Bananas
Our Approach
We are aware that all supply chain stakeholders (including retailers), have a vital role to play in creating a banana sector that is socially, economically, and environmentally sustainable. Both ALDI’s and our partners current and future actions will support human rights and the environment. We are further integrating CR into our buying to help deliver our long-term goals, but we can’t do this alone, it is a shared endeavour. Everyone involved contributes to a sustainable and fair banana supply chain.
Our Actions
Sustainable Sourcing of ALDI's Bananas
We are strengthening the sustainability of ALDI’s banana supply chain via an approach developed with our strategic suppliers. We are implementing more responsible purchasing practices and further increase the transparency of production costs. This improvement to our buying process means that critical cost changes and cost fluctuations that impact all supply chain stakeholders can be addressed much better together.
Cost Transparency of Production and Supply Chain
During 2022, we collaborated with selected key business partners to identify relevant cost factors (including e.g. labour on farms or other production costs) that could be reflected in a joint open-book costing approach. This approach ensures that the banana prices we pay to our suppliers are fairer and more accurately reflect sustainable production costs. This means that we are directly benefitting producers and workers, instead of the money being absorbed along the supply chain.
ALDI’s Sourcing based on the Fairtrade Methodology
Our approach goes beyond ring-fencing cost items in negotiations. By following a partnership approach, jointly setting adequate cost factors, or identifying suitable benchmarks, we take into account critical price developments for all relevant costs (e.g., packaging, fuel or logistics).
Fairtrade International regularly collects production costs from Fairtrade-certified banana producers. We will use the cost factors published annually by Fairtrade International for our price setting. This does not involve paying the Fairtrade minimum price for all our bananas, but only for the Fairtrade-certified bananas. What it means is that changes to the cost factors underpinning the Fairtrade Minimum Price will be considered in our sourcing. This is an essential step to better identify and further mitigate price fluctuations that can negatively impact workers and stakeholders at production level.
„We welcome ALDI’s efforts, which will have a positive effect on banana supply chains and look forward to expanding our co-operation on Fairtrade-labelled bananas in the future.”
Detlev Grimmelt (Executive Board of Fairtrade Germany)
Strengthening Integration of Sustainability into our Buying
Part of our International CR Strategy looks at assessing and then supporting our suppliers to be better through the CR Supplier Evaluation (CRSE). Our goal is to source at least 80% of bananas from suppliers with a good CR performance. This enables us to select the right business partners for collaborating towards improving their CR performance and management and towards a more sustainable banana supply chain. Shifting our buying volume to those suppliers with a good CR performance, CR management system and set-up provides an incentive for our business partners to invest in continuous improvements.
potential and current business partners evaluated (2020)
potential and current business partners evaluated (2021)
Long-Term Partnerships for Shared Responsibility
We have engaged with our long-term strategic suppliers covering the majority of our buying volume to strengthen sustainability in the ALDI banana supply chain. We are starting this more responsible purchasing model with them during 2022 and we aim to expand it to additional business partners over time. As our strategic suppliers support us in implementing new ways of buying, we commit to long-term partnership and to, at minimum, keeping the banana volumes they supply to ALDI stable. This gives them financial security and allows them to commit to longer-term sourcing and investments in sustainability with their producers.
"Being a solid institution, with a track record, scope and positioning, I believe that ALDI has the capacity to allocate the necessary resources to achieve real changes in the consumer's perception of the quality of Ecuadorian bananas and the effort involved in making our product sustainable. ALDI's new approach is to have first-hand information from the exporter and producer about the complexities and needs of the business. This allows us to ensure a stable and progressive volume over the years and establish a fair price to cover the investments we need to make in order to meet everyone’s expectations. I believe that there are greater opportunities to reach a fair price by working under the principles of shared responsibility and transparency.”
Danilo Palacios M. (CEO of Corporación Palmar)
Transparency
Supply chain transparency is the foundation for all our sustainability measures. Without the knowledge where our products come from, we cannot ensure compliance with our requirements, analyse risks, monitor, or implement projects. We work with our business partners to increase the transparency of our supply chains so that we have a better understanding of the origins of the products we sell and the raw materials we use in our products. In 2021, we published the names and addresses of our direct business partners (tier 1 suppliers) for bananas.
100% Certified Bananas
We apply social and environmental requirements for suppliers at grower level for bananas. The ALDI SOUTH Group uses independent certification schemes when buying bananas. These certification schemes ensure that ALDI products are sourced in an environmentally friendly and social manner.
Since 2019, all European and US ALDI stores have exclusively offered bananas that are certified according to the Rainforest Alliance standard or organic bananas in combination with either Fairtrade certification or the GLOBALG.A.P. Risk Assessment on Social Practice.
Our 100% certification achievement is already a great start. However, we know that standards and certification schemes do not adequately address all environmental and human rights issues. Our strategy for creating a more sustainable banana supply chain also involves how we are going beyond audits to focus on how risks are being identified and managed together with our business partners.
Supply Chain
The bananas sold in our European and US stores are sourced internationally and nationally for our Australian customers. We closely evaluate our business partners on their social and environmental risk and compliance management systems and their farms’ or production facilities’ CR performance.
Business Partner Collaboration
Our business partners have an important role in implementing our commitments and ensuring compliance with our requirements throughout the supply chain. We foster open and constructive dialogues with our suppliers to enhance the sustainability of the banana sector.
Supplier Evaluations
We have established an annual Corporate Responsibility Supplier Evaluation (CRSE), which goes beyond conducting audits and further integrates sustainability-related metrics into our buying decisions.
The CRSE is a comparable and transparent evaluation based on quantitative and qualitative indicators. The indicators focus on our business partners’ social and environmental risk and compliance management systems as well as their farms’ or production facilities’ CR performance. They are derived from our international CR Requirements and expectations, which form part of every contract.
We successfully piloted this approach with our banana suppliers in 2019 and have since standardised this process so that every banana supplier has to participate as a precondition for supplying ALDI stores. The CRSE result of our banana suppliers also forms part of our buying decisions. In line with our Vision 2030, we are committed to sourcing 80% of our buying volume from high-risk supply chains from A and B rated suppliers as part of a stepwise approach over the coming years.
potential and current business partners evaluated (2020)
potential and current business partners evaluated (2021)
Producer Assessments
We conduct our own producer assessments on plantations in relevant countries of origin. This enables us to carry out spot checks to verify how the producers work in our supply chain and how our requirements, the “ALDI Social Standards in Production”, are being implemented and met.
Producer Assessments conducted (2021)
Human Rights
We respect human rights and do our part to improve living and working conditions throughout our supply chains.
Human Rights Risk Assessment
regularly conduct human rights risk assessments to understand the risks within our food and agriculture supply chains. The aim of these assessments is to identify any adverse impacts our company may have on human rights, gain insights into our actual impacts, and understand how we may be involved through our own activities or because of our business relationships.
We determined that bananas are a raw material with a high risk of adverse impacts on the enjoyment of human rights and consider it most important to the ALDI SOUTH Group.
Living Wages and Living Income
We aim to work towards supporting farmers and workers in our banana supply chain to have a decent standard of living. In May 2021, the ALDI SOUTH Group and the ALDI Nord Group jointly published their “International Position Statement on Living Wages and Living Incomes”, which emphasises our commitments to a decent standard of living in global supply chains.
We are a participant in the “German Retailer Working Group on Living Income and Living Wages” established by GIZ (Deutsche Gesellschaft für internationale Zusammenarbeit). This Working Group has set itself the objective of coordinating and implementing joint activities to work towards the realisation of living wages and living income in global agricultural supply chains. The aim is to achieve a minimum of 50% living wage for our banana farmers supplying our German market by 2025.
A particular focus of the Working Group is assessing living wage and living income gaps and piloting approaches to close identified gaps. Another of its strategic aims is to support trade union and collective bargaining structures in banana-producing countries in support of a decent standard of living for farm workers.
Stakeholder Dialogue & Capacity Building
We believe the best way to protect the people and the environment is through joint initiatives and partnerships. For this reason, we engage in various multi-stakeholder initiatives and projects on the ground.
Our CR Performance
Certification of our bananas sold in our European and US stores
Publication of our bananas' country of origin
Publication of direct business partners (tier 1 suppliers) for bananas
Integration of banana suppliers into our CR supplier evaluation (Europe & US)
CR supplier evaluations of potential and current business partners
Library
Sustainable Development Goals
UNGC
Human Rights
Principle 1
Support and respect the protection of human rights
Principle 2
Not complicit in human rights abuses
Labour
Principle 3
Uphold freedom of association and recognition of right to collective bargaining
Principle 4
Elimination of forced and compulsory labour
Principle 5
Abolition of child labour
Principle 6
Elimination of discrimination in respect of employment and occupation
Environment
Principle 7
Precautionary approach to environmental challenges
Principle 8
Promote environmental responsibility