Trader Joe's Accused of Copying Smaller Brands in New Report: 'Reminds Me of the Fast Fashion Model' Some small businesses are claiming they were duped by the grocer.
By Emily Rella
Opinions expressed by Entrepreneur contributors are their own.
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 own Trader Joe's brand, with some products being an obvious riff on popular name-brand selections.
But a new investigation by Taste found that making Trader Joe's branded items may have a darker side than just reproducing big company favorites — some small brands are claiming that Trader Joe's has copied their ideas and purposely cut them out of deals.
Related: Trader Joe's Increasing Price of Bananas After Two Decades
To offer such cheap prices, Trader Joe's will buy products directly from the supplier and rebrand the product under 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 Sabra's distributor and repackage it.
However, several smaller companies told Taste that Trader Joe's copied their recipes and packaging after reaching out to the 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 uncanny."
The founder spoke to the outlet anonymously due to a non-disclosure it had signed with the grocer.
Another founder named Auria Abraham of Auria's Malaysian Kitchen alleges that she was approached by the grocer about privately labeling her Lime Leaf Sambal. After unclear financial terms were discussed and calls were sent back and forth, she says the deal went dead.
Then, Trader Joe's allegedly released its own Thai-style Green Chili sauce, which was nearly identical to Abraham's.
"It reminds me of the fast fashion model," said Jing Gao, the founder of Fly By Jing, a brand of Sichuan chili crisp. "Trader Joe's is like the food version of Zara or Shein. The way that these big houses keep up with so much innovation so quickly is by copying independent designers."
Related: Trader Joe's Mini Tote Bags Are Fetching Hundreds on eBay
Trader Joe's reportedly approached Gao about replicating the recipes.
Trader Joe's did not immediately respond to Entrepreneur's request for comment but told Business Insider that it does not buy recipes or product concepts.
"Our common practice is to deal directly with producers or growers rather than purchasing through brokers, distributors, sales agents, or other middlemen," the grocer said. "In our search for new products, we meet with many producers to determine who can best deliver on food safety, production capacity, quality, and price."
