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Nik Sharma

Nik's Atomic Essays

3y ago

The DTC guy!

There's a common phrase that goes, "Everyone puts their pants on one leg at a time" to indicate humility, but across 42 states in America, that phrase becomes, "Everyone spends their Sunday afternoon's at Trader Joe's."

Trader Joe's, which has over 500 locations nationwide, holds the highest customer satisfaction ranking for a national brand, and there's a science behind it. On an annual basis, "Your neighborhood grocery store" generates close to $14,000,000,000 (USD 14B) in revenue, amounting to about $2,300 per square foot, compared to Whole Foods' $1,200 per square foot.

While most chains focus on promotions, at-home delivery, a mobile app, and following America's food trends, Trader Joe's does none of that, and they are the ones who create those trends. Because of it, they've become known for their healthier ingredients, lower prices (on average, 37% cheaper), and their cult community of shoppers.

Better Products

Did you know the TJ's Orange Chicken is the #1 selling product? Yup. When you buy a product with a Trader Joe's label, you can feel confident it contains no: MSG, artificial flavors, GMOs, or preservatives. The quality of their products is unmatched, compared to the laundry list of tricky ingredients you have to watch out for at traditional supermarkets.

In addition, consumers love Trader Joe's products because they're convenient and priced right. Whether it's two chicken burritos for $3 that take less than 4 minutes to heat up or the frozen Spaghetti Cacio e Pepe that takes 7 minutes on a stove, Trader Joe's cracked the code on solving convenience and better ingredients than any of its competitive freezer-aisle products.

Lastly, the products leave room for you, the consumer, to remix them how you like. Take the Salmon burger, for example. It takes a few minutes to heat, and then it becomes your choice to add BBQ sauce, teriyaki sauce, or a jalapeño pepper hot sauce. They do 80% of the work, but adding the final touch allows you to remix it and crown yourself "Chef."

Better Supplier Practices

What you probably didn't realize about traditional grocery stores is it's all pay-to-play. That's why when you go to down the beverage aisle, you'll see Dasani, Smart Water, Diet Coke, Sprite, Vitamin Water, and Honest Tea all together — they're all Coca-Cola products. Coca-Cola pays supermarket chains slotting fees, which gives them prime real estate, perfect eye-level shelf placement, and helps the retailer subsidize their costs.

On the other hand, Trader Joe's doesn't believe in charging for external marketing costs that get passed to their suppliers, nor do they charge slotting fees. And if you didn't already know, many of the Trader Joe's products you eat and love are made by national brands or local family-run companies. In addition, the company sets up very hush-hush private label deals to include, on average, 4,000 SKUs in a store, compared to ~50,000 SKUs in a typical grocery store.

When working with external suppliers, Trader Joe's is known for paying their supplies on time, and because of their volume, they can add a lot of revenue and scale to suppliers.

Better Environment

Have you ever been angry inside of a Trader Joe's? Probably not. The store's layout to makes you love every square foot of it. The workers regularly consume their products to be helpful in recommendations or when you have questions in the aisles. The design and branding of the signage and packaging are unique and trustworthy.

Trader Joe's is also a haven for product discovery. Vegan Chicken Tikka Masala, Ghost Pepper Potato Chips, or their Ketchup-BBQ-Salt-Vinegar-Dill Potato Chips keep shoppers constantly wondering what new items are coming next. A natural bi-product of these products is an online community that lives outside of the operated Trader Joe's profiles, amassing millions of views per month on reviews, how-to's, and recommendations.

Giving Disney a Run for their Money?

To me, I find that on a consistent weekly basis, Trader Joe's is my "Happiest place on earth." If you are planning to go soon, here is what I highly recommend you try:

  • Buffalo chicken dip (all of their dips are 12/10)

  • Roasted vegetable pizza (add your meat on top)

  • Gyro slices

  • Cotton candy grapes

  • Beef broccoli

  • Chicken tikka masala

  • Magnifisauce (equivalent to In-n-Out special sauce)

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