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Trader Joe’s Brazilian Cheese Bread maker sues rival for trade secrets

By Renata Geraldo, The Seattle Times
Published: December 20, 2023, 7:41am

The secrets behind Trader Joe’s frozen Brazilian Cheese Bread may be out.

The company that makes the cheese bread product filed a lawsuit last week alleging a competitor used “improper means” to learn its unique processes and try to obtain the cheese bread supplier contract with Trader Joe’s.

Des Moines-based Partners, a Tasteful Choice Company, also maker of cracker brands such as All-American Crackers, alleged Shaw Bakers accessed its trade secrets through a consultant who also worked for a sister company of Shaw.

The consultant allegedly “videotaped Partners’ production process for Brazilian Cheese Bread and sent the video to Shaw.” Partners has a strict policy against videotaping “because it could reveal proprietary processes,” the lawsuit said.

Partners said it made millions of dollars from selling cheese breads to Trader Joe’s in the past few years.

Trader Joe’s and the attorneys for Partners and South San Francisco-based Shaw did not respond to inquiries.

Besides the cheese breads, Partners makes and distributes crackers, cookies and other baked goods, according to the lawsuit filed in U.S. District Court for Western Washington.

The family-owned business was founded by late entrepreneur Marian Harris in 1992 and later passed down to her son and daughter, according to its website.

The company grew over the years. It moved from a Kent facility to a larger one in Des Moines in 2017.

Last year, the company said it employed nearly 100 workers, had four brands and sold a wide variety of products and flavors. Still it struggled with debt following a pandemic boom and filed for Chapter 11 bankruptcy in January 2022. Its bankruptcy bid failed as a judge dismissed the case shortly afterward.

Shaw Bakers owns baked goods brand La Boulangerie, which has six locations in California, and sells products under that brand to grocery stores.

Nicolas Bernadi, a San Francisco food industry entrepreneur, co-founded Shaw in 2016. Partners contends in the lawsuit that Bernadi was communicating with the consultant who allegedly stole Partners’ trade secrets.

Bernadi didn’t respond to the Times’ request for comment.

Selling Brazilian cheese breads or not, Shaw is growing its business. Last month, it opened a new production facility in California under the La Boulangerie brand.

Canadian company Premium Brands Holdings has had partial ownership in both companies since 2017.

“Shaw Bakers is now expected to more than double its sales in 2024 to more than $100 million U.S. and has good visibility to again double its sales over the next two to three years,” said Premium Brand Holdings CEO George Paleologou in a call with investors last month.

Paleologou did not mention Partners in the call.