Innovation

Aldi has four main international priorities, including human rights, resource efficiency, zero-carbon, and preferred employers ("Our Focus Areas"). Aldi uses their Road Map to Vision 2030 to hold its business accountable and measure the progress it is making in each of the four areas. The approach the company has for human rights is: “Using our buying power to respect human rights.” Aldi approaches this area by committing to respecting human rights and improving working conditions for all employees from storefront to supply chain and everyone in between. Aldi has committed to making a difference in this area by creating a Human Rights Policy Statement. The company also wants to address the issue not even just within their business, but they want to focus on the systemic issues that are happening all around us. Some of the frameworks the company focuses on include social standards in Aldi production, child labor, forced labor, gender equality, and living wage/income ("Roadmap to Vision 2030").

The approach Aldi makes in its Vision 2030 for zero-carbon states: “...doing our part to limit global warming.” Aldi as a corporation acknowledges that its business activities do have a significant impact on the climate and environment. The company’s goal is to reduce the ecological footprint being made by their corporate activities, by lowering their greenhouse gas emissions and innovating the products they do offer to be more environmentally friendly. As a part of taking responsibility and changing things, the company has promised this from storefront to supply chain and everything in between. The company has already taken many steps in the right direction to make changes for good. In July 2020, Aldi became one of the first international food retailers to initiate Science-Based Target Initiatives to protect our climate. Aldi aims to reduce its overall emissions by over a quarter by 2025. In correlation with this, Aldi has partnered with supply chains that share the same values. Hence, why Aldi’s also encourages its strategic suppliers, who are responsible for 75% of product-related emissions, to set goals toward science-based emission targets by 2024. With these measurements, the company hopes to reduce its carbon footprint ("Zero Carbon").

Climate change has always been a top priority for ALDI SOUTH Group and in 2014, the company adopted its first international climate change strategy. Now, more than 2,100 of 6,700 stores worldwide have been taking action to further climate change. The company has also set a goal to reduce GHG emissions by 26% by the year 2025 ("Resource Efficiency"). In the supply chain, the company encourages suppliers to set science-based targets and implement carbon reduction projects in the supply chain by the year 2024. Calculating their carbon footprint is also something the company has been doing to monitor its progress in accordance with the Greenhouse Gas Protocol. Renewable energy has also been something Aldi is trying to work towards, having increased their renewable energy consumption from 34% in 2016 to 90% in 2020! Even more than that, the company is generating electricity with photovoltaic systems on the roofs of more than 2,100 stores and 48 distribution centers worldwide ("Zero Carbon").

When it comes to resource efficiency, the company’s Vision for 2030 states, they will use resources wisely and protect the ecosystems. Aldi believes “sustainable buying practices are essential for long term success for our business.” The company wants to strive to increase transparency and make continuous improvements within the supply chain. They also want to increase the share of sustainable products available to everyday customers. Efficient logistics ensures that customers get the highest quality products for the lowest prices. Following store operations, logistics is the second highest cause of the companies Greenhouse Gases. ALDI SOUTH Group focuses on conserving fuel by optimizing trailer capacity, implementing high economical routes, and using modern vehicles. Modern refrigeration is another huge innovation this company has been using. Refrigerator systems account for a large share of the company's energy consumption. Using new, modern, and efficient refrigerating systems is key to reducing greenhouse gas emissions. In 2020, the company used less than 2,200 medium-temp refrigerators in 87% of the stores. The company aims to replace all 2,200 medium-temp refrigerators with alternative energy-saving ones by 2025 ("Resource Efficiency").

Inspiration

Aldi has been a family business since 1913, founded by two German families in the city of Essen, located in western Germany. The Albrecht family sold groceries in their small shop. Here, competition was extreme and led them to lower prices. Despite these low prices, their quality remained great. By 1955 the company had over 100 store locations. Their name, Albrecht, was later changed to Aldi’s, short for Albrecht Discount. Around 1946 they split into two groups; the Aldi Nord (Aldi North) and ​​Aldi Süd (Aldi South). The two companies have remained tied, however, they are legally and economically independent of one another. Both companies have internationalized to different parts of the world, expanding to over 20 countries. Now, they are one of the largest grocery store chains with over 2,000 locations across the 36 states in the U.S.

Since 1913, their values of commitment and teamwork have remained constant. They had turned a simple idea into a high-quality business. One of their main focuses and inspirations is their customers, which has been the forefront since the beginning. Even their employees and managers think their process is strong. Zach Salyers, the store manager at Aldi in Toledo, mentioned “Aldi is incredible. I mean we do a very good job of being super efficient. Everything in the past year or so has been really hard [given the pandemic], but Aldi does a great job.” Some of the benefits they provide for their customers are: delivering high-quality food to families, exceptional customer service, everyday, affordable and low prices, and quick and easy shopping experiences. Multiple barcodes are on each product so cashiers are able to ring items up fast and efficiently, and cashiers don’t have to spend time bagging items because Aldi believes in a no-plastic bag grocery system. The no-bag mindset furthers their sustainability outreach, “making sustainability affordable to [their] customers.” More than 40 million customers per month find the best deals and exclusive products from Aldi. They carry exclusive brand products and bring in new and improved products each week.

Aldi also has a true inspiration for the environment. Everything they do, they do with care and intention. Part of their Vision for 2030 Statement describes ways in which they intend to reduce their greenhouse gas emissions in their operations as well as their supply chain. Along with doing so, they are open to being fully transparent with their supply chain. Within their corporate responsibility strategy, their six main priorities are customers and community, zero carbon, resource efficiency, employer of choice, and human rights. Resource efficiency is important to Aldi, from tackling packaging, sourcing sustainably, and designing/producing sustainably to reducing food and operational waste. Aldi is also committed to zero-carbon functions within their stores; planting environmentally friendly refrigerant units in all of their stores is essential to their vision, as well as reducing the energy consumption and increasing renewable energy, no matter what part of the process that may be in. However, most of their emissions come from the production of products, so encouraging suppliers is a huge part of their efforts. But as a whole, Aldi leaders have truly been inspired since the beginning, and choose to remain motivated toward a better future for customers and their employees, as well as the environment.

Overall impact

The short-term and long-term effects of the plastic bag use of other grocery giants are well known. In the short term, these plastic bags do not break down as paper does. As a result, pollution, blockage of channels, rivers and streams, and landscape disfigurement are damaging the planet by the minute. The long-term effects of plastic bags are arguably worse, however. The plastic bag waste we see all the time is made worse due to the fact that plastic takes thousands of years to actually start decomposing. If other grocery giants, such as Meijer, Walmart, Kroger, etc. all start following suit, and either only offer paper bags, or no bags like Aldi, this would eliminate one of the biggest pollutants. The main impact of this innovation is that there are fewer plastic bags being used by the community. The employees are impacted because, with the lower cost to the store, they can afford to pay their employees more. The customers are impacted because with the lower cost to the store they can keep their prices for their goods lower as well. The store manager of the Aldi location we interviewed, Zach Salyers, estimated about 900-950 customers a day at their location. That is up to 346,750 customers per year that are reducing their carbon footprint by not using plastic bags. Aldi is achieving their goal of saving money and also reducing the community’s carbon footprint. People, animals, waterways, the air, and the soil will all be better off because of Aldi’s sustainability standards.

The Zero-Carbon refrigerators are also one of Aldi’s biggest contributors to their goal of sustainability. Aldi is partnered with the U.S. Environmental Protection Agency through the “GreenChill” program. The GreenChill program helps supermarkets make the shift to environmentally friendlier refrigerants, reduce harmful refrigerant emissions, and adopt greener refrigeration technologies and environmental best practices. Since receiving its first certification in 2015, Aldi has worked alongside the GreenChill Partnership to reduce refrigerant emissions to decrease its impact on the ozone layer and climate change. This partnership means Aldi stores all around the country, including in Toledo. According to Jenna Matzer, in 2018 alone, the prevention of the release of CO2 emissions was equal to those created by an average car driving across the United States 12,427 times, or burning 15.6 million pounds of coal due to their sustainable refrigeration technology (ALDI Recognized).

Aldi also partners with Feeding America, a nation-wide food bank that helps local people in need. Aldi will take any food that may be overstocked or cosmetically damaged and donate it to the Feeding America food bank. Feeding America then goes to local charities within the community and makes donations. When questioned about this, Zach said that the food bank comes to his store three times per week. That means three times a week people in need in the Toledo area are helped by Aldi’s generous donations and their commitment to zero waste and zero hunger.

Business benefit

A simple innovation such as removing plastic bags from the check out may not seem to make much of an impact, but it does more than meets the eye. First and foremost, removing plastic bags removes the cost of stocking bags. According to the Center for Biological Diversity, the average American uses 365 plastic bags per year, or 7 bags a week (10 Facts About Single-Use Plastic Bags). The Aldi store interviewed, in Toledo, Ohio on Monroe Street, reported about 900 - 950 customers per day which is about 6,300 - 6,650 customers per week. That adds up to 44,100 - 46,550 plastic bags per week. Assuming that a single plastic bag costs retailers about 3 cents each, this store would spend around $1,323 - $1,396.50 a week or $68,796 - $72,618 a year on plastic bags alone, and this is just one Aldi store.

These yearly savings allow Aldi to keep their prices down and pay their employees higher wages. The low prices attract many customers that are living within a budget and provide the community with affordable food options. The higher wages keep employees happy and treated fairly. The store also can move customers out of the store quicker because the cashier does not have to bag groceries. Customers receive their items back into their cart and then can move to a bagging area to use their reusable bags or purchased paper bags.

Social and environmental benefit

Aldi’s business plan incorporates sustainability all the time, and one of those instances is with their decision to go without providing plastic bags at checkout. Customers are allowed to bring their own reusable grocery bags with them. This is huge, because Zach, the store manager from the local Aldi we connected with, told us they have an average of 900 customers per day: “What's an average customer count per day? I would say we get about 900 to 950 people per day at our store on average.” This bag policy Aldi has placed is a win-win for customers and the environment. The lack of bags means the products Aldi offers their customers will be cheaper, as the store does not have to buy bags to supply their stores. The environment is also happy with this policy, as countless plastic bags are not being used aimlessly and dumped into landfills. Instead, they are being substituted for reusable bags or paper bags. This along with their Zero-Carbon refrigeration system, which is a sustainable solution to refrigerators and freezers within their stores, gives net-zero carbon output. During the interview, we asked if he had personally seen any sustainable innovations or implementations within higher management. He provided us with this answer, saying they are "certified with the USPC 'Green Chill' for using sustainable refrigeration throughout their stores and are an overall CO2 friendly store." With this, Aldi is setting a standard for all other grocery stores to follow.

Aldi also helps society in a way that is very personal to their local communities. In a partnership with the Feeding America Foundation, Aldi donates all the overstocked, unsellable food that is otherwise perfectly good to other local donation centers across Toledo. According to Zach, the food is not out of date, and he stresses how he never sees anything get thrown away at Aldi: “Any food that is not necessarily out of date by any means, but more so a product that maybe we overstock, or if we get a box of cereal for instance and the cereal inside is maybe crushed or it's not whole or something we would donate those items, as well as produce in the mornings that maybe isn’t up to our standards. But that doesn't mean that it's not to everyone's standards. Very rarely do you see anything get thrown away at Aldi. And the food bank comes 3 days a week.” This partnership is very important because people all around the country depend on services like Feeding America and its companies, such as Aldi, stepping up to make sure nothing goes to waste. They are helping people in their community and helping those in need.

Interview

Zach Salyers, Store Manager