It will be interesting to see how consumers react to this news, but seems unlikely that word of these product partnerships will tarnish Trader Joe's beloved brand.