A lot can happen in two years. At Aldi U.S., in that timespan, the retailer has added more than 200 stores, with another 100 on the way this year, and has set a goal to hit 2,500 stores by the end of next year.
Then, we can talk about its remarkable online activities.
Consider the fact that two years ago, the Batavia, Ill.-based retailer did not have curbside pickup and had just begun a delivery service with Instacart. It now has curbside pickup running at around half of its locations and delivery is available at nearly all of its stores. It was also the first retailer to accept EBT SNAP as a payment option through Instacart.
Obviously, the COVID-19 pandemic accelerated Aldi’s e-commerce expansion — as it did across retail — but this digital embrace also is a key factor in what can be considered the next evolution of Aldi.
Aldi earned its new shoppers by curating to what they need, Lempert said. For example, the retailer will stock four olive oils, as opposed to dozens at some conventional grocers, he added. There will be an everyday olive oil, an extra virgin olive oil, an organic olive oil and one imported from a small town in Italy.
This is the model that newer shoppers prefer, Lempert said, noting that it is in-step with the similar rise of Trader Joe’s. While Lempert said the two retailers don’t communicate with one another, “the two of them have changed the way conventional retailers look at store brands. They woke them up and said, ‘Hey, if we do a good job on our store brands, shoppers will buy them.’”
Aldi’s Exclusive Brands
More than 90% of Aldi’s assortment is made up of its exclusive brands, of which there are dozens. Some of the standouts, according to Laubaugh include:
- Specially Selected: A range of gourmet and specialty items such as German coffee, premium pastas and seasonal sweet treats like the Specially Selected Belgian Cocoa Dusted Truffles;
- Earth Grown: Launched in 2018, the exclusive vegetarian and vegan line was an instant success and has quickly grown to become one of Aldi’s most popular brands. Earth Grown was the quickest to market in just under eight months;
- Simply Nature: Customers are increasingly aware of what they are putting into their bodies and Simply Nature products are organic, non-GMO and free of added artificial ingredients and preservatives; and
- Little Journey: Baby and toddler essentials.
Looking at the year ahead, Laubaugh said the company is aiming to take advantage in the renewed interest in cooking, baking and grilling at home. “We’re about a year into being at home full-time and people still love to bake,” he said. Items coming soon include giant marshmallows for s’mores season and the return of a popular funnel cake kit. The retailer has seen success specifically through its specialty organic sugar cane, almond flour and premium chocolate chips, too.
Upcoming Aldi items
“While the pandemic necessitated cooking at home, consumers have rediscovered the joy of it, and we’ve seen that reflected in how and what they’re buying,” he said. “Some customers are also taking home more premium items to recreate the restaurant experience at home.” Aldi is looking to add to that this summer with the launch of a grill master collection kit that includes burgers, steaks, pork chops and chicken.
The retailer also has on deck a new Zarita Lime Margarita drink, more for the grill like L’oven Fresh Keto Friendly Buns, pizzas, snack foods and Park Street Deli Spicy Black Bean Hummus to name a few. The company’s Mama Cozzi’s Take & Bake Pizza won its 2020 Aldi-exclusive products Fan Favorites survey.
Laubaugh said the product-development process is handled closely with its suppliers. Aldi works with thousands of suppliers and he said they’re looking for more with an aim on building strong, collaborative partnerships. The retailer and supplier relationship involves developing products quickly based on consumer trends, enabling them to adjust any current products to bring in new ones based on market movement and customer feedback.
“Our supplier network is a crucial component of the company and directly impacts our ability to serve customers,” he said. “They are our partners in developing innovative products, cutting costs from the supply chain and maintaining the highest quality standards. When identifying new potential partners, we’re looking for organizations that can do this and keep pushing us to be better.” Aldi has a dedicated page on its website on steps to become a supplier.
As Aldi looks to bring new shoppers into the fold through its digital capabilities, another area of focus is through sustainability and food transparency. The retailer recently published its sustainability charter that reiterated a pledge to make all store brand packaging — including plastics — to be recyclable, reusable or compostable by 2025, as well as reduce packaging materials by 15% during that same span.
Additionally, all Styrofoam will be removed from produce packaging, and the retailer will be redesigning packaging to reduce excess plastic from products such as teas, fruits and bread, labeling products to promote recycling at home, using cardboard sleeves for more than 90% of apparel items.
“The global impact of plastics can’t be ignored,” said Jason Hart, CEO of Aldi U.S. “We can’t get rid of plastic everywhere overnight, but we continue to work to eliminate plastics anywhere we can. Where we do need plastic, we are committed to choosing materials that contribute to a circular plastic economy.”
Sustainable sourcing initiatives include more than 40 coffee products that are currently certified, and Simply Nature and Barissimo coffees will be sustainably sourced by the end of next year. Aldi is the second-largest private brand purchaser of Fair Trade USA coffee. The retailer’s own brand chocolate bars and candies are certified as sustainably sourced by Fairtrade, Fair Trade USA or Rainforest Alliance. Aldi also joined the Ocean Disclosure Project that makes its wild-caught seafood transparent.