As part of ESM's annual Private Label Issue, we spoke to Sarah Dreckmann, managing director, international category management, Aldi Einkauf SE & Co. oHG, and Wouter Lefevere, managing director, category management, Aldi Netherlands.This article first appeared in ESM Issue 1 2021.
As one of the largest discounter chains in the world, Aldi Nord has long sought to deliver a high quality/price ratio with its private-label offering.
The group, which operates the Aldi banner in several European markets, such as the Netherlands, France, Spain, Denmark and Portugal, as well as northern Germany, recently announced the opening of its 5,000th outlet, on the Spanish island of Majorca.
Consumer Habits
While the past year has presented plenty of changes for both retailers and their customers, Sarah Dreckmann, managing director, international category management, Aldi Einkauf SE & Co. oHG, believes that many of the fundamentals remain the same.
“Consumers long for security,” Dreckmann tells ESM. “For Aldi Nord, there is hardly any way we can create more trust than with our own brands, which we constantly improve and monitor the quality of. Furthermore, in some parts of our group, the financial situation of consumers has changed, so they have to pay more attention to price.”
In the Netherlands, for example, unemployment has only slightly increased, meaning that the majority of shoppers still have an ample shopping budget, but their habits have changed.
“During the pandemic, consumers tended to limit their shopping trips and preferred full-service supermarkets or online channels, resulting in a stronger growth for A-brands,” says Wouter Lefevere, managing director, category management, Aldi Netherlands. “However, our own brands benefitted from the home-cooking trend, where consumers started to discover new products, especially in the fresh categories, baking products, coffee, and non-alcoholic beverages.”
Innovation Drive
According to Dreckmann, Aldi Nord’s aspiration is to “become a little better every day”, which has led the group to enhance its position in line with trends that are “increasingly important” to its customers, including organic, vegan, regional and sustainable trends.
While the retailer largely operates in the bricks-and-mortar channel – “Our dense store network is one of our biggest assets in fulfilling Aldi’s mission: providing people with what they need for their daily lives, as simply and swiftly as possible,” says Lefevere – the retailer has also made inroads into e-commerce in selected markets.
“Aldi Spain and Aldi Portugal have just started collaborations with the delivery app Glovo, for last-mile delivery,” says Dreckmann. “In addition, Aldi Nord Germany has operated an online business for selected non-food products since 2019. The substantial decisive criterion is that customers’ demands come first.”
Key Role
Both Dreckmann and Lefevere agree that private label is a central pillar of Aldi’s brand identity, and this has enabled the business to adapt to changing consumer demands.
“Because 80% of our products are our own, we can strongly influence the specifications of most of our products to match our customers’ needs,” says Dreckmann. “Let’s consider the increasing demand for healthy products: since 2014, we screen each recipe for opportunities to reduce salt and sugar content. Also, in March, Aldi Nord Germany began to indicate the NutriScore on several own-brands, making it easier for customers to recognise the nutrient composition of a product at first glance.”
Looking Ahead
As for the future of the own-brand sector, Lefevere believes that consumption patterns and shopping habits will continue to evolve at an increasingly rapid pace.
“Through our own brands, we have the opportunity to adapt quickly to customers’ needs, such as by targeting special needs, such as healthy and sustainable products, at the lowest-possible price,” he says.
Private label will increasingly need to stand on its own two feet, Dreckmann adds, and evolve from being just a mirror image of mainstream brands.
“Own-brands will not be copies of A-brands any more,” she says. “The future approach in addressing our customers is to focus on their need states as the central purchase motivator. Product design will also play an important role, and, finally, some Aldi own-brands became real cult classics, so we will continue to create new ones.” [Picture by Bjoern Wylezich/123rf.com]
© 2021 European Supermarket Magazine. Article by Stephen Wynne-Jones. For more Private Label news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.
