It was a privilege to be part of the second Poultry Industry Programme that Aldi have opened their doors to. On the 17th January we were hosted at Aldi’s headquarters in Atherstone, Warwickshire by David Cole, Buying Director for Fresh Meat and Louise Rome, Buying Director for Eggs and Home Baking. It was fantastic to be able to ask open and challenging questions to David and Louise, who were both happy to address any queries we had. This really is a testament to the fantastic relationship between the NFU and Aldi. Topics covered included marketing strategies and how they can affect the whole industry and customer habits.
What is really promising is Aldi’s commitment to be “unashamedly British” and that all their core fresh meat comes from the UK. Where possible, their fruit and vegetables are British and they are always striving to support local suppliers wherever possible. This is further backed by the Veg Pledge (an NFU initiative), as well as being the Grocer Code Adjudicators best retailer to do business with for 4 years in a row.
Aldi were very honest with our group about their successes and challenges, such as the impact on their business from the recession and how it has enabled them to grow. Following this growth, Aldi held a conference with 1000 suppliers, sharing investment plans and how they want to help suppliers grow with Aldi. David said “We are offering certainty in an uncertain world through security and transparency with longer term contracts”. Developments of their futuristic stores were shared which aim to improve the shopping experience. Aldi also want to face challenges together with suppliers, giving support when needed. Unlike other retailers with high and low promotions and the added frills of loyalty schemes, David added “Aldi always offer their customers an honest low price in a classless shopping society”. We held an interesting debate around the cost of a product not being linked to the retail price. Whilst a fair price is being paid to suppliers, the low price of products on the shelf can mislead the customer on the value of the product.
It was interesting to understand Aldi’s business model which aims to offer customers a simple range of products in each store. Why have eight different varieties of tomato ketchup when you only need one? Product ranges can quickly become large and complex and this is not always what customers really want. Aldi have seen 600% growth whilst we have seen other retailers scaling back. This growth has now lead to expansion at their head office (which is looking very impressive) and new stores opening throughout the year. Aldi talked through their store format; I had never before actually considered that the location of eggs within the store is so thought out in order to prevent them from getting squashed in the trolley by other products.
The taste sampling session went down very well with everyone, it was quite hard to fully concentrate with the selection of products cooked and laid out in front of us but we did conclude that Aldi meal solutions are delicious! Aldi have created a fantastic new fresh product: a stir fry kit which allows customers to make a quick and easy meal which is also healthy. Aldi explained that they complete weekly sampling sessions in their onsite kitchens to ensure quality and regularly benchmark against other retailers to check that this is what customers want. In addition, the products in production, supply chain and stores go through very strict quality control procedures with every pallet being assessed. Any issues are always reported back and where necessary are investigated. This system ensures that rejections are low and that customer satisfaction is always high.
There is no denying that there have been a lot of challenges for the egg sector over the previous year. Firstly, as an industry we had to try and explain to customers about Avian Influenza and then we were hit by the European Fipronil scandal. Whilst as an industry we know that British shell egg was not affected, at times this was difficult to communicate to members of the public. Therefore, it was reassuring to hear that customers trust the eggs at Aldi as sales remained unchanged throughout the turbulent period.
The group questioned the team at Aldi as to whether customers understand the various farming systems used to produce the food that they are buying. As it turned out, this was something that Aldi had also considered and were holding focus groups on. It is hoped that these focus groups would be beneficial in deciding on the future of the cage free value egg. It is reassuring to hear that customer thoughts are being considered throughout the process.
The PIP group were also lucky to have Aldi suppliers 2 Sisters Food Group and L.J. Fairburn and Son as well as Kantar Worldpanel present on the day. Andrew Gibson, Group Agricultural Manager and Alannah Murphy, Senior Commercial Manager both gave us an overview of the 2 Sisters Food Group and how the poultry supply chain operates. They talked through examples of collaboration with Aldi such as the stir fry meal solution. Sarah Louise Fairburn, Sales and Brand Director alongside Daniel Fairburn, Managing Director and Lynette Fleeting, Brand and Account Manager also dedicated time to the group explaining how the Fairburn business has grown with Aldi. It was fascinating to hear about The British Blue, a two-year project to develop a bird that lays blue eggs which are now sold in Aldi stores. This initiative really demonstrated the commitment that Aldi has with their suppliers. Throughout our discussions, the reduction of antibiotics and increased biosecurity were both key topics. Lucy Chapman from Kantar Worldpanel explained how poultry meat and eggs are continuing to increase in consumption, which we thought was great news! However, consumers are wanting less preparation time whilst still being healthy, a challenge that Aldi and suppliers are confronting face on.
In the afternoon we were invited to have a tour of the distribution centre which was a real eye opener. Aldi run such an efficient supply chain that stock is not held in warehouses for more than a couple of days, as they turn it around quickly, meaning less space is needed for storage. Little differences, such as their own lorry drivers picking stock and loading their lorries makes small cost changes which soon add up, keeping the costs of products low for customers.
In summary, the visit was an invaluable experience for the PIP group in order to understand the world of retail and to be exposed to what it takes to get sustainably produced, safe to eat poultry meat and eggs on to the supermarket shelves; it really isn’t as straightforward as you would think! We are all extremely thankful to David and Louise and their colleagues at Aldi and also to 2 Sisters Food Group, L.J. Fairburn and Son and Kantar Worldpanel for their interesting insight in to the world of retail supply chains.