ALDI doesn’t commit to a ‘direct-from-farm’ supply model

ALDI has refused to confirm or deny rumours that it has plans to set up a distribution network for fresh produce.

Reports emerged last week that ALDI is planning to transport fresh fruit and vegetables directly from Australian farms to its stores.

In a statement, an ALDI spokesperson said the company continues to investigate opportunities which would provide the freshest fruit and vegetables.

“We know that a direct-from-farm supply model provides efficiencies for our suppliers and value for our customers. As such, ALDI will continue to explore a variety of supply chain models to ensure we provide a market-leading offering when it comes to fresh produce,” and ALDI spokesperson said.

A ‘direct-from-farm’ supply model would still include ALDI’s distribution centre.


Move over Aldi, Lidl may be next for Australian market

If speculation that German discount supermarket, Lidl, is preparing to launch into the Australian market is correct, it will be the biggest shake up in the grocery sector since Aldi’s arrival in 2001.

With potentially five viable combatants in the mix, the way we shop and how supermarkets and suppliers compete, will fundamentally change.

It’s not a matter if, but when

While Lidl has stated it has “no current plans”, it recently trademarked 500 brand names in Australia, including its own, and there have been media reports of it investigating logistics and distribution options.

It has just confirmed its long vaunted expansion into the United States.

Woolworths’ chief executive Grant O’Brien has sought to allay investor concerns about the impact of Lidl by pointing out it would take time for another grocer to gain traction and scale in the market – but with Aldi having laid down the foundations, market penetration and expansion will happen a lot quicker.

But it’s important not to understate the enthusiasm Australian shoppers have shown for the discounter model and more importantly, private label products. It is likely that private label product manufacturers would enthusiastically want to work with Lidl. Where once the option was to deal with either the big two or Metcash’s IGA stores, suppliers now have opportunities with Aldi and potentially Lidl. Lidl’s entry could provide a fundamental shift in power from the big supermarkets to suppliers.

Should the supermarkets be a Lidl worried?

The Schwarz Group, owners of Lidl, are the fourth largest retailer in the world, operating across more than 26 counties and generating more than US$100 billion in sales every year – substantially more than Australia’s Coles and Woolworths put together.

With more than 60% of revenues coming from its international operations, Lidl has both scale and foreign market entry know-how on its side. Lidl’s stores are larger than an Aldi site and while predominantly carrying private label products, they offer a fixed ranged of appliances, general merchandise, apparel and brand name products. All at very low prices.

Across Europe and the United Kingdom, discounters like Aldi, Lidl and Netto have carved out a strong market position and attained shopper loyalty. In Britain, the Lidl brand was considered more likable than Twitter, by young people, aged 18 to 24 years. We should expect to see the same market shift here in Australia.

If the experience of UK brands such as Sainsbury’s and Tesco are a guide, Coles and Woolworths should expect to lose market share. But it is independent grocers that would be would the worst hit. As the grocery market polarises, with full-line supermarkets at one end and discounters at the other, being stuck in the middle is not the place you want to be.

It appears that Metcash’s IGAs are already experiencing this shift.

What might this mean for shoppers?

Shoppers are visiting supermarkets more frequently than ever before, with most seeking “good value” and “low prices”. In any given week, customers shop across several brands and are no longer loyal to one.

With grocery prices in decline since the “supermarket wars” began, it goes without saying that shoppers will be winners.

Strategically, it is not uncommon for global firms to keep their market expansion and entry plans to themselves, rather than letting the incumbents know their planned locations and who their proposed suppliers may be, as global food retailers greatly rely on local supply and third party logistics providers.

The current leaks surrounding trademarking activity and alleged discussions with suppliers and logistic providers would not be sitting well with Lidl, and this may hasten their entry plans, before competitors can lock up key locations and suppliers.

Aldi raised such concerns against both supermarkets in its submission to the 2008 ACCC inquiry into the competitiveness of retail prices for standard groceries.

In a move possibly indicating the big supermarkets want to lock in supply before Lidl arrives, Woolworths has been attempting to negotiate to extend supplier contracts from 18 months to between three to five years.

The future

While it will be tempting to compete on price, trying to beat these global discounters at the own game is fraught with danger. Such at strategy hasn’t worked elsewhere. In the UK and (specifically Holland), the impact of a prolonged price war has lead to eroded margins, and led to loss of market share and closures.

Woolworths and Coles should focus on what the discounters don’t offer, rather than compete on what they do best. IGAs appear the most exposed with the current business model not allowing operators to compete on range or price; accordingly we should expect to see structural change here.

With Aldi’s expansion into Western Australia and South Australia, and potentially Lidl’s entry, shoppers and suppliers will be the winners at the end of the day. As the market, once concentrated around the “big two” starts to distribute proportionately across all five players, shoppers will see lower prices, and suppliers, a greater choice of trading partners.

The Conversation

Gary Mortimer is Senior Lecturer, QUT Business School at Queensland University of Technology.

This article was originally published on The Conversation. Read the original article.

Grocery Code prompts a new kind of supermarket war

ALDI has become the first to sign the Grocery Code, less than a week after Woolworths claimed it would be the first to put pen to paper.

ALDI says it will transition existing suppliers to the new terms of the Grocery Code by 3 August 2015 and new suppliers will agree to the new terms from 15 June 2015.

A spokesperson from Woolworths says the supermarket “has recently written to both Minister Billson and ACCC Chair Rod Simms indicating that, assuming the Code clears the Senate, we will sign the Code on July 1.”

According to the Grocery Code, after a wholesaler signs the Code, it has 18 months to offer its suppliers in writing to vary their agreement so that it conforms to the requirements of the Code.

If the supplier concerned accepts the offer, the wholesaler then has six months to vary the agreement.

So ALDI’s suppliers will see the changes by 3 August at the latest, the Code allows Woolworths up to two years to vary its supplier’s agreements.

In today’s announcement, an ALDI spokesperson said “We have always supported the concept of a strong and sustainable Australian grocery industry for retailers and suppliers. ALDI’s commitment to opt in to and implement the Code before any other major supermarket is testament to our business values and dedication to quality supplier relationships.”

ALDI said the spirit of the Code reflects its current practice with suppliers: forging long term, sustainable relationships and working in partnership to provide Australian shoppers with high-quality products at permanently low prices.

The voluntary code prohibits specific types of unfair conduct by retailers and wholesalers in their dealings with suppliers and provides a clearer framework for these dealings.

Currently, The Code has been tabled in Parliament as a regulation under the Competition and Consumer Act 2010.


Behind the scenes with ALDI Liquor: Q&A

ALDI Australia's Buying Director, Jason Bowyer, had a chat with Food Magazine to discuss how ALDI sources its wine, what they look for in a supplier and its growth into online liquor.

How do you go about sourcing wines for ALDI?

We partner with a number of high calibre Australian and international suppliers who share our passion for quality and help cater to our expanding range of products. We are committed to tasting and sampling every product that is presented to us, as often that is how you discover the hidden gems. 

We constantly benchmark our products against the market to ensure we are reflecting market trends and meeting or exceeding the quality of the market leading brands.

As a buyer for ALDI, what do you look for in a wine?

We are consistently looking at market trends and innovations to ensure our products are in line with consumer demand and preference, and we are committed to ensuring that our wine products offer high value at their respective price points. As our results in past International and National Wine Shows have demonstrated, affordably priced wine can perform well above the expectation a customer may have, sometimes proving more popular than a much more expensive option. 

Our product range is planned well in advance of key events throughout the year. For winter in 2015, we introduced the following new wines: Neve Marlborough Pinot Noir 2013, unbelievable Pinot Noir value; Qiwila Maule Valley Merlot 2013 from Chile and Peidra Negra Reserve Malbec 2012, both seriously great value reds from South America; and a Taylors Special Release Clare Valley Shiraz 2013. The Taylors wine was specifically blended and produced for ALDI.

How are you able to source high quality wines but keep them at reasonably low price points?

Firstly, we have strong partnerships with high quality Australian and international award winning wineries. Our wines are made to our specifications, and quality isn’t something that we compromise on. Overall, we are committed to tasting and sampling every wine product that is presented to us, which is often how we are able to discover the hidden gems. Our product specifications are benchmarked against market leading wine brands, and we pride ourselves on delivering high standards in line with our customers’ tastes. A $10 wine at ALDI should drink like a $20 – $25 wine from elsewhere, and we are constantly trying to deliver on this formula.

We do not compromise on quality and make it our mission every day to consistently improve the value offering. Our everyday low price model means that price promotions are not something we generally use; instead we will always strive to offer customers the best quality products at a great everyday price.

In terms of surplus and distressed stock, we do try to assist suppliers here, however the wine must be great value and something that represents equally great value to our customer.

Does ALDI own any vineyards?

No, ALDI does not own any vineyards, however we work with closely with our wineries and partner with them for the long term. This often involves the contracting of high quality vineyards and sites to ensure the highest standards are achieved.

Are there any particular varietals that you are finding particularly popular within the Australian market aside from the typical Sauvignon Blanc and Shiraz?

ALDI’s customers’ tastes are steadily evolving when it comes to wine. The sweet spot has increased to a higher price point than when the business first launched liquor. 

A couple of wines to look out for are our the Corte Carista Prosecco DOC ($9.99) from northern Italy, the Loire Valley Sauvignon Blanc 2013 ($7.99), a crisp white with strong gooseberry and passionfruit flavours  from the home of Sauvignon Blanc, and the Blackstone Paddock Margaret River Cabernet Sauvignon 2013 ($19.99), a full-bodied red with plum, blackcurrant and truffle undertones.

One wine that stops others in their tracks, is the El Toro Macho Tempranillo 2013 ($4.99). It is great value and a wine style well suited to Australian palates. 

What are the plans for the future in terms of ALDI’s wine offering? Would ALDI ever consider opening a separate liquor store?

ALDI Liquor is dynamic and adapts to match the changing tastes and preferences of customers. Trends are important, as is the speed at which suppliers communicate their new innovations. We partner with a number of high calibre Australian and international suppliers who share our passion for quality and help cater to our expanding range of products. In 2015, you will see continuing growth in the online liquor side of the business,, which provides a convenient online store for Australian consumers. As wine is both heavy and fragile, the convenience of home delivery is often popular. 

Have you seen a notable uptake on sales since ALDI wines have won numerous awards international wine competitions in recent times?

Our sales have been growing strongly since our launch into NSW, however it is fair to say that award wins do influence sales performance and public perception regarding quality of wine. Interestingly, over and above this is the customers love for great value and quality, so sharing these wine finds is stimulating strong sales further. 


Woolworths moves towards zero food waste

The man who forced French supermarkets to donate unwanted food wants to take the law global, but it may not be necessary in Australia.

France’s “zero-tolerance” law banning supermarkets from destroying unsold food and forcing them to donate it to charity has ignited the food-waste discussion in Australia.

“We need to look at what has occurred in France to try to address this inequity and waste,” said RMIT’s Dianne McGrath.

McGrath is conducting Australia’s first national survey Watch My Waste to measure food waste in the hospitality sector and says the average Australian household throws out about 20 per cent of the food they buy from supermarkets, greengrocers and other stores.

“[This] is equivalent to one in every five bags of groceries or $1,036 per household annually,” McGrath said.

“While a number of supermarkets donate small amounts of still consumable food to food rescue organisations such as FareShare, Foodbank, OzHarvest, and SecondBite to help feed the hungry, too much perfectly good food is thrown in supermarket dumpsters every day.”

But Woolworths and ALDI are already working to reduce food wastage.

Woolworths has a policy of moving to zero food waste to landfill by the end of this year.

“We work with various food charities around Australia (including Foodbank, Ozharvest) to provide food to those in need,” a Woolworths spokesperson said.

“Where food cannot be used by those charities, we have a number of options including use as fertilizer and as animal feed including partnerships with some zoos. We have other smaller scale projects including electricity production.

“We also try to ensure our purchasing from farms does not create excess waste. We buy just enough to ensure we have stock for our customers while having the minimum possible left over. We are working with farmers to use more of their crop through our "Odd Bunch" produce lines. These are fruit and vegetables that might not be perfect looking but are still great to eat. We offer these at a substantial discount to our customers.”

Similarly, ALDI Australia said it’s committed to minimising food wastage.

“We have a number of processes and policies in place to ensure that very little food sold on our shelves ends up as waste,” an ALDI spokesperson said.

“On a national level, ALDI donates food no longer suitable for sale but within its use-by date to Foodbank and OzHarvest, helping to provide quality meals for people in need. In 2014 we donated 990,688 kilograms of food to OzHarvest, which equates to 2,972,064 meals. Donated food includes, fresh fruit, vegetables, dairy, raw meat, drinks, desserts, pastries and dry goods.

“Over the past five years, we have donated 369,177 kilograms of food to Foodbank, the equivalent of 492,236 meals.

“As well as our national partnerships, we also donate to local community groups where an ALDI is present.”


Is Aldi’s move to woo cashed-up shoppers a risk?

While Aldi’s launch of their new “trial” stores may seem to be an attempt to capture middle income shoppers, it may end in disaster.

Aldi’s four new trial stores located in Queensland, NSW, ACT and Victoria, will offer improved lighting, larger layouts and an expanded offering of fresh food including extending produce ranges, in-house bakeries and premium brands.

Employing Nielsen’s 2014 Homescan Report, Aldi have determined that only 30% of their customers were now considered “low-income shoppers”. Some 34.4% were from middle-income households and the remaining 35.6% now had household incomes greater than AUD$90,000 a year – a segment which has grown by 6.7% since 2011.

So this probably the reason for Aldi’s foray into new stores and ranges. However, such a move is considered risky.

The Aldi blueprint for success

From its humble beginning in Germany in 1946, Aldi has grown to be the 8th largest food retailer in the world, by maintaining a consistent business model across the globe. Their core business strength has been formed by offering shoppers a narrow range of very low-priced, good quality, private label grocery products, from small stand-alone sites.

Aldi’s 1350 or so products pale in comparison to Coles and Woolworths broad and deep product ranges. Yet this provides them with lower supply chain costs and great efficiencies. Its 700 square metre stores are dwarfed by its competitors' 5,000sq m plus footprints, yet this gives them the ability to occupy smaller suburban and high street location. This has been an intentional strategy that allows them to get through council restrictions quickly and enables the flexibility to open in areas that larges supermarkets can’t access.

Since opening their first store in Australia in 2001, Aldi has captured nearly 9% market share, with 11% on the eastern seaboard where the majority of its stores are located.

Aldi has now grown to be the third largest food retailer in Australia. With plans to open in South Australia and Western Australia in the coming years, experts suggest Aldi current sales will double by 2019.

Its growth since 2001 has come at the cost of Metcash’s IGA supermarkets but has also impacted on Coles and Woolworths.

Aldi’s entry into the Australian market in 2001 was timely in that they arrived just as shoppers' hunger for private label was growing and as Franklins No Frills was exiting the market. As a consequence, Aldi filled the gap left behind by Franklins and won over shoppers with their low price, good quality private label range.

So a move away from what you are very good at, seems very risky. From a purely strategic position, if your competitive advantage is selling high volume, low priced, private label food products, stick to it. Offering more range, premium products, in-store bakeries and extended fresh food offers only dilutes your market position.

Franklin’s failures

Very much like Aldi today, Franklins was Australia’s first low-cost grocer,with a narrow range of very low priced, generic grocery products. The concept of selecting your own no-named products, out of open cartons on shelves, packing them yourself into cardboard boxes (no bags were provided) was quite foreign to Australian shoppers. However, Franklin’s market position differentiation worked in its favour.

Buoyed by the success of the No Frills stores, Franklins broadened its offer by opening a variety of new store platforms designed to tap into the convenience market (Franklin’s Mini-Fresh) and supermarkets (Franklins Mega-fresh and Franklins Supermarkets).

But this proved a fundamental error. Moving away from their core business and target market added internal costs and put them in direct competition with Metcash’s IGA and the two major supermarkets.

Private label strategies only works one way

Although criticised for allegedly limiting choice and removing popular national brands, Australian shoppers have accepted private label food products wholeheartedly, now accounting for 21% of packaged grocery sales in Australia.

The popularity of Aldi’s private label has been a particular source of its success, causing both Coles and Woolworths to quickly expand their original plain packaged, generic product ranges.

Both Coles and Woolworths launched a three tiered, “good, better, best” private label strategy that included plain packaged, generic products, as well as Woolworth and Coles brands and premium Select and Finest ranges.

What this demonstrates is that Coles and Woolworths have the ability to move “down market” by providing a range of low priced, private label products.

Unfortunately, Aldi is not so well placed to move “up market” into the mainstream food retailing market by providing extended fresh offers or premium ranges.

Current 700sqm store layouts do not provide space for extended fresh produce displays, in-store bakeries or more checkouts. Such a move would require a variety of store types be developed. As the majority of Aldi’s products are bulk displayed on pallets, adding new ranges may require shelving and other display fixtures; increasing capital expenditure. Increasing product ranges ultimately adds to your supplier base and limits supply chain efficiency.

Should Aldi stick to what they are good at?

The short answer is yes.

Attempting to capture a greater slice of the middle and high income shopper by offering bigger brighter stores, broader ranges, premium products and an extended fresh offer, may lessen their value proposition. It blurs the lines between Aldi and mainstream supermarkets.

There are three main risks. First, potentially Aldi’s proportion of shoppers in five years becomes 40% high income, 45% middle income and 15% low income – therefore excluding its original target market.

Second, Aldi ends up offering exactly what Coles and Woolworths currently offer (so there is no differentiation).

Third, Aldi opens the door to other low cost food retailers (Lidl walk in and pick up the ‘low income’ market you left behind to chase a bigger slice of the middle/high income market).

While 64% of shoppers already shop at more than one supermarket brand each week, Aldi may find this move will cannibalise their own sales and isolate their core customer.

While the “numbers” suggest more and more middle and high incomes shoppers are patronising Aldi, it would appear they are shopping there to access Aldi’s current range of good quality, low priced products. Ultimately, it is Aldi’s “difference” that attracts shoppers, not their “similarity” with others.

The Conversation

Gary Mortimer is Senior Lecturer, QUT Business School at Queensland University of Technology.

This article was originally published on The Conversation. Read the original article.


Australian wine second to France in International Wine Challenge

Australia has picked up a mighty haul of medals at International Wine Challenge 2015, including 91 Gold medals.

Second only to France on the medal leader board, Australian wine makers have claimed a total of 825 medals at the 2015 International Wine Challenge. 91 Australian wines were awarded Gold medals, as well as 333 Silver medals and 401 Bronze medals.

Charles Metcalfe, Co-Chairman of the IWC said “Australian wine continues to go from strength to strength, as its native winemakers demonstrate their star quality. Australian Shiraz has impressed yet again, and Aussie Chardonnay really has come a long way. I am convinced any of our award-winning, modern, less oaky Chardonnays would convert any Chardonnay deriders.

“We discovered some delicious examples of more classic grapes like Semillon and Riesling, and even some top quality sweet and fortified wines. Overall, it has been a vintage year for Australia at the IWC.”

And the winners are…

Australian Shiraz leads the Gold medal charge. 25 wines picked up Gold medals, 22 from South Australia. Angove Family Winemakers picked up a pair of Gold medals for its Family Crest Shiraz 2013 and its Warboys Vineyard Shiraz 2013. Saltram Wine Estate and Château Tanunda also received two Gold medals each for their Shiraz entries.

Outside South Australia, Lerida Estate struck Gold with its Lake Geoge Shiraz Viognier 2013, the only Gold medal winning Shiraz to be produced in the Canberra District. Amelia Park Wines, located in Dunsborough, West Australia, also picked up a pair of Gold medals for its Amelia Park Reserve Shiraz 2012 and its Amelia Park Shiraz 2013.

16 Australian Chardonnays impressed the IWC judges and picked up Gold medals.

Penfolds Wines Pty Ltd received a shower of Gold medals, including four for its Chardonnay entries. Penfolds won Gold for the following:

  • Penfolds Reserve Bin 12A Chardonnay 2012
  • Penfolds Reserve Bin 10A Chardonnay 2010
  • Penfolds Reserve Bin 09A Chardonnay 2009
  • Penfolds Yattarna Chardonnay 2010
  • Penfolds Bin 389 Cabernet Shiraz 2012
  • Penfolds Bin 707 Cabernet Sauvignon 2012

NV Penfolds Grandfather Rare Tawny also picked up a Gold medal in the fortified category.

Brookland Valley received three Gold medals for its young Chardonnays. Its Estate Chardonnay 2013, Estate Chardonnay 2014 and its Reserve Chardonnay 2013 all scooped the top medal prize.

Tasmania winery Jansz received Gold medals for two of its sparkling Chardonnay/Pinot Noir blends. Jansz Tasmania Premium Cuvée Brut NV and the Jansz Tasmania Vintage Cuvée 2009 both impressed the judges and were awarded Gold.

De Bortoli Wines Pty Ltd received five Gold medals, four of which were awarded to sweet wines. Its Black Noble 10 Year Old NV, De Bortoli Show Liqueur Muscat NV and its Deen Vat Series No 5 Botrytis Semillon 2009 all struck Gold.

De Bortoli created Gold medal-winning Tesco finest Dessert Semillon 2009 which was one of a flurry of medals which went to Australian wines created for UK supermarket own-brand ranges. Tesco finest Denman Semillon 2013, Tesco finest Cobblestone Shiraz 2012 and Tesco finest Tingleup Riesling 2012 were all awarded Silver medals.

Aldi The Exquisite Clare Valley Riesling 2014 was awarded a Gold medal, and Aldi The Exquisite Collection Limestone Coast Chardonnay 2013 received a Silver medal. These are both produced by Wakefield.

Four wines created by a range of Australian wineries for IWC Supermarket of the Year 2014 Marks & Spencer also received Silver medals, namely Marks & Spencer Ebenezer & Seppeltsfield Shiraz 2012, Margaret River Semillon/Sauvignon 2014, Marks & Spencer Hunter Valley Chardonnay 2014 and Marks & Spencer Burra Brook Chardonnay 2014.

Winemakers’ Selection by Sainsbury’s Limestone Coast Chardonnay 2013 created for the UK retailer by Kingston Estate Wines also picked up a Silver medal.

Australian Vintage Ltd received a flurry of fourteen Gold medals across a variety of styles. Seven Semillons made by the winery picked up Gold medals, including two for its McGuigan Bin 9000 Semillon 2003 and 2005 vintage. However, the winery proved it is not only a master of aged Semillon, striking Gold with the 2014 McGuigan The Shortlist Semillon. 2004. The 2007 and 2013 vintages of McGuigan The Shortlist Riesling also secured Gold medals.

Visit the IWC website for the full list of winners.


$21 mill of cocaine delivered to ALDI in banana boxes

In Berlin, over $21 million worth of cocaine has been found in boxes of bananas delivered to ALDI supermarkets, police say.

According to The Sydney Morning Herald, staff working at 14 of the discount supermarkets in and around Berlin reported the stashes of narcotics tucked in the produce deliveries from Colombia, which police believe ended up at the stores by accident on Monday.

"Apparently there was a logistical mistake somewhere along the line," police spokesman Stefan Redlich told AFP, adding that investigators were now trying to determine their intended destination.

He said the 386kg shipment was the biggest single cocaine find in the history of the German capital.

But it’s not the first time. In January, over $7 million worth of cocaine was discovered by staff, wrapped up between bananas as they unpacked the fruit.


Maggots and foreign objects found in Aldi food

A string of Melbourne shoppers have reported finding foreign objects in food bought from Aldi.

Last week, a Richmond couple found a maggot in a jar of Remano tomato paste, which they bought from an Aldi store in Abbotsford, The Age reports.

Since then other Aldi customers have contacted Fairfax Media claiming to have found foreign objects and creatures in food bought from the cut-price supermarket chain.

One customer, who asked to be known only as Michelle, opened a Mozart Chocolate late last year to find live maggots inside.

"I opened the wrapper and there was a maggot crawling out of the chocolate," Michelle said.

The chocolates were sold by Aldi around Christmas, for a third of the cost at which they usually retail at department stores.

Another customer, who asked not to be named, said he opened a tin of Ocean Rise smoked mussels bought from Aldi to find what appeared to be the leg of a starfish inside.

The customer said he lodged a formal complaint with Aldi, but was disappointed by their response.

"All they offered was a 'sorry' and promised they would instruct the operators on the difference," he said.

Tania Ewing said her daughter found a fingernail in a tub of salted caramel ice cream bought from an Aldi store in Brunswick last October.

"It took us three months to get any response from Aldi," Ewing said.

Another woman, who asked to be known only as Jan, said she found a piece of metal in the bottom of a jar of Bramwells peanut butter that she bought from an Aldi store in Melbourne's south-east.

"It looked like the tip of a knife, but all my knives are intact. I suspect it was something in the manufacturing equipment that broke off," she said.

Jan took her complaint to Consumer Affairs Victoria, which referred her to Casey City Council. But she was told by council investigators that the matter could be better dealt with by NSW health authorities.

"I have heard nothing more," she said.

An Aldi spokesman said the supermarket had investigated the issues raised by its Melbourne customers, but found the problems were not widespread.

"For the incidents mentioned, there has not been an illustration of any trends and customers that have been in contact with Aldi have been responded to," the spokesman said.

"Any complaints are raised individually and investigated with extremely high importance. Aldi will always remove any product from sale if it is identified as a risk to our customers."

The spokesman said the supermarket was investigating last week's discovery of the maggot in the jar of Remano tomato paste. He said the jar had been collected from customers Adrian Chew and his partner Stephanie on Saturday, and was in transit to the supplier for testing.

"Aldi has been investigating the issue thoroughly with the supplier and we will implement any further action if required," the spokesman said.


Aldi’s growth poses a threat to Woolworths and Coles, Moody says

While Aldi’s expansion has so far come at the expense of independent retailers, ratings agency Moody says it is also a long term threat to Woolworths and Coles.

Moody says Aldi's growing presence could lead to lower profit margins as the major chains try to defend market share, The Sydney Morning Herald reports.

Aldi's increasing acceptance by Australian consumers and its "aggressive" growth plans would ultimately challenge the duopoly structure in the $88 billion grocery market, Moody's said in a report overnight.

"In such an environment and based on international experience with the growth of discounters, we expect the market shares and margins of Woolworths and Coles to come under pressure over time," said Moody's vice president and senior analyst, Ian Chitterer.

Pointing to the impact of Aldi and fellow discounter Lidl in the UK, Chitterer said margins at Woolworths and Coles were likely to rebase as they cut prices and invested in stores to protect their dominant market share.

In February, Aldi Australia was named Supermarket of the Year 2014 at the Roy Morgan Research Customer Satisfaction Awards Night, for the third time since 2011.

Aldi opened its first store in Australia in 2001 and, according to research firm Nielsen, now has 8 per cent of the total grocery market and 11 per cent of the east coast market. It plans to open more than 100 stores in South Australia and Western Australia over the next few years.

In January, Aldi Australia said it will not budge on its business model and vowed to maintain pricing pressure on rivals.

The discounter increased sales by 13 per cent in 2014, outpacing food and liquor sales growth at Coles and Woolworths almost three-fold.

Aldi Australia's sales reached $6 billion in the 12 months ending December 2014, compared with $5.3 billion in 2013. The growth was underpinned by strong same-store sales growth and 25 new stores.

In comparison, Woolworths' Australian food and liquor sales grew 4.7 per cent to $41.7 billion in fiscal 2014 and Coles' food and liquor sales rose 4.6 per cent to $29.2 billion.


ALDI Australia named Supermarket of the Year

ALDI Australia has been named Supermarket of the Year 2014 at the Roy Morgan Research Customer Satisfaction Awards Night.

This is the third time ALDI has been awarded Supermarket of the Year by Roy Morgan Research since 2011, the inaugural year of the Customer Satisfaction Awards.

“We are thrilled to be awarded the title of Supermarket of the Year in the Roy Morgan Research Customer Satisfaction Awards 2014. It is true testament to ALDI’s values and our commitment to deliver Australians the best possible supermarket experience”, said Oliver Bongardt, ALDI Managing Director Buying.

“Everything we do is designed with one goal in mind – to enable Australian shoppers to live richer lives for less. Making sure our customers are satisfied with their experience at ALDI is a big part of this, which is why we offer permanently low prices, an award winning product range and a quality in-store experience.”

“As we enter our 15th year, we haven’t lost sight of that focus. We strive for quality throughout our business; in our people, our products, our processes and our stores. We will continue to listen to our customers, look for ways to improve and bring new innovation to the marketplace,” Bongardt said.

Roy Morgan Research CEO, Michele Levine said “In today’s environment, where social and mainstream media is quick to name and shame half-hearted (and worse) service, it is vital that excellence is also publicly recognised and celebrated. The Roy Morgan Customer Satisfaction Awards do just that — with the best and brightest of 2014. ALDI’s continued commitment to customer satisfaction is commendable and we are thrilled to award them Supermarket of the Year 2014.”

The annual Customer Satisfaction Awards are based on 12 months of data from Roy Morgan’s Consumer Single Source survey, as well as Roy Morgan’s Business Single Source survey.


Aldi to maintain its lowest-price, niche retailer market position

Aldi will not budge on its business model of offering of high-quality products at the lowest price, said Aldi group managing director Tom Daunt.

“At the core of our business model is the need to offer the highest-quality product at the lowest price. It's a very dangerous territory to get into for a discounter to allow others to encroach on that area and that's certainly not part of our plan,” Daunt told The Sydney Morning Herald.

“We will always select the lowest price we're able to afford to sell the product at, which is very different to the standard retail convention, which is to price products at the highest you're able to get away with.”

But Daunt played down speculation that Aldi's sales could double or triple in the foreseeable future, saying "it's not going to happen".

"Despite our success over 14 years we do remain somewhat of a niche retailer, with a limited range of very high-quality products sold at heavily discounted prices. The niche nature of our business model won't change into the future, even though Aldi has added more national brands to its private label range and is expanding its fresh offer," he said.

"We're a company that's not focused on year-by-year sales growth and we're not focused on market share. What we are focused on is investing in Australia over a long period of time to produce a sustainable, successful operation."

Aldi Australia has vowed to maintain pricing pressure on rivals in the $85 billion grocery market, after increasing sales by 13 per cent in 2014, outpacing food and liquor sales growth at Coles and Woolworths almost three-fold.

Aldi Australia's sales reached $6 billion in the 12 months ending December 2014, compared with $5.3 billion in 2013. The growth was underpinned by strong same-store sales growth and 25 new stores.

In comparison, Woolworths' Australian food and liquor sales grew 4.7 per cent to $41.7 billion in fiscal 2014 and Coles' food and liquor sales rose 4.6 per cent to $29.2 billion.


Aldi’s $5 wine recognised at Sydney International Wine Show

The 34th Sydney International Wine Show proved that quality isn’t always reflected in the price tag with two Aldi wines retailing for under $10 punching well above their weight.

Aldi’s $4.99 Spanish Tempranillo, El Toro Macho and a $6.99 Cabernet Sauvignon, The Pond, from South East Australia were recognised by judges as consumer-friendly, quality dining wines.

In addition, the Aldi Tudor Central Victorian Shiraz 2013 (retailing for $12.99) won two trophies – the Mark De Havilland Memorial Trophy for Best Red Table Wine of Competition, and the Sydney International Wine Competition Perpetual Trophy For Best Lighter Bodied Dry Red Table Wine of Competition.

The ALDI Veuve Monsigny Champagne Premier Cru (retailing for $29.99) also rose above some stiff competition taking out the Lanson International Diffusion Perpetual Trophy for Best Sparkling Wine of Competition.

The 2015 Sydney International Wine Competition was judged by a panel of 14 international and Australian judges, with the final selection of wines judged alongside appropriate food dishes to ensure that the results reflected the way most consumers drink wine – with food. 

New Zealand Sauvignon Blanc and Pinot Noir wines dominated their classes, with Marlborough’s St Clair Winery winning four trophies for its Sauvignon Blanc, semi-sweet Riesling, Shiraz and, as joint winner of the ‘Most Successful Winery of Competition’ trophy.

However, the NSW South Coast’s Coolangatta Estate produced the most decorated wine of this year’s competition with three trophies for its Estate Grown Semillon 2006, including the Joy Lake Memorial Championship Perpetual Trophy for Best Wine of Competition.

Riesling and Semillon wines were the stars of the Show, winning eight out of the 23 Trophies awarded, while cooler climate white wines from southern NSW and south-west of Western Australia also had a major impact in the white wine categories.

“Judging the wines that made it to the final rounds with food made a significant difference to the award winning wines because they are not just judged for technical correctness – that was done in the first phase – they are judged again for their harmony and balance, key to their ability to complement appropriate food dishes,” said Convenor of the Sydney International Wine Competition, Warren Mason.

The 2000 wines entered into the competition came from ten countries, predominantly from Australia and New Zealand, but also Italy, France, Spain, Portugal and USA, as well as emerging wine producing nations such as China, and Thailand.


Lanson International Diffusion Perpetual Trophy for Best Sparkling Wine of Competition


SIWC Perpetual Trophy for Best Australian Sparkling Wine – Aperitif Style


John Ryan Memorial Perpetual Trophy for Best Aromatic Wine of Competition


SIWC Perpetual Trophy for Best Semi Sweet White  Wine of Competition


Ernie Hunter Memorial Trophy for Best Lighter Bodied Dry White Table Wine of Competition


Schenker Australia Pty Ltd Perpetual Trophy for Best Medium Bodied Dry White Table Wine of Competition


SIWC Perpetual Trophy for Best Fuller Bodied Dry White Table Wine of Competition


SIWC Perpetual Trophy for Best Still Rose Wine of Competition


J F Hillebrand (New Zealand) Ltd Perpetual Trophy for Best Pinot Noir of Competition


SIWC Perpetual Trophy for Best Lighter Bodied Dry Red Table Wine of Competition


The Fesq & Company Perpetual Trophy for Best Medium Bodied Dry Red Table Wine of Competition


Kemeny’s Perpetual Trophy for Best Fuller Bodied Dry Red Table Wine of Competition


Myra Lehmann Perpetual Trophy for Best Dessert Wine (Unfortified) of Competition


SIWC Perpetual Trophy for Best Sparkling Red Wine of Competition


R L Buller & Son Perpetual Trophy for Best Fortified Wine of Competition



Kemenys Perpetual Trophy for Best Value Dry White Table Wine of Competition


Kemenys Perpetual Trophy for Best Value Dry Red Table Wine of Competition


 The John Marris Perpetual Trophy for a Non-Australian Wine of Outstanding Quality (other than Best Wine of Competition/Runner up)


The Ted Radke Perpetual Trophy for Best Table Wine made from a Lesser Recognised Grape Variety. Joint Winners:


The Wine Society (Australia) Perpetual Trophy for Most Successful Winery of Competition. Joint Winners:



The Wine Society (Australia) Perpetual Trophy for Best White Table Wine of Competition


Mark De Havilland Memorial Trophy for Best Red Table Wine of Competition


SIWC  Perpetual Trophy for Runner up to Best Wine of Competition


 Joy Lake Memorial Championship Perpetual Trophy for Best Wine of Competition



ALDI to construct two new distribution centres

ALDI has appointed BADGE and Georgiou Group Pty Ltd for the construction of its South Australian (SA) and Western Australian (WA) Distribution Centres.

Work in SA commences this month while construction on the WA site will begin in November 2014.

The combined value of the contracts is over $100 million and will provide work opportunities to local contractors and businesses.

The Distribution Centre will act as the hub of ALDI’s store network, with up to 120 stores planned for Western Australia and South Australia.

BADGE will build the South Australian Distribution Centre at Regency Park, and construction is expected to be completed by October 2015.

The total project value for ALDI's WA and SA expansion is approximately $700 million. This includes the Distribution Centres, stores and additional infrastructure.

“We are proud of our commitment to our suppliers and contractors in Australia, many of whom have enjoyed growth and success as we have expanded over the past 13 years,” said Viktor Jakupec, ALDI managing director of SA and WA.

“The development of our Distribution Centre and stores under efficient and streamlined processes is integral to delivering the high quality products at low prices that our customers have come to expect,” he said.


Aldi continues aggressive rollout, launching into SA and WA

With an estimated five percent market share, Aldi is in the midst of an aggresive rollout of store openings, including the new markets of South Australia and Western Australia.

According to AFR, Aldi's Queensland managing director, Viktor Jakupec, will relocate to South Australia to oversee the company's entry into the state, which will include opening approximately 45 stores.

The discount supermarket is currently in the process of interviewing and recruiting store managers and area managers for South Australia, with successful applicants spending two years in Sydney, Melbourne or Brisbane before returning home.

The chain is also expected to have a distribution centre in Adelaide's northern suburbs and a number of retail stores up and running by the end of 2015.

Aldi is also planning a launch in Western Australia, which will see about 70 store openings.

According to Citi retail analyst Craig Woolford, Aldi has an estimated five percent market share (compared to 39 percent for Woolworths, 29 percent for Coles and about 15 percent for Metcash-supplied IGA stores), with  319 stores throughout NSW, Victoria and Queensland.

It also announced last week that it will set up a new major distribution centre near Brisbane, with the objective of delivering a "fully functioning warehouse capable of supporting retail stores in the greater Brisbane area and to its north," the retailer said.

The centre will integrate offices, ambient warehouse and coolhouse facilities on the site.

Aldi and CHEP team up to launch new reusable crate [video]

Supermarket chain, Aldi, has partnered with CHEP to release a new reusable plastic 'Gen 3' crate for use in the fresh produce industry.

Officially launched on 23 August at Aldi's Salisbury store in Brisbane, Aldi is the first retailer to use CHEP's new crate range, promoting supply chain efficiencies from farm gate to supermarkets.

ALDI Queensland managing director, Viktor Jakupec, said "The new crate allows products to be packed directly on farm before being delivered to our warehouses and subsequently to stores, which reduces the amount of repacking and speeds up the process. The crate design allows it to fit directly into our new fresh produce display on the shop floor, which means less product handling and therefore a higher level of product quality. Instead of store staff having to pack products on tables within the produce area, the majority of products will remain displayed within the crates which will assist with better product rotation and minimise damage to the products through less handling."

According to CHEP, the new Gen 3 crate uses globally best-in-class latching technology and is fully compatible with the previous generation crate and existing infrastructure.

"The Gen 3 crate family is a game changer. It’s not only an industry-wide solution, it offers world leading return logistics; with a folded height of 25mm, the Gen 3 outperforms all other crates on the market by up to 29 percent," CHEP Australia and New Zealand president, Phillip Austin said.

CHEP's range of reusable crates have a number of sustainability benefits. An independent lifecycle analysis conducted by RMIT in 2010 showed that compared with a single-use corrugated cardboard system, CHEP crates produced 70 percent less greenhouse gas emissions, used 85 percent less water and produced 95 percent less solid waste to landfill even if the cardboard was recycled.



Aldi bounces back in customer satisfaction stakes

The proportion of Aldi satisfied customers is once again comfortably higher than the other three major supermarket chains—but all are still within striking distance of the German discount chain.

In November last year, both Coles and Woolworths came within one percent point of Aldi, making it the closest race in five years.

But the latest results from the Roy Morgan Supermarket Satisfaction report show Aldi edging back toward the nine-out-of-ten mark, with 89.7 percent of its customers agreeing they were satisfied with the supermarket overall.

The only major supermarket to improve in 2012, Woolworths maintained silver in the satisfaction ranking (87.4 percent), followed by Coles (86.2 percent) and IGA (83.7 percent).

Norman Morris, Industry Communications Director, Roy Morgan Research, says:

“What an interesting year 2012 was for supermarket satisfaction, with long-time leader Aldi almost toppled from the top of the podium.

“Late 2012 also saw Woolworths edge ahead of Coles for the first time since 2010, reaching a five-year high in their satisfaction result.

“Meanwhile satisfaction with Coles is continuing to trend downward from its peak just shy of 90 percent a year ago.

“The Supermarket Satisfaction report also looks at how satisfied ‘bigger-basket’ grocery buyers are: among customers with an average weekly spend above $200, Woolworths is ahead of Aldi and more than three percentage points in front of Coles.

“Satisfaction is naturally a crucial battleground in the supermarket wars. Dissatisfied customers are unlikely to continue to shop at a particular supermarket if they have an alternative, and even worse are likely to ‘spread the word’ about their dissatisfaction. Therefore monitoring satisfaction levels is paramount to understanding where loyalties lie and how customers of different ages, basket sizes or neighbourhoods rate their supermarket of choice.”


Producers prefer dealing with Aldi

A number of grocery producers have spoken out – under the veil of autonomy – admitting they prefer dealing with Aldi over the supermarket duopoly.

According to SMH, the producers, who provide groceries ranging from fruit and vegetables to household products, said Aldi pays invoices faster and is easier to work with.

One supplier said Aldi absorbs losses on sales rather than reducing supplier prices or increasing costs, which both Coles and Woolworths are guilty of.

The producers' comments are in response to a dossier produced by Woolworths which claims that Aldi's presence has led to an increase in private label products and a more competitive market for grocery retailers.

The dossier also claims that Woolworths' market share has remained stagnant since 2007, while Aldi's has grown three percent since then.

It says that 95 percent of Aldi's products are private labels, but suppliers insist the German-owned chain still buys from local producers, even paying a premium to do so, and only asks suppliers to compete with other Australian suppliers, not international ones as is the case with Coles and Woolworths.

A spokesperson for Coles insisted the brand has an Australian-first sourcing policy, and usually only looks internationally when an Australian version isn't available or when consumers want an alternative choice.

The ACCC is currently looking into allegations the supermarket duolopy employs bullying tactics in its dealings with suppliers in order to drive prices down. 


Dairy awards leave bad taste in producers’ mouths

Aldi's dominance at the Sydney Royal Cheese and Dairy Produce Show has upset boutique producers, who are calling for the "philistine" brands to enter into their own separate category moving forward.

The event aims to recognise and reward innovation, diversity and excellence in agricultural production, this year handing out 30 major awards and 89 Gold and Silver medals to Australia's best cheese, dairy and chocolate producers.

The top accolade of Champion Cheese of Show went to Victorian-based Berrys Creek Gourmet Cheese for its Tarwin Blue, which also claimed the Champion Fancy Cheese and Champion Bovine Cheese award.

The five cheeses selected for the coveted Austraian Cheeseboard Perpetual Trophy were:

  • Lion Dairy and Drinks (Burnie, TAS) – Tasmanian Heritage Red Square
  • Lion Dairy and Drinks (Burnie, TAS) – Heidi Farm Tilsit
  • Berrys Creek Gourmet Cheese (Poowong, VIC) – Tarwin Blue
  • Small Cow Farm (Robertson, NSW) – Petitvache Brie
  • Bega Cheese (Bega, NSW) – Rindless Cheddar Cheese

However, supermarket Chain, Aldi, was a big winner in its first year at the event, taking home the Most Successful Dairy Produce Exhibitor award, Most Successful Butter Exhibitor and Champion Butter for its Just Organic Butter, as well as Most Successful Cultured Milk Products and Yoghurt Exhibitor.

Aldi walked away with 49 medals, including eight golds, upsetting a number of producers who feel they shouldn't be competing with large retailers.

Pepe Saya, who makes the hugely popular Pepe Saya butter, stopped participating in the awards once Coles started entering its generic brands.

"I don't believe that a non-manufacturer or a non-producer should be allowed to leverage off the Sydney Royal brand," he told Good Food.

"Here's a brand that's been given to the philistines like Aldi, Coles and Woolworths. [But] what does it mean to have a gold any more? This is the disappointment. This is the heartache."

Aldi's dominance has triggered calls for a separate awards category to be created. Michael McNamara, cheesemaker at Pecora Dairy in Robertson, NSW, and treasurer of the Australian Specialist Cheesemakers' Association said the Royal Agricultural Society is "shooting itself in the foot" by having supermarket brands compete alongside artisanal producers.

"The awards have become a parody of themselves if what they're taking is big, industrial products and putting them in the same category as hand-made, artisan products," he said.

Other 2013 Sydney Royal Cheese & Dairy Produce Show winners include:

The Jim Forsyth Perpetual Trophy donated by Jim R Forsyth.
Country Valley
Class No. 8 / Cat No. 39
Organic Lite

The Milk Marketing Perpetual Trophy donated by Milk Marketing NSW.
Warrnambool Cheese & Butter, Allansford

The NSW Food Authority Perpetual Trophy donated by the
NSW Food Authority.
Bega Cheese
Class No. 23 / Cat No. 113
Bega Strong & Bitey

Bega Cheese

NSW Food Authority Perpetual Trophy donated by the NSW Food Authority.
Berrys Creek Gourmet Cheese
Class No. 39 / Cat No. 275
Tarwin Blue

The Bega Cheese Perpetual Trophy donated by Bega Cheese.
Bega Cheese

The Australian Dairy Corporation Perpetual Trophy donated by Dairy Australia.
Berrys Creek Gourmet Cheese
Class No. 39 / Cat No. 275
Tarwin Blue

Prize (Annual Trophy), supported by the Dairy Produce Committee.
Berrys Creek Gourmet Cheese
Class No. 39 / Cat No. 275
Tarwin Blue

Serendipity Ice Cream
Class No. 50 / Cat No. 420
Salted Caramel Swirl

Serendipity Ice Cream

Cow And The Moon
Class No. 59 / Cat No. 571
Banana And Salted Caramel

Cow And The Moon

Mundella Foods
Class No. 64 / Cat No. 670
Greek Natural

Brilliant Food
Class No. 73 / Cat No. 808
Smoked Kingfish Rillettes

Paradise Beach Purveyors

Barambah Organics
Class No. 76 / Cat No. 819
Pure Cream

Nicholson Fine Foods Pty Ltd

Simon Johnson Perpetual Trophy donated by Simon Johnson.
Jindi Cheese P/L
Class No. 86 / Cat No. 867
Goat Gouda

Hotel Inter-Continental Perpetual Trophy donated by the Hotel Inter-Continental, Sydney.
Holy Goat Cheese

Bracegirdles House of Fine Chocolate
Class No. 112 / Cat No. 73
High Thai

Nestlé Perpetual Trophy donated by Nestlé Confectionery.
Bracegirdles House of Fine Chocolate