Trader Joe’s grocery store is known for its low-cost health foods, which often carry the company’s brand label. Peanut butter-filled pretzels are one such item that shoppers know and love. Recently, however, the snack’s original creator, Maxim Marketing, announced that it is suing Trader Joe’s for allegedly cutting it out of the market.
The accusations fly
Maxim Marketing is a company out of Southern California that claims to have invented the peanut butter pretzels in the 1980s. Until recently, the company supplied Trader Joe’s with thehard-to-make snack.
“We pioneered these items,” Terry Kroll, Maxim’s owner and chief executive, told the LA Business Journal. “We took something from nothing and built it into their top-selling savory snack.”
Maxim also claims that Trader Joe’s switched suppliers to ConAgra Foods, which effectively took away the food it created. As a result, Maxim is suing both Trader Joe’s and ConAgra. Maxim does not have its own factories, and used independent manufacturers to produce the snack for the Trader Joe’s label. According to National Public Radio, ConAgra has been buying these manufacturing plants over the years, pulling the pretzels from under Maxim’s feet.
Basically, Maxim feels that ConAgra and Trader Joe’s have now monopolized the product and that the company can no longer do business.
What it takes to make a pretzel
Students who take bread baking classes online know what it takes to bake a pretzel, but injecting peanut butter within its hard shell is much more challenging. Co-extrusion (the process used to make the snacks) wasn’t developed until the 1980s and was rarely used even then. Essentially, the process is the result of a pipe within a pipe. The outer pipe pumps pretzel dough while the interior one pushes the peanut butter. The uncooked mixture is put on a conveyor belt and taken through a 100-foot oven. If the measurements are off the whole thing explodes while baking. The pretzel needs just the right amount of moisture and thickness.
After Trader Joe’s tested the original peanut butter-filled pretzels produced by Maxim back in the ’80s, it asked the company to make an exclusive line, according to the LA Business Journal.
Cutting the middle man
Trader Joe’s has a history of avoiding distributors and going straight to manufactures, a practice that helps keeps prices down. However, Maxim had been the exception for many years. Now that Trader Joe’s has removed them, Maxim has very few places left to sell the snack.
Because Trader Joe’s can do business with whomever it chooses, Maxim may have a hard sell in court. The company has not made any statements on the issue.