Joe Coulombe, a young entrepreneur who ran a failed chain of convenience stores named Pronto Markets 60 years ago.

He’s today known as “Trader Joe”, the founder of a national grocery store empire. There are more than 350 locations in the United States, including 10,000 employees. The company has an expected 2020 revenue of $16.5 million. Supermarket News and U.K. research firm IGD.

According to an earlier memoir, this would not have been possible without small numbers of large eggs.

Coulombe, at the age of 90, died February 2020.Becoming Trader Joe: How I Did Business My Way & Still Beat the Big Guys,” which was published posthumously in June. Pronto Markets, a California-based small business with 10 locations, started it in 1962. It was struggling to keep up against bigger rivals such as 7-Eleven.

Coulombe was approached by a farmer who made an offer. Coulombe wrote that the “egg man” came into his tiny office. Coulombe wrote, “He was having a problem with too many Extra Large-AA eggs.”

Coulombe offered the egg farm to buy them for the same amount as the regular-sized LargeAA eggs but they were 12 percent larger. The farmer had a limited supply — not enough for large supermarkets to place an order, but he’d still suffer a substantial loss if he couldn’t unload them.

Coulombe jumped at the chance to offer the farm worker a deal, and immediately began running ads promoting the discount eggs. These eggs were sold the same as regular eggs. Business picked up — but more importantly, the scenario got Coulombe thinking about other ways to exploit loopholes and market inefficiencies for bargain prices.

Coulombe stated that the ads we ran “revolutionized Pronto Markets.” And they allowed me to get the profits that I required, to first stay afloat and then to create Trader Joe’s. 

For example, import wine is one loophole. Coulombe discovered a friendlier importer in 1970 after opening the Pasadena store branded as Trader Joe’s, California. He could obtain wines from France’s Bordeaux region at a much lower cost than other wholesalers.

Coulombe was allowed to set the prices for selling wine by his importer. Trader Joe’s was able to lower the price other retailers were asking for, as they were not subject to California’s Fair Trade Law.

We had discovered a loophole and, by God’s grace, we were able to drive a truck right through it! Coulombe wrote.

The egg experiment helped Trader Joe’s grow over the years. It was one of four foundational tests that helped determine the products to be carried. The items had to have a high value per cubic inch and a fast rate of consumption. They also needed to be easy to handle, as well as something that could stand out in price or variety.

At one point, Coulombe and his team realized that U.S. regulators had placed tight restrictions on importing most types of cheeses, to keep domestic-produced cheeses competitive — but no such regulations existed for Brie.

Trader Joe’s was quickly America’s top importer and distributor of Brie. The cheese even went for less that Velveeta at one point. The company later used the same principles for maple syrup and whole coffee beans, purchasing the former in 50-gallon drums purchased from a Quebec cooperative.

Coulombe, in his memoirs, described Pronto Market’s extra-large egg sales as “our first product information breakthrough”.

It was definitely not the last.

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