Hip, floral-shirted employees in their 20s and 30s dot the aisles at your average Trader Joe’s supermarket. They mill about, making small talk with shoppers, stocking the narrow shelves, and explaining where to find the quinoa and black bean-infused tortilla chips. The whole atmosphere is fun, but in a larger sense, built around a model of organic, low-cost food that people can feel morally comfortable eating, despite revealing almost nothing to them about where the food comes from.
If you’re a TJ’s supplier, you enjoy a binding agreement that states you won’t disclose your relationship with the Monrovia, Calif.-based grocer. TJ’s doesn’t charge stocking fees, it pays on time, and it doesn’t deal with couponing or advertising fees. These food sourcing secrets allow for TJ’s signature markdowns, but they come with the added cost of opacity. Trader Joe’s does not reveal its food sources, and in many cases, casts doubt on whether its claims of using non-GMO (genetically modified organism) ingredients are actually valid.
Trusting A Business’s Claims
Trader Joe’s released a statement in December 2012 addressing the controversy of using GMO ingredients in the store’s products.
“Our approach to Genetically Modified Organisms is simple: we do not allow GMO ingredients in our private label products (anything with Trader Joe's, Trader Jose's, Trader Ming's, etc. on the label),” it read.
The statement elaborated that Trader Joe’s, which is owned by Germany’s Albrecht family under the parent company, Aldi, relies on suppliers to perform “the necessary research to provide documentation that the suspect ingredients are from non-GMO sources.” The findings of this research are published in affidavits — written testimonials explaining how the food came from non-GMO sources. The problem is, no one can see these affidavits.
Vani Hari runs the food blog Food Babe and has written extensively on a number of companies’ food sourcing practices. Her most recent investigation delved into the secret world of Trader Joe’s, which, she says, “makes [her] head want to explode.”
“I asked Trader Joe’s if they would send me an affidavit showing proof of non-GMO corn or soy in at least one of their products that wasn’t labeled certified organic and they refused saying, ‘Unfortunately we don’t share those documents, they are confidential,’” she wrote in the post, entitled "What Is Trader Joe’s Hiding?"
“They wouldn’t even tell me what country some of the products were produced in either as they do not provide ‘country of origin’ labeling.”
Hari requested affidavits from Coca-Cola for its line of Honest Teas and from Heineken for its beer. Both complied.
Companies that wish to have their supposed non-GMO products verified by a third party must turn to the Non-GMO Project, currently “North America’s only third party verification and labeling for non-GMO food and products,” according to its website. Organic foods can be evaluated by the U.S. Department of Agriculture (USDA), which requires a high level of standards and testing before deeming a product GMO-free.
Trader Joe’s products, however, “don’t allow for auditing using the Non-GMO Project because there is an additional cost associated with that,” Hari reported.
The Cost Of Learning The Source
Research into Trader Joe’s business supply chain has revealed a startling level of commitment to keeping suppliers protected. If revealed, some speculate that the information could shatter TJ’s reputation as a locally produced, small-scale grocer — despite its $8 billion annual sales.
Many consumers would probably be surprised to learn Trader Joe’s pita chips are made by Stacy’s, a PepsiCo product under the brand Frito-Lay. Or that much of TJ’s east coast supply of yogurt actually comes from Stonyfield Farms.
The sheer cost-benefit of keeping these brands hidden is that Stacy’s and Stonyfield Farms, and other such brands, can continue charging higher prices at other grocery stores without having to change their product. Tasty Bite Punjab Eggplant, for instance, which sold in a Manhattan Whole Foods for $3.39, retailed for more than $1 cheaper at a Trader Joe’s in Stamford, Conn.
On the health side, however, keeping food sourcing a secret means people don’t know — and can’t know — if the food they’re eating has, say, GMOs or not. They’re forced to trust a company that reveals to them next to nothing.
In all other aspects, one could argue, Trader Joe’s excels. It pays its employees well, offers them substantial benefits packages, and creates a shopping experience that makes customers feel socially conscious and cool. But as a grocer — ostensibly its foremost role — its supplier secrecy often delegitimizes the brand.
“I have a hard time trusting a company that is not willing to show their affidavits to a customer or prove that their products are in fact GMO free,” Hari’s post reads. “Trader’s Joe’s won’t spend any of their 8 billion dollars in sales to test and prove their products safe. And they won’t tell us what companies they work with to develop their products or what countries their ingredients come from.”
She goes on to question the seeming ubiquitous usage of “DIST & SOLD EXCLUSIVELY BY: TRADER JOE’S MONROVIA, CA 91016″ written on the back of each TJ’s product. How could a business that keeps $4,000 in SKUs (Stock-Keeping Units), compared to a normal grocery store’s $50,000 SKUs, reliably ship all of its food from California?
“I hope we are smart enough to know the entire line of Trader Joe’s products aren’t all really from California,” Hari noted. “This means you could be eating nutritionally degraded produce.”
“I have been a victim to this more than once,” Hari continued, “when I bought produce that I didn’t know was less than stellar and it went bad super fast in my fridge compared to the local produce I get from my farmer or buy from other grocery stores.”
Unfortunately, social consciousness comes with trade-offs. Even Hari, for all her diligence, acknowledges Trader Joe’s has unbeatable prices. Cash-strapped college students and senior citizens on fixed incomes have less wiggle room than other segments of the population.
It’s for this reason that Costco co-founder and CEO Jim Sinegal called Trader Joe’s “very good retailers” and that Costco “admires them a lot.” Even more telling is that Sinegal statements still make sense alongside Kevin Kelley’s, whose consulting firm Shook Kelley performed research on Trader Joe’s for its competitors.
The typical shopper at Trader Joe’s is the "Volvo-driving professor who could be CEO of a Fortune 100 company,” Kelley told CNN Money, “if he could get over his capitalist angst."