Joe Coulombe, owner of a struggling convenience store in Los Angeles, decided in 1967 to open a chain of grocery stores to appeal to the small but growing number of well-educated and well-traveled consumers that traditional supermarkets were ignoring.
Coulombe acknowledged that international travel was about to explode with the arrival of the new Boeing 747 on the market. For the name of its new boutique, Coulombe landed on Trader Joe’s to conjure up exotic images of the South Seas. The name was inspired by Trader Vic’s, a popular Tiki Bar restaurant established in California.
But it stuck, and the first Trader Joe’s opened in Pasadena, California in 1967. The location was ideal for its new target clientele, surrounded by college campuses, a hospital, and major engineering firms.
Nautical theme
The first Trader Joe’s store had a nautical theme with marine artifacts including a ship’s bell, fishing net and half a rowboat. The exit counter was an island with a roof. Employees wore Polynesian shirts and Bermuda shorts. The director was called captain and the assistant was second. And singsong Hawaiian music played on the speakers.
But the merchandise was nothing like what you would find at a Trader Joe’s today.
The original store offered a typical assortment of groceries, as well as discounted magazines, books, socks and stockings, records and photos. The big draw, however, was the liquor selection.
California had fair trade liquor laws, so manufacturers set minimum prices and it was illegal to go below that. Since Coulombe could not compete by offering low prices, he recognized that he had to offer a wide variety to stand out.
The first Trader Joe’s boasted the largest assortment of liquor in the world – 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 shop to import high-end French wine and sell it at lower prices than his competitors, helping him reach connoisseurs. of wine. (It wasn’t until years later that Trader Joe’s released its famous $1.99 Charles Shaw wine, known as “Two-Buck Chuck”.)
health craze
In the early 1970s, Coulombe seized on the growing health food movement, believing it would attract the same kind 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, then he started adding freshly squeezed orange juice, vitamins, nuts, dried foods and cheese. At one time, Trader Joe’s was the largest American importer of brie.
Coulombe immersed himself in health food culture in Berkeley and San Francisco.
“I hired a young hippie woman from the University of California, Santa Cruz to teach us the lingo,” he said.
Brandenburg brownies and Sir Issac Newtons
In 1977 Coulombe remade Trader Joe’s again – setting it on a path that would be more familiar to customers today.
“As we evolved Trader Joe’s, its biggest departure from the norm wasn’t its size or decor,” Coulombe said. “It was our dedication to product knowledge, something that was completely alien to the retail culture, and the fact that we turned our backs on branded products.”
The company has even positioned its private labels and brand image to connect with well-educated shoppers — Brandenburg Brownies and Sir Issac Newtons, for example — Coulombe said.
Creating strong private label offerings to compete with national brands would be one of his legacies in the supermarket industry, Lorr said. “It changed the balance of the grocery industry. Suddenly grocers are empowered in ways they weren’t.”
But Coulombe resisted opening dozens of new stores.
The handful of stores Coulombe opened were in Southern California, which matched the demographic he was looking for – teachers, musicians, journalists and other professionals.
Aldi executives used to travel from Germany to visit Trader Joe’s about once a year, but they took a hands-off approach to overseeing the growing chain.
By the time Coulombe left his position as general manager in 1988, Trader Joe’s had 27 stores in California and an estimated revenue of $150 million.
“My successors at Trader Joe’s have taken a chain of 30 stores nationwide with remarkable adherence to the core concepts we started with,” Coulombe said in 2010.
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