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Trader Joe’s first private label food product was granola. We installed Alta Dena certified raw milk, to the disgruntlement of Southland, and within six months were the largest retailers of Alta Dena milk, both pasteurized and raw, in California. We began price-bombing five-pound cans of honey, and then all the ingredients for baking bread at home. We installed fresh orange juice squeezers in the stores, and sold fresh juice at the lowest price in town. By late in 1971, we were moving into vitamins, encouraged by my very good friend James C. Caillouette, MD. Jim spent a lot of time talking with the faculty at Cal Tech. He was convinced that Linus Pauling was on to something with his research on vitamin C. I set out to break the price on vitamin C. At one point, I think, we were doing 3 percent of sales in vitamin C! Later, Jim forwarded articles from the British medical magazine Lancet, describing how a high fiber diet could avoid colon cancer. But where could we get bran? The only stores that sold it were conventional health food stores, who sold it in bulk, something that I have always been opposed to on the grounds of hygiene. And still am! Leroy found a hippie outfit in Venice—I think it was called Mom’s Trucking—which would package the bran. But bran is a low-value product. They couldn’t afford to deliver it. Since they also packaged nuts and dried fruits, however, we somewhat reluctantly added them to the order. And that’s how Trader Joe’s became the largest retailer of nuts and dried fruits in California! Brilliant foresight! Astute market analysis! By 1989, when I left Trader Joe’s, we regularly took down 5 percent of the entire Californian pistachio crop, and we were the thirteenth largest buyer of almonds in the United States—Hershey was number one.
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Joe Coulombe (Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys)