What ALDI Is Telling Its Suppliers During Unprecedented Growth Period

One of ALDI’s strengths as it continues to gain followers and enter new markets is its limited assortment consisting of mainly private label products. In an inaugural supplier summit held online May 6, the discount grocery chain’s leaders emphasized the importance of keeping products on the shelf that mirror its mission of providing high-quality products to shoppers at low prices.

It’s a pivotal time in that mission, as ALDI pursues its ambitious goal of adding 800 locations by the end of 2028 under a $9 billion expansion plan. Speaking to suppliers, ALDI USA President Dave Rinaldo said, “Now, we are taking growth to the next level in a very intentional way.”

CEO Jason Hart affirmed that the retailer and its suppliers are entering the organization’s fastest-ever growth period, with a quarter of U.S. households now reporting that they shop at ALDI. “As we add new stores, our core values to you and our customers won’t change. We place high value on partnerships,” he noted.

Among other goals, the summit was intended to help suppliers understand the parallel business growth they can achieve as ALDI widens its footprint and to ensure that products are available and priced properly in a market that promises to remain remarkably competitive. “We need your help,” said Hart. “It’s our goal to be America’s first stop for grocery shopping, which means we want your products to be the ones they bring home.”

The virtual summit also featured updates from Joan Kavanaugh, VP, national buying, who likewise underlined the importance of product consistency and availability. “We make many intentional decisions every day to drive efficiencies, cut costs and pass savings onto customers. We need you, our partners, to share this commitment so we can continue to win on price in every market we enter,” she said. 

To make that happen, Kavanaugh reported that ALDI is working with suppliers on long-term planning, so vendors can make informed decisions and plan to scale accordingly. “We need to proactively identify where we can close any supply gaps between your production capacity and ALDI customer demand,” she said. “The beautiful thing about being an ALDI supplier is that in 90% of our stores you are not competing with other brands. When you are a private label mustard supplier at an ALDI store, you are the only game in town. But this also means that having an item run out of stock is a much bigger deal than at other retailers.”

On that note, ALDI leaders reiterated their commitment to giving suppliers security to invest in growth to support store expansion, especially in key U.S. regions such as the Northeast, Southeast and West. “For some suppliers, it may make sense to enter into a long-term agreement with ALDI to reduce risk. We are more open to that than ever before,” Kavanaugh declared. 

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Sharing results of a recent supplier survey, Scott Patton, VP of national buying and customer interaction, reported that partners are also looking for additional tech support and the retailer is responding by creating a new infrastructure for communications and centralized ordering functions. “These resources have been put into place to support your team and ours,” he commented. 

As ALDI and its suppliers forge ahead during the accelerated growth phase, sustainability remains a concurrent priority, along with cost optimization. Kavanaugh reported that 75% of ALDI-exclusive packaging is now reusable, recyclable or compostable and that rate is expected to hit the 100% mark next year. Here, too, ALDI is asking suppliers for assistance for mutually beneficial enhancements. 

“We want to help you identify opportunities and innovations that will reduce our environmental impact,” she remarked, adding, “People assume that doing the right thing costs more and sometimes it does, but we have found that by working together, we can identify efficiencies to give you certainty to invest.”

ALDI is one of America’s fastest-growing retailers, serving millions of customers across the country each month. With about 2,200 stores in 38 states, Batavia, Ill.-based ALDI U.S. employs 45,000-plus associates and is No. 24 on The PG 100, Progressive Grocer’s 2022 list of the top food and consumables retailers in North America.