Trader Joe's is accused of ripping off smaller food brands

• Trader Joe's is known for carrying private-label versions similar to other brands' snacks and foods.
• But according to Taste, some small brands claim that it's shamelessly copying their products.
• Several brands said they had sent samples and negotiated for a deal, but the grocer went ahead and made a dupe.

Trader Joe's is beloved by its shoppers for having good prices and a constant flow of surprising new treats. A new type of dark chocolate bar? A new tea flavor? A new dipping sauce? Sure, I'll try it!

A new investigation from food publication Taste says that some small food brands believe that Trader Joe's has ripped them off — copied their product and cut them out of a potential deal.

Unlike a regular grocery store, Trader Joe's carries mostly only its own private-label brand — it sells a big yellow cereal box of "Joe-O's" instead of Cheerios, for example.

For some packaged items, the Trader Joe's version is made by a well-known name brand under a private labeling deal. Trader Joe's doesn't make those deals public, but it can be easy to guess what a product is a "dupe" of. Eater analyzed FDA recalls to uncover which name brand made a white-labeled Trader Joe's version. As of Eater's analysis in 2017: Stacy's pita chips also made the Trader Joe's pita chips, Naked made their green juice, Tribe made the classic hummus, and so on.

According to the Taste report, in certain cases, Trader Joe's has shown interest in a small brand, asked for samples and more information under the premise of doing a deal with the brand — and then turned around and made a highly similar product on its own.

A company called Brooklyn Delhi that makes jarred Indian sauces believes Trader Joe's copied one of its signature sauces after a private labeling deal fell through. Another small brand, Auria's Malaysian Kitchen, claims a similar thing happened to them:

According to [Auria] Abraham, the parameters of the deal required her to partner with a specific co-packer (a third party that handles the manufacturing) based in California. Abraham exchanged several calls and emails with the co-packer in late 2019, but the financial terms were onerous, leaving Abraham feeling uneasy about a potential partnership. In return for private labeling her product for Trader Joe's, she was told she would receive a modest finder's fee based on the co-packer's profits—not a percentage of Trader Joe's sales.

After sharing samples with the co-packer and sending a counteroffer asking for greater transparency, she never heard back from him or from Trader Joe's. Within a matter of months, Trader Joe's released a product with a similar recipe and flavor profile that it called Thai-Style Green Chili Sauce. Its sauce was also made with jalapeño and Auria's signature sambal ingredient, makrut lime leaves (Trader Joe's labeled them as "Thai lime leaves" on its product's jar).

The small brand owners said that Trader Joe's tactics were unlike Costco or other big chains that do private labeling. One brand owner, who thinks that Trader Joe's copied their hummus with chili crisp topping snack, compared the grocer to fast-fashion brands Shein or Zara.

Trader Joe's told Taste, in response to questions about its story: "When we develop our products, we meet with many potential producers to determine which can best deliver on food safety, production capacity, product quality, and price. We are proud of our long history of supporting vendors and their growth with us. For a range of reasons, we are unable to work with every company we contact and realize our decisions to not pursue certain products can be disappointing." Trader Joe's did not immediately respond to a request for comment from Business Insider.

I love shopping at Trader Joe's not only because it has good prices on staples, but fun new items to try. Knowing that these new items may sometimes be the result of dealings that could squeeze a small brand — well, that does not feel good.