Joe Coulombe, a struggling convenience store owner in Los Angeles, decided in 1967 to open a grocery chain to attract a small but growing number of well-educated, well-traveled consumers who had been overlooked by supermarkets.
Columbian realized that international travel was about to explode thanks to the new Boeing 747 hitting the market. To get the name of his new store, a Colombian landed on Trader Joe’s to conjure up exotic images of the South Seas. The name is inspired by Trader Vic’s, the popular Tiki Bar that started in California.
But it discontinued, and the first Trader Joe’s opened in Pasadena, California, in 1967. The location was ideal for his new target client, surrounded by a college campus, a hospital and large engineering firms.
The first Trader Joe’s store had a nautical theme with nautical artifacts including a ship’s bell, fishnets, and half a rowboat. The checkout counter was an island with a roof. The staff wore Polynesian shirts and Bermuda shorts. The manager was called a captain and the assistant was the first companion. The soft Hawaiian music is played through the speakers.
But the merchandise is nothing like what you’d find at Trader Joe’s today.
The original store had a variety of typical groceries, along with discounted magazines, books, stockings, logs, and picture finishing. But the big draw was the choice of alcohol.
California had fair trade laws on alcohol, so manufacturers set minimum prices and it was illegal to lower them. Since Coulombe could not compete by offering low prices, he realized that he had to offer a large variety to stand out.
The first Trader Joe’s boasted of having the largest variety of alcohol in the world – 100 brands of Scotch, 50 brands of bourbon and gin and 14 brands of tequila.
Columbian eventually found a loophole in California’s fair trade laws that allowed his store to import fine French wines and sell them at lower prices than competitors, which helped him gain access to wine connoisseurs. (It wasn’t until years after Trader Joe’s launched their famous $1.99 Charles Shaw wine known as “Two-Buck Chuck.”)
By the early 1970s, Columbian caught up with the growing health food movement, believing it would attract the same kind of customers who just so happened to be wine connoisseurs.
“His ideas for grocery marketing came from his marketing for wine,” said Benjamin Lauer.
Trader Joe’s first specialty product was granola, then he began adding fresh orange juice, vitamins, nuts, dried foods, and cheese. At one time, Trader Joe’s was the largest importer of wild cheese in the United States.
Immerse yourself in the healthy food culture of Berkeley and San Francisco.
“I hired a young hippie from UC Santa Cruz to teach us the language,” he said.
Brandenburg Brownies and Sir Isaac Newton
In 1977, Colombian made Trader Joe’s again — putting it on a path that’s more familiar to today’s customers.
“While we developed Trader Joe’s, its greatest departure from the norm wasn’t its size or decor,” Colombe said. “It was our commitment to product knowledge, something that was completely foreign to the culture of mass merchants, and our turn our backs on branded merchandise.”
The company even crafted its own brand names and brands to connect with well-educated shoppers — eg Brandenburg Brownies and Sir Isaac Newton — Columbian said.
Laure said that creating strong private-brand offerings for competing national brands would be one of his legacies in the supermarket industry. “It changed that balance in the grocery industry. Suddenly, grocers were empowered in a way they weren’t.”
But a Colombian resisted opening dozens of new stores.
It was the collection of the few stores that Columbian opened in Southern California, which fit the demographic he was looking for—teachers, musicians, journalists, and other professionals.
Aldi executives have been traveling from Germany to visit Trader Joe’s once a year, but have taken a hands-off approach to overseeing the growing chain.
By the time Columbian stepped down as CEO in 1988, Trader Joe’s had 27 stores in California and sales estimated at $150 million.
“My successors at Trader Joe’s have taken up a chain of 30 stores nationwide with a marked commitment to the core concepts we started with,” Colombe said in 2010.
“Pop culture junkie. Tv aficionado. Alcohol ninja. Total beer geek. Professional twitter maven.”