ALDI lays out multi-pronged approach to creating a greener private-label business

31-Jan-2024 - Last updated on 31-Jan-2024 at 19:40 GMT

Image Credit: ALDI

Private-label giant and retailer ALDI is leveraging its deep partnerships with food manufacturers and ingredient companies to create sustainable products while making their retail stores more energy efficient, Una Hrnjak, director of sustainability at ALDI, told Food Navigator-USA.

Having previously served as the head of sustainability strategy and programs for Starbucks, Hrnjak moved into her current role at ALDI in April 2023, in part, because of the opportunity to work closely with its partners to create sustainable products.

“The partnerships that we have with our suppliers, it's so unique. It's the type of relationship where you can actually talk about what the supplier potentially needs to decarbonize. What do you need potentially to source better [or] source differently? ... We want to hear directly from our suppliers and our producers. We want to understand their challenges.”

Unlike other corporate structures, Aldi’s sustainability team sits alongside the buying team and collaborates to create sustainable products, Hrnjak explained. This “hand-in-hand” approach has proven helpful in ensuring that products meet sustainability objectives and provides a way for the sustainability team to educate purchasers about sustainable products, she added.

“Our products are good for people, and they're good for the planet. And the way that really starts for us is deep down into our supply chain first and foremost. So, what's top of mind is definitely how we're sourcing our products. Where are we sourcing them from? What are the suppliers that we're working with and the farmers in their network who wake up early in the morning every single day to make sure that we can offer the products that we offer to our customers.”

From coffee to meat: Creating a sustainable product portfolio

Hrnjak's coffee expertise is helping ALDI, which is the second-largest private-label purchaser of Fair Trade USA coffee, maintain and enhance its sustainable coffee offerings. The Fair Trade USA certification “really bubbled up to the top” because of its dedication to improving farmers' livelihoods and fostering environmental stewardship, she said.

ALDI is also a member of the “Sustainable Coffee Challenge, which is a large-scale collaborative effort, with companies, governments, NGOs, [and] research institutions,” designed to meet the global demand for coffee through understanding the challenges farmers, growing various varietals, and protecting biodiversity, Hrnjak said.

“When it comes to coffee, it's very much a combination of efforts. It's ensuring that we pick the best certification programs out there that provide resources to farmers, but then also that we're part of really driving that larger systems change and conversation and [providing] resources for farmers and suppliers.”

ALDI is also working with farmers and its partners to find solutions to challenges brought on by climate change, like the drought in California, where the retailer sources some of its products, Hrnjak said.

“A lot of it I think is equipping it early into the process [and] helping make sure that our buyers understand these complex challenges, and then prioritizing based off of the area of focus. So, whether it's climate, then, it's more than meat and dairy space, deforestation [is more] palm oil, etc. So, we're really trying to take a very intentional approach to go after some of the bigger topics right away, but certainly recognize it's all a journey and something we have to keep working on across the board on every product category.”

How ALDI's retail footprint factors into sustainability goals

Ensuring ALDI stores are running efficiently is another aspect of the retailer's multi-pronged approach to sustainability.

“If you think about where we have probably the most control, it is the physical building itself too. So, we really want to make sure that we're thinking about the most sustainable materials that are going into [stores],” Hrnjak said.

ALDI has removed plastic shopping bags from its stores and is transitioning to natural refrigerants to reduce carbon emissions, she said. The retailer has historically encouraged reusable bag usage, which also helped the company keep costs low, she added.

This year, ALDI will start purchasing environmentally-friendly refrigerants – like carbon dioxide and propane refrigerants – to replace current refrigerants for new, remodeled, and existing stores. The goal is to transition completely to natural refrigerants before the end of 2035.

The future: Winn-Dixie acquisition 'front of mind'

ALDI’s acquisition of Winn-Dixie and Harveys Supermarket, which is expected to close in the first half of 2024, provides an opportunity to grow its business and also bring its sustainability mission to a wider footprint, Hrnjak said.

“[In] 2024, it's hard to not acknowledge that there are big growth plans for ALDI with our anticipated acquisition. So, that's front of mind, I think for all of us is getting ready to see that growth here in the US, but then also making sure that that's done sustainably.”

When asked how ALDI plans to keep up with the pace of innovation in the market, Hrnjak pointed out that the company’s deep relationship with its private-label manufacturers offers a unique opportunity to innovate and create more sustainable products.

"When there are new trends and there are things that we want to consider and innovate, our connection point [with partners] is just so much closer... It's much more direct in terms of what we want to do together?” Hrnjak said. “That immediate partnership model with our suppliers positions us in a way to... lead and also innovate in a really unique way."