How Trader Joe's Keeps Its Beers So Cheap

There's a lot to love about Trader Joe's, including its array of gluten-free desserts and fan-favorite frozen meals. But if we're being honest, some of the best Trader Joe's finds are the ones found in the alcohol aisle. Not only can you grab a bottle of wine to go with our favorite types of cheese from TJ's, but they also stock inexpensive spirits that can pass as dupes for top-shelf bottles. One of the biggest bargains of all, however, is the chain's beer, but don't be fooled by the price; just because it's inexpensive doesn't mean it's cheaply made. 

In fact, most, if not all, of the beer sold at TJ's is contracted and brewed by well-known commercial breweries and simply packaged with the store's own private labels. By bypassing some of the costs incurred by brand-name beers sold at grocery and liquor stores, Trader Joe's can sell its brews at significantly lower prices than the big names. You might be surprised to know that the ingredients, packaging, and labor are not the most expensive parts of making beer. The bulk of the cost of making and selling beer comes from distribution and the retailer's margin. Trader Joe's circumvents these costs by working out deals with different breweries to buy directly, then passing on the savings to its shoppers.

With distribution as one of the biggest costs for every brand-name beer, unless a brewery self-distributes, it pays third parties to deliver to retailers and place the beer on shelves. This takes a lot of work off of a brewery's plate, but it costs — adding to the cost of the beer as much as 20%. Trader Joe's gets around this cost by brokering deals for large orders directly with brewers.

Then there's marketing; the bigger the brewery, the bigger the marketing spend. For example, according to Statista, Anheuser-Busch spent $313 million in 2023 to promote its brands in the United States. If you're a Trader Joe's fan, you know that the marketing is pretty no-frills (besides the weekly flyer). So it's no surprise that they spend next to nothing on marketing their beer — eliminating huge costs.

There's arguably one more reason why Trader Joe's beer is so inexpensive, however: It could be that the company keeps the price low to keep customers coming back. It's possible that house-brand beers like the cult favorite Simpler Times could be loss-leaders that keep its fanbase loyal, kind of like Costco's $4.99 rotisserie chicken. Whatever the reason, we're not complaining, because at less than $5 for a four-pack of many different beer styles, you can even afford to sacrifice a few Cookie Butter Beer cans to make a boozy milkshake.