Business

A story about Trader Joe’s and Joe Coulombe, the man behind the brand




Joe Coulombe, a struggling convenience store owner in Los Angeles, decided in 1967 to open a grocery chain to appeal to the small but growing number of well-educated, well-traveled consumers that regular supermarkets ignored.

“I have an ideal audience in mind,” he told the Los Angeles Times in 1981. “This is a person who received a Fulbright scholarship, went to Europe for a couple of years and developed a taste for something other than Velveeta ‘regular beer. and Folger’s coffee, he said.

Coulombe acknowledged that international travel was about to explode thanks to the new Boeing 747 that came on the market. For the name of his new store, Coulombe landed on Trader Joe̵[ads1]7;s to evoke exotic images of the South Seas. The name was inspired by Trader Vic’s, a popular Tiki Bar restaurant started in California.

One marketing expert thought it was a terrible name – “Trader” was “something associated with selling defective horsemeat,” Coulombe said in his memoir, “Becoming Trader Joe,” published in 2021, a year after he died at the age of 89.

But it stayed put, and the first Trader Joe’s opened in Pasadena, California, in 1967. The location was ideal for his new target customer, surrounded by colleges, a hospital and large engineering firms.

“He was a grocery outsider who was able to see things differently,” said Benjamin Lorr, author of “The Secret Life of Groceries: The Dark Miracle of the American Supermarket.” “He wanted to take advantage of this idea that food was exploration, that food was travel and adventure.”

Nautical theme

The first Trader Joe’s store had a nautical theme with marine artifacts including a ship’s bell, fishing nets and half of a rowboat. The check-out counter was an island with a roof. Employees wore Polynesian shirts and Bermuda shorts. The leader was called captain and the assistant was helmsman. And slimming Hawaiian music played over the speakers.

But the items did not look like what you find at a Trader Joe’s today.

The original store had a typical convenience store selection of groceries, along with discounted magazines, books, socks and stockings, plates and photo processing. The big draw, however, was the alcohol selection.

The original Trader Joe's in Pasadena, California.  It opened in 1967.

California had Fair Trade laws on alcohol, so manufacturers set minimum prices and it was illegal to go under them. Since Coulombe could not compete by offering low prices, he realized that he had to offer a wide variety to stand out.

The first Trader Joe’s boasted of having the world’s largest selection of alcohol – 100 brands of Scotch, 50 brands of bourbon and gin and 14 types of tequila.

Coulombe eventually found a loophole in California’s Fair Trade laws that allowed his store to import high-quality French wine and sell it at lower prices than its competitors, which helped him reach wine connoisseurs. (It would not be until years later that Trader Joe’s released its famous $ 1.99 Charles Shaw wine, known as “Two-Buck Chuck.”)

Helsemani

In the early 1970s, Coulombe took hold of the growing health food movement, believing it would appeal to the same type of customers who also happened to be wine connoisseurs.

“His ideas for marketing groceries came from his marketing of wine,” said Benjamin Lorr.

Trader Joe’s first private label product was granola, and then it began adding freshly squeezed orange juice, vitamins, nuts and dried foods and cheese. At one time, Trader Joe’s was the largest American importer of brie.

Coulombe was immersed in the health food culture of Berkeley and San Francisco.

“I hired a young hippie woman from the University of California, Santa Cruz to teach us the language,” he said.

Brandenburg Brownies and Sir Issac Newtons

In 1977, Coulombe recreated Trader Joe’s again – and put it on a path that would be better known to today’s customers.

In response to the end of Fair Trade alcohol laws in California and other price controls, Trader Joe needed new ways to increase profits and remain competitive. It eliminated most of the basic household items and cleaning equipment and focused on food. It also cut the number of goods it brought with it and went on to largely sell goods with private labels.

“When we developed Trader Joe’s, its biggest deviation from the norm was not the size or the decor,” Coulombe said. “It was our commitment to product knowledge, which was completely foreign to the mass buyer culture, and that we turned our backs on brands.”

The company even positioned its private label names and branding to connect with well-educated shoppers – Brandenburg Brownies and Sir Issac Newtons, for example – said Coulombe.

Creating strong private label offerings for competing national brands would be one of his legacies in the supermarket industry, Lorr said. “It changed the balance of the grocery industry. Suddenly, merchants are empowered in a way they were not.”

But Coulombe resisted opening dozens of new stores.

Trader Joe's has more than 500 stores across the United States today.

The handful of stores Coulombe opened were in Southern California, which suited the demographic profile he was looking for – teachers, musicians, journalists and other professionals.

In 1979, Coulombe Trader sold Joe’s to the family of Theo Albrecht, then the owner of the Aldi grocery chain in Europe. (Aldi in the United States is owned separately by the family of Theo Albrecht’s brother Karl.)

Aldi executives traveled from Germany to visit Trader Joe’s about once a year, but took a hands-off approach to monitoring the growing chain.

When Coulombe resigned as CEO in 1988, Trader Joe’s had 27 stores in California and an estimated $ 150 million in sales.

It would be his successor as CEO, John Shields, a former Stanford fraternity brother, who brought Trader Joe’s out of California and turned it into a national chain. In 1996, Trader Joe’s opened its first two stores on the East Coast, both in the suburbs of Boston.
By 2020, Trader Joe’s had more than 530 stores and an estimated $ 16.5 billion in sales, according to the latest data available from Supermarket News.

“My followers at Trader Joe’s have taken a 30-store chain across the country with remarkable adherence to the basic concepts we started with,” Coulombe said in 2010.



Source link

Back to top button