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The Natural Food Channel: Trader Joe's Profile

The Natural Food Channel: Trader Joe's Profile

Popular for its quirky personality and unique products, Trader Joe’s Co. is an $11.3 billion, retail chain of more than 400 small-footprint stores that likewise appeal to both natural food shoppers and gourmets. Trader Joe’s has gained massive fandom for being unlike conventional supermarkets. Due to their limited amount of stores, Trader Joe’s is a destination: a place consumers seek out to purchase their natural and organic foods. The chain’s strengths mirror its competitor Whole Foods, as both works to capitalize on growing consumer interest in natural and organic products. In many ways, Trader Joe’s and Whole Foods also have very similar – and in many cases the same – customers. Yet, the striking differences between the two stores are what keep the customers going to both stores. Trader Joe’s focus is a sharply edited assortment of great products at a reasonable price; while Whole Food’s focus is premium quality with a huge selection.

In The Natural Food Channel: Trader Joe's Profile the historical growth and expansion strategies of Trader Joe’s are analyzed. Also examined is their mission/position, store location and design, product standards and programs, use of private label, pricing, advertising and use of social media, organizational structure, ethical and environmental initiatives, consumer demographics and psychographics, and more.

Chapters in this report also examine the wave of up-and-coming competitors in the natural foods industry. In the past two years, several growth-oriented specialty food retailers and natural food chains—including Sprouts Farmers Market, The Fresh Market, Fairway Market, and Natural Grocers by Vitamin Cottage—joined the industry with initial public offerings (IPOs). Additionally, Natural Markets Food Group, which owns the Mrs. Green’s Natural Market chain, is said to be considering an IPO as well. Then there is startup company Fresh Thyme Farmers Market, backed by Midwest-based supercenter retailer Meijer Co. It also is strongly rumored that billionaire investor Ron Burkle’s private equity firm Yucaipa Cos. plans to revive the Wild Oats Market name, converting the Fresh & Easy stores it acquired from Tesco Plc in November 2013 into Wild Oats natural foods markets. And supermarket Kroger Co., which maintains more than 2,400 stores across the country under regional banners including Kroger, Ralph’s, and Fry’s, is also making a play for the natural and organic food space and considers itself the second-largest player in this market after Whole Foods.

Scope and Methodology

The sources for The Natural Food Channel: Trader Joe’s Profile include both primary and secondary research data. The primary data includes research gathered through interviews with retailers and other members of the natural and healthy food industry, and on-site examinations of retail stores. Secondary research involved the evaluation and comparison of data from articles found in financial, marketing, and industry publications, as well as on corresponding websites and in consumer social media. Other sources for secondary data include annual reports, 10-Ks, transcripts of earnings calls, and literature from individual companies. Consumer data are derived from Simmons National Consumer Surveys for Summer 2013, from Experian Marketing Services.

Each chapter contains tables, charts, graphs, and illustrations that reinforce content and make the points in the text easier to understand.

The Natural Food Channel: Whole Foods Profile (February 2014) is also available from Packaged Facts as a companion report. Chapters 3 and 4 in these reports contain parallel content. If you purchase The Natural Food Channel: Trader Joe’s Profile, receive a $750 discount on our Whole Foods report.


Market Insights: A Selection From The Report

Trader Joe’s has not experienced any significant direct competition because it occupies a unique niche in the marketplace. No one else has the same assortment of merchandise because about 80% of Trader Joe’s inventory is composed of private label items. Although individual items may be identical to products at other grocers, for the most part, Trader Joe’s differentiates its products a fresh twist, such as an all-natural formulation or a new flavor no one else has thought of. Trader Joe’s is also unparalleled because it embraces a combination of gourmet, natural/organic, and ethnic/multicultural foods rather than focusing on just one of these sectors—and it does so at far lower prices than upscale specialty grocers and most natural foods stores. Moreover, the chain’s incomparable atmosphere makes it a fun destination rather than a tedious shopping trip.

Press Release

Whole Foods and Trader Joe's Cultivate Image as Must-Visit Health Food Destinations

Unlike conventional supermarkets, Whole Foods Market and Trader Joe's are destinations: places consumers seek out and travel to over long distances. The two chains' retail strengths echo similar market strategies as they seek to capitalize on growing consumer interest in natural and organic products, according to The Natural Food Channel: Whole Foods Profile and The Natural Food Channel: Trader Joe's Profile, companion Packaged Facts reports focused on retailing in the natural and organic food and beverage market segment.

In many ways, Whole Foods and Trader Joe's have very similar--and actually often the same--customers. Many consumers shop at both Whole Foods Market and Trader Joe's, or would, if both stores were in the same trading area, notes Packaged Facts research director David Sprinkle. The report reveals that consumers who are likely to shop at both chains have a higher than average education; are more conscious of labels, ingredients, nutrition, and eating healthfully than the average consumer; are more interested in natural/organic products (and not just food); are more interested in gourmet foods, foreign foods, and the way food is presented; and are more concerned about environmental issues.

Yet, for all the similarities, it's the striking differences between the two chains that keep the same consumers shopping at both.

Whole Foods is America's first national "Certified Organic" grocer and is the leading retailer of natural and organic foods with $13 billion in fiscal 2013 sales. Whole Foods focuses on premium quality and huge selection. Though also offering value-priced items, the chain presents an image of luxury, with case stacks of expensive olive oil as common as displays of its value-focused Everyday 365 store brand.

Meanwhile, Trader Joe's focus is renowned for its quirky personality and unique products. The chain is a sharply edited assortment of great products at great prices. It has much smaller selections and not quite as much variety to offer when it comes to fresh produce, meats, seafood, and prepared foods.

There is also a vast difference in the chains' marketing thrusts. Whole Foods' marketing intent is to promote sustainability, responsible sourcing, and the concept that by buying products at its stores, consumers are supporting not just organic foods, but a production model that benefits local farmers, people in third-world countries, and the environment. In contrast, the marketing thrust of Trader Joe's, with its whimsical atmosphere and newsletters, is that it is here to make shopping fun but it also just so happens to have these great products that it searched the world to find just for its customers, at prices that are a steal.

For more information on The Natural Food Channel: Whole Foods Profile, please visit: http://www.packagedfacts.com/redirect.asp?progid=86121&productid=8032064. For a look at The Natural Food Channel: Trader Joe's Profile visit: http://www.packagedfacts.com/redirect.asp?progid=86120&productid=8031891.

About Packaged Facts -- Packaged Facts, a division of MarketResearch.com, publishes market intelligence on a wide range of consumer market topics, including consumer demographics and shopper insights, consumer financial products and services, consumer goods and retailing, consumer packaged goods, and pet products and services. Packaged Facts also offers a full range of custom research services. To learn more, visit: www.packagedfacts.com. Follow us on Facebook, LinkedIn, Twitter, and Google+.

Chapter 1: Executive Summary
Capsule Profile
Competition from Other Retailers
Savvy Group of Consumers
Trader Joe’s and Whole Foods Market
Table 1-1: Trader Joe’s vs. Whole Foods Market, 2013
Upsurge of Competition in Natural Foods
Table 1-2: Selected Fresh and Natural Foods Competitors, 2013
13% of Adults Shop at Trader Joe’s
Figure 1-1: Share of U.S. Adults Who Shop in Trader Joe’s, Whole Foods, and Natural Food Channel, 2014 (percent)
Figure 1-2: Share of U.S. Population Shopping at Trader Joe’s or Whole Foods, 2013 (percent)
Percentage of Trader Joe’s and Whole Foods Shoppers on the Ups
Table 1-3: Trends in Retail Shopping, 2004-2013 (percent of U.S. adults)
High Socioeconomic Status Characterizes Trader Joe’s and Whole
Foods Market Shoppers
AttitudesToward Food
Shopping Attitudes and Behaviors
Attitudes and Behaviors Toward Environmental Concerns
Trader Joe’s Shoppers Healthier, More Willing to Grocery Shop Using
Technology
Organic and Whole Grains Among Labels Most Sought Out by Trader Joe’s Shoppers
Figure 1-3: Characteristics Sought Out by Consumers When Food Shopping,2014 (percent)
Chapter 2: Trader Joe’s
Capsule Profile
Table 2-1a: Growth of Trader Joe’s, 2008-2014, estimate A
Table 2-1b: Growth of Trader Joe’s, 2008-2012, estimate B
Founding and Expansion
Illustration 2-1: Trader Joe’s First Store in Pasadena, CA, 1967
Illustration 2-2: The Original Pasadena Store is Still Open at the Same Location
Potential for Online Sales
Trader Joe’s and ALDI
Illustration 2-3: ALDI Private Label Brands
All Growth Is Self-Financed
Reputation for Reticence—or Secrecy
Mission/Position
Stores
Illustration 2-4: Trader Joe’s Store in Saugus, MA, November 2012
Décor and Store Layout
Illustration 2-5: Frozen Food Aisle in Trader Joe’s Store in Las Vegas, November 2013
Illustration 2-6: Produce Section in Trader Joe’s Las Vegas, November 2013
Carefully Curated Product Mix
Illustration 2-7: Extensive Cheese Selection in Trader Joe’s Las Vegas,November 2013
Product Standards and Programs
Illustration 2-8: Trader Joe’s Dietary Icons and Product Lists
Illustration 2-9: TJ’s Recipes, December 2013
Illustration 2-10: Trader Joe’s Guides
Trader Joe’s Is Built Around Private Label
Cheese
Illustration 2-11: Trader Joe’s Creamy Toscano Cheese Soaked in Syrah
Illustration 2-12: Trader Joe’s New Zealand Grass Fed Sharp Cheddar
Frozen Foods
Illustration 2-13: Trader Joe’s Aloo Chaat Kati Pouches
Illustration 2-14: Trader Joe’s Edamame Rangoons
Grocery
Illustration 2-15: Trader Joe’s Fig Butter
Produce
Illustration 2-16: Trader Joe’s Healthy 8 Chopped Veggie Mix
Illustration 2-17: Trader Joe’s Kale & Edamame Bistro Salad
Refrigerated Foods
Illustration 2-18: Trader José’s Carne Asada Autentica
Illustration 2-19: Trader Joe’s Sushi Rolls
Snacks and Sweets
Illustration 2-20: Trader Joe’s Beurre Meuniere Popcorn
Illustration 2-21: Trader Joe’s Gluten Free Joe-Joe’s
Illustration 2-22: Trader Joe’s Mini Panettone
Illustration 2-23: Trader Joe’s PB&J Milk Chocolate Bar
Illustration 2-24: Trader Joe’s Pumpkin Macarons
Wines & Beers
Illustration 2-25: Trader Joe’s Vintage Ale
Most Popular Products in 2013
Illustration 2-26: Trader Joe’s 2013 Top 25 Customer Favorite Products
Illustration 2-27: Trader Joe’s Triple Ginger Snaps, No. 1 in 2013
Illustration 2-28: Trader Joe’s Pumpkin Spice Coffee
Illustration 2-29: Trader Joe’s Pesto Gouda
Illustration 2-30: Trader Joe’s Mandarin Orange Chicken
Illustration 2-31: Spinach & Kale Greek Yogurt Dip
The Cookie Butter that Conquered the World
Illustration 2-32: Trader Joe’s Speculoos Cookie Butter
Two Buck Chuck
Illustration 2-33: Display of Charles Shaw Wines in Trader Joe’s Austin, TX
Trader Joe’s Pricing
Fun Atmosphere Part of its Strength
Organizational Structure
Illustration 2-34: Trader Joe’s Employees
Purchasing Structure
Company Spirit and Teamwork
Trader Joe’s Cutting Healthcare Benefits
Ethical and Environmental Positions
Advertising and Marketing
Illustration 2-35: Cartoon from Trader Joe’s Fearless Flyer
Illustration 2-36: Trader Joe’s Fearless Flyer, 2013 Holiday Edition
Illustration 2-37: Fearless Flyer Online Ad for Scallops Wrapped in Bacon
No Social Media
Illustration 2-38: Whimsical Banner on Trader Joe’s Website
Community Involvement
Criticism and Controversies
Trader Joe’s Sues Pirate Joes, Unsuccessfully
Activists Target Trader Joe’s for Allowing Antibiotics in Meat
Lawsuit Filed over Trader Joe’s Peanut Butter Pretzels
Chapter 3: Retail Competition
Competition from Other Retailers
Savvy Group of Consumers
Trader Joe’s Fans Are Strong Advocates
Trader Joe’s and Whole Foods
Table 3-1: Trader Joe’s vs. Whole Foods Market, 2013
Upsurge of Competition in Natural Foods
Table 3-2: Selected Fresh and Natural Foods Competitors, 2013
Sprouts Farmers Market Positions as Less Expensive
Illustration 3-1: Exterior of Sprouts Farmers Market in Redondo Beach, CA
Illustration 3-2: Interior of a Sprouts Farmers Market
Natural Grocers by Vitamin Cottage Planning Major Expansion
Illustration 3-3: Cover of Prospectus for Natural Grocers by Vitamin Cottage
Illustration 3-4: Natural Grocers Storefront
The Fresh Market Tries Expanding from Regional to National
Illustration 3-5: The Fresh Market, Rendering of Interior
Fairway Market
Illustration 3-6: Interior of Fairway Market in Nanuet, NY
Fresh Thyme Farmers Market Just Starting Up
Illustration 3-7: Fresh Thyme Farmers Market, Rendering of Exterior
Illustration 3-8: Fresh Thyme Farmers Market, Rendering of Interior
Will Wild Oats Return?
Illustration 3-9: An Old Wild Oats Store
The Fresh & Easy Fiasco
Mrs. Green’s Natural Markets
Illustration 3-10: Mrs. Green’s Natural Market
Kroger Targeting Natural and Organic Foods
Illustration 3-11: A Kroger Marketplace Store
Chapter 4: The Natural Food Store Shopper
About the Consumer Survey Data
13% of Adults Shop at Trader Joe’s
Figure 4-1: Share of U.S. Adults Who Shop in Trader Joe’s, Whole Foods, and Independent Natural Food Channel, 2014 (percent)
Figure 4-2: Share of U.S. Population Shopping at Trader Joe’s or Whole Foods, 2013 (percent)
Percentage of WF/TJ Shoppers on the Ups
Table 4-1: Trends in Retail Shopping, 2004-2013 (percent of U.S. adults)
High Socioeconomic Status Characterizes Trader Joe’s and
Whole Foods Shoppers
Least Likely Shoppers Have Low Education and Income
Table 4-2: Selected High-Index Demographics of Trader Joe’s vs. Whole Foods Shoppers, 2013 (index)
Table 4-3: Demographic Overview of Trader Joe’s Shoppers, 2013 (percent, number and index of U.S. adults)
Table 4-4: Demographic Overview of Whole Foods Market Shoppers, 2013 (percent, number and index of U.S. adults)
Attitudes Toward Food
Table 4-5: Consumer Attitudes/Opinions Toward Food: All Consumers vs. Any Supermarket/Supercenter, Trader Joe’s, and Whole Foods Shoppers, 2013 (percent and index of U.S. adults)
Trader Joe’s Shoppers Both Healthier and More Willing to Grocery Shop Using Technology
Table 4-6: Consumer Attitudes/Opinions Toward Food: All Consumers vs. Trader Joe’s, Whole Foods Market, and Independent Natural
Food Store Shoppers, 2014 (percent)
Organic, Whole Grains Among Tags Sought Out by Trader Joe’s Shoppers
Figure 4-3: Characteristics Sought Out by Consumers When Food Shopping, 2014 (percent)
48% of Trader Joe’s Shoppers Spend $100 or More Per Week on Groceries
Figure 4-4: About How Much Do You Spend Weekly On Grocery Shopping?, 2014 (percent)
Shopping Attitudes and Behaviors
Table 4-7: Consumer Attitudes/Behaviors Toward Shopping: All Consumers vs. Any Supermarket/ Supercenter, Trader Joe’s, and Whole Foods Shoppers, 2013 (percent and index of U.S. adults)
Attitudes and Behaviors Toward Environmental Concerns
Table 4-8: Consumer Attitudes/Behaviors Toward Environmental Concerns: All Grocery Shoppers vs. Trader Joe’s and Whole Foods Shoppers, 2013 (percent any agree and index of U.S. adults)

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