Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

I loved this book. Some background: I have been a Trader Joe's customer for 40 years or so, and still shop there weekly. This is a breezily written account of the history of the store, with great marketing lore and anecdotes. Who knew Trader Joe dominates the 100% maple syrup business, or that the retailer invented the category of almond butter?

The organization is unusual, in that rather than chronological order, the book opens with Trader Joe's greatest marketing hits. The story telling comes across as if you were sitting across the table from an avuncular Joe Coulombe.

I am reviewing the print edition as another review said the Kindle version had editing problems. I only came upon one such problem in the print--a page of text was repeated--but this may because the book was published posthumously. (Joe Coulombe died last year).

I know Trader Joe's to be a fabulous retailer, with top-rate employee relations. After reading the book, I know the store's secrets of success.

I am fascinated by this book- just can't put it down. The info is enlightening and entertaining!! This is much more than a story about Joe, it is a history lesson as well. I have learned so much- and loved every minute of it!! 5 stars doesn’t come close - should be 10 stars!! A must read if you shop at Trader Joe’s or have any type of business dealings with the pubic.

Relatively quick read, definitely more focused on the business aspects and some of the idiosyncratic moments that allowed Trader Joe's to develop as an institution.

I think there could have been value from additional perspectives, but it was still a decent read and I enjoyed it.

This could have been an interesting book -- the business autobiography of the guy who started Trader Joes. But the book is pretty close to useless and unreadable because it is mostly a collection of disjointed war stories, typically battles with California regulatory agencies involving alcoholic beverages. The author typically fails to explain or give sufficient background so the stories are hard to follow. It is also far from clear why these old stories involving a very different regulatory environment should interest anyone today.. Those who hope to get general insight into retail businesses could probably do better elsewhere.

Joe C was both an ornery and an inventive retailer. He tells it like it is as he built the Trader Joe's Franchise. So much more to the story than you can imagine.

I read a lot and became interested in this from a news article I found online, however in the one page story online it pretty much covered every great idea he had. As mentioned I generally read 1+ books/week and thus far after several weeks I haven't made it 50% through this book and I own three grocery stores so the content is relevant to me. There have been a few things it has reinforced thus the two stars as compared to lower.

I’ve rarely met a Trader Joe’s customer who is not a Trader Joe’s raving fan. How about you?

This past June, HarperCollins Leadership published a fascinating read by the founder of Trader Joe’s. And yes—it’s a leadership book, but you’ll also be fascinated by the delightful discoveries down every aisle of this memorable treat, “Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys,” by Joe Coulombe with Patty Civalleri.

Joe Coulombe (he died at age 89 in February 2020) gifted us with MBA-level thinking in leadership, management, retailing, economics, history, and humor—all in 288 fast-reading pages. Imagine Renaissance Man meets Peter Drucker meets The Galloping Gourmet.

“Becoming Trader Joe” checks the box in 20 management buckets (core competencies) and the three arenas of Cause, Community, and Corporation:

THE CAUSE

#1. THE RESULTS BUCKET. Trader Joe’s financial growth and results were stunning—but, as you’ll read, it was not about the money. When asked a product pricing question—“What percentage margin did you aim for?”—this inquiry launched Joe Coulombe into his “tirade about how you pay your bills with dollars, not percents.”

#2. THE CUSTOMER BUCKET. Trader Joe’s niche customer: the overeducated, underpaid, and well-traveled person. Not “the masses who willingly consumed Folger’s coffee, Best Foods Mayonnaise, Wonder Bread, Coca-Cola, etc.” Joe Coulombe adds, “…I saw an opportunity to differentiate ourselves radically from mainstream retailing to mainstream people.” He notes, “I believe in the wisdom that you gain customers one by one, but you lose them in droves.”

#3. THE STRATEGY BUCKET. Coulombe creatively names the three versions of Trader Joe’s: Good Time Charley (1967-1970), Whole Earth Harry (1971-1976), and the final version—Mac the Knife (1977 and beyond). Note: Joe Coulombe and Russia gave up Five Year Plans in the same year, 1988!

#4. THE DRUCKER BUCKET. Greatly influenced by Peter Drucker, Coulombe notes Drucker’s “seminal piece in the July 25, 1989, 'Wall Street Journal' called ‘Sell the Mail Room.’” This was six months after Coulombe left Trader Joe’s—but he reminisces about his good and bad outsourcing decisions. (“We never took mainframe computing inhouse…” Another rule: “Never buy a computer you can’t lift.”

#5. THE BOOK BUCKET. Ironically, Joe Coulombe names the “best” book on management—but he actually lists three of them! (Even better!)
• “The Guns of August: The Pulitzer Prize-Winning Classic About the Outbreak of World War I,” by Barbara Tuchman – “It’s the best book on management—and, especially, mismanagement—I’ve ever read.” (p. 14)
• “The Winning Performance: How America's High-Growth Midsize Companies Succeed,” by Clifford and Cavanaugh – He notes his favorite quote “from my favorite book on management.” (p. xiv)
• “The Mythical Man-Month,” by Frederick P. Brooks Jr. – “…one of my favorite books on management.” (p. 204)
• And one more: Coulombe said “the best economics book I ever read” was “Seven Kinds of Inflation,” by Richard Dana Skinner (1937).

#6. THE PROGRAM BUCKET. Coulombe was thinking supply chain and logistics well before our current crisis! Chapter 13, “Virtual Distribution,” includes two lists of products carried in 1976 versus 1988—and the percentage of sales for each product. The 1976 list included 19 categories. The top-four sellers: dry groceries, milk and ice cream, and cigarettes at 10% each. Wine was fourth at 8%. The 1988 list: wine (22%), dry groceries (12%), nuts and dried fruit (12%), and frozen foods (11%). The 1988 list was pared down to 14 categories. Read the fascinating rationales for every yes/no buying decision. This chapter reminded me of the book, “Nonprofit Sustainability: Making Strategic Decisions for Financial Viability.”

THE COMMUNITY

#7. THE PEOPLE BUCKET. “…the most important single business decision I ever made was to pay people well.” Coulombe adds, “At a time when the minimum wage was $4.35, we often paid $13.00 per hour because these people were worth it. A distinction between full-time and part-time is a false dichotomy when it comes to productivity.” Plus, to enrich product knowledge of Captains (aka the top manager in each store), Trader Joe’s sent every Captain and spouse to Europe “to make a three-week grand tour of the wine and cheese regions in Germany, Switzerland, and France.”

#8. THE CULTURE BUCKET. “…as Trader Joe’s became famous, the employees began earning something else: prestige. To be part of Trader Joe’s brought them instant recognition from their friends and families.”

#9. THE TEAM BUCKET. Coulombe was not a silo thinker. Chapter 18, “Double Entry Retailing” is a crash course for every manager on what matters and the interrelationships of key areas. Team members influence and impact a whole system—with five variables on the “Demand Side” and 10 variables on the “Supply Side.”
• Demand Side: assortment of merchandise, pricing, convenience, credit, and showmanship.
• Supply Side: merchandise vendors, employees, “habits” and “culture,” systems, non-merchandise vendors, landlords, governments, bankers and investment bankers, stockholders, and crime.

Coulombe’s vision of teamwork found inspiration from Pierre Monteux, the conductor of the San Francisco Symphony (during Coulombe’s years at Stanford University). Much later, he read this in the “Los Angeles Herald Examiner,” “Monteux never tried to get a performance out of an orchestra. He was always giving one with them.”

#10. THE HOOPLA! BUCKET. No surprise—it was a hoot (and still is) to work at Trader Joe’s. He writes, “There was a particular angle to the naming of our products. I wanted to create a silent conspiracy among the overeducated, underpaid people in town, so that as they moved down the aisles they would read secret messages on the products.” Examples: Brandenburg Brownies, Sir Isaac Newtons, The Bagel Spinoza, The Peanut Pascal. “My favorite of all the private labels was Heisenberg’s Uncertain Blend of coffee beans.” (I had to google it. Search for the “uncertainty principle.”)

Another Hoopla! seasoning: “Showmanship” is defined as “the sum total of all efforts to make contact with the customer. It’s the most ephemeral, the most difficult, and the most important of the Demand Side activities.”

#11. THE DONOR BUCKET. As of 1988, Trader Joe’s was receiving 300 donation requests per year from nonprofit organizations. Coulombe had five policies that guided their giving, including: “1) Never give cash to anyone. 2) Never buy space in a program. That is money thrown away. 3) Give freely, give generously, but only to nonprofits that are focused on the overeducated and underpaid.”

In 2020, Trader Joe’s also donated nearly $345 million dollars of food and beverages, which equates to approximately 69 million meals, through their Neighborhood Shares program. Every nonprofit fundraiser should read “Promoting through Nonprofits” in Chapter 9.

#12. THE VOLUNTEER BUCKET. This is stunning! Joe Coulombe—personally—volunteered his time to write and record a one-minute broadcast for a Los Angeles classical music radio station. The opening line, “This is Joe Coulombe of Trader Joe’s with a word on food and wine.” He writes, “We needed the publicity in those days, and KFAC was right on our target of overeducated and unpaid people.” He recorded 3,300 unique scripts (as in…no repeats!) for “Words on Food and Wine” and he would record 50 or 60 broadcasts in a session that left him “pretty well burned out.” Oh, my. This discipline “forced me to study the field of food and wine.”

#13. THE CRISIS BUCKET. “Hairballs” is the title of Chapter 10—and the first line cautions, “All businesses have problems.” Coulombe’s favorite management quote is from Tex Thornton of Litton Industries: “If all the facts could be known, idiots could make the decisions.” The author writes, “Early in my career I learned there are two kinds of decisions: the ones that are easily reversible and the ones that aren’t.”

This must-read chapter includes the section, “The Worst Hairball of My Career: The United Farm Workers’ Secondary Boycott.” Whew! The boycott of Trader Joe’s—just before Thanksgiving in 1971—was actually organized by young seminarians from Union Theological Seminary in New York.

THE CORPORATION

#14. THE BOARD BUCKET. When he retired from Trader Joe’s, Coulombe served on the board of directors of several companies. He also consulted with companies, but didn’t have the highest view of consultants! He found board work and the writing of this book, “satisfying, challenging, and appropriate to my age.” His succession plan (selling the company, continuing to lead it for a few years, and then exiting at age 58) is instructive for board members and CEOs.

#15. THE BUDGET BUCKET. Did you know that Trader Joe’s is the largest retailer of maple syrup in the United States? Ditto wild rice. That—and more—is from the introductory chapter, “A Trader Joe’s Sampler.” While financial steps (and missteps) are discussed throughout the book, budget-minded leaders will find the list of “Some of the Best Deals We Ever Made” absolutely fascinating. That topic was asked and addressed during a lecture he gave in 1998 for the Culinary Historians Society—“a lecture that led to this book.” (You’ll also appreciate the author’s pre-modern references to adding machines and slide rules!)

#16. THE DELEGATION BUCKET. You don’t grow from one store in Pasadena, Calif., to 530 stores nationwide by being inept at delegation. I could write an entire review—just on Trader Joe’s delegation competencies, but I’ll spare you. Just this: “We fundamentally changed the point of view of the business from customer-oriented to buyer-oriented. I put our buyers in charge of the company.” See more in Chapter 11, “Mac the Knife,” and how reducing the number of products—and requiring every product to pay its own way—put the authority and the responsibility on the buyers. Fascinating.

#17. THE OPERATIONS BUCKET. Taking a cue from the skunkworks concept by Tom Peters (read “In Search of Excellence”), Joe Coulombe created three major skunkworks projects in his central management: Skunkworks I: Buying, Skunkworks II: Sales, and Skunkworks III: Accounting. “I had signs made with these titles to be hung in each department. Over my door was the sign, ‘Chief Skunk.’”

By the way, the Trader Joe’s approach to operations (especially the art and science of selecting store locations) should be required reading in seminaries for Church Planting 101. (Hint: Trader Joe’s locations are situated closest to their niche customers: the overeducated and underpaid.)

#18. THE SYSTEMS BUCKET. Fascinating! (Have I used that word yet?) “Every full-timer was supposed to be able to perform every job in the store, including checking, balancing the books, ordering each department, stocking, opening, closing, going to the bank, etc. Everybody worked the check stands in the course of a day, including the Captain.” Note: When I met Jason Addy this week (a 21-year employee, and the new Captain at the San Clemente, Calif. store), he was working the check stands! The Trader Joe’s “system” builds upon “the medieval French verb, retailer, which means to ‘cut into pieces.’”

#19. THE PRINTING BUCKET (aka the Communication Bucket). Trader Joe’s launched the “Fearless Flyer” newsletter in 1970 (now also online here). They synchronized promotion with purchasing—similar to one of my favorite axioms to “use publication deadlines to fine tune organizational decision-making.” Coulombe writes that “the ‘Fearless Flyer’ was an educational medium and hundreds of customers kept three-ring notebook collections of the issues so they could refer back to the articles. For years, we printed three rings on the cover.”

#20. THE MEETINGS BUCKET. Your approach to meetings (with staff, board, vendors, and others) spotlights your organizational culture—but retailing is unique. When to meet? Coulombe hosted two employee parties every year (summer and Christmas), but planned two nights for each—to accommodate those who worked nights. Perhaps the focus on buyers is best illustrated with this: “Whenever a vendor claimed to be truly desperate, we offered to meet him 6:00 p.m. on Friday night. That separates the wheat from the chaff!” (For more on the culture of meetings, read “Made From Scratch,” written by the founder of Texas Roadhouse restaurants.)

Sorry. I got carried away—this book is so good, but my review is way too long. Sorry, again! Suggestion: after you read “Becoming Trader Joe,” read the new book on creating superb customer experiences, “From Impressed to Obsessed: 12 Principles for Turning Customers and Employees into Lifelong Fans,” by Jon Picoult.

If you're in business, this is a must read. Joe's a man of deep insight and I'm mulling over his lessons for my own business. It's his story, of course, but the bigger lesson is: The little guy can study what the big boys are doing (or not doing), can jump into the fray and become a beloved business and royally kick ass. I'd like to think Elon Musk (Tesla, SpaceX, the Boring Company, and others) called up Joe and they had a productive talk...but probably not. :)

Not well written and framed around dumb luck, gets boring and repetitive quickly

Wow, what a well written book! Joe Coulombe writes from the heart in clear and easy to read fashion. He comes across as a humble and hard working individual. Joe shares his successes and failures in forming and operating Trader Joe's. In conclusion he shares personal thoughts on his sale of TJs. As an MBA and avid business reader, I found this book to be an insightful read!