BATAVIA, Ill. — When she was a graduating college student, Joan Kavanaugh knew so little about Aldi she nearly blew off her job interview. Eighteen years later, much of what we know about Aldi's U.S. business can be traced to Kavanaugh's influence.
As vice president of purchasing for the limited-assortment retailer, Kavanaugh today is focused on refreshing the private brands that make up 95% of the discounter's SKUs. In addition, Kavanaugh is leading an aggressive effort to recruit new suppliers of goods to serve the company's growing geographic footprint, as well as to strengthen its selection in particular categories.
Those moves — in the throes of a shaky economy — are designed to help attract trial and aid retention of Aldi shoppers, said Kavanaugh, who ought to know. She needed to be convinced once herself.
“I signed up to interview with Aldi not knowing what it was,” Kavanaugh confessed in a recent interview with SN. “I know you're not supposed to do it that way, but I signed up mostly to get interviewing experience. And when I found out they were a grocer, and a discount grocer at that, I was dreading it. I wasn't at all fired up by the idea.”
Kavanaugh, who was graduating with a degree in marketing and management from the University of Cincinnati, envisioned herself working instead as a brand manager for hometown CPG company Procter & Gamble. But she was unexpectedly intrigued by the opportunities described to her at Aldi, as well as the company's values and benefits, including starting pay. “As the process unfolded, with each step I became more and more interested,” she recalled. “Finally I said, ‘I'm going to die if I don't get this job!’”
That was in 1991, and her career has progressed from district manager to director of store operations, then to a vice president role, where she founded Aldi's Oak Creek, Wis., division, and most recently to the corporate purchasing assignment.
“We all have an opportunity to make a difference,” Kavanaugh said. “And the way the company is structured, with very few levels, your responsibilities can be very far-reaching. One of the things I'm most proud of is seeing the people I've hired go on to receive promotions and managerial roles in the company.”
Kavanaugh's latest project has her involved with Aldi's products on both sides of the business. Inside the store, the company's stable of private-brand products are being reintroduced under brand names and packaging that communicate particular product attributes rather than their category, as previously merchandised. This allows Aldi to better align its products with the store and allows the company to “tier” certain offerings.
“We are actively limiting the number of brands in the store to create stronger brands, and in that process trying to do a better job highlighting brand attributes,” she explained. “I think we can do a better job calling out to consumers the appropriate nutritional or other product benefits. Customers will definitely notice that this year.”
Aldi's newly redesigned Fit & Active brand is one such example. Used on a variety of items ranging from yogurt to corn chips, the packaging showcases guideline daily amounts and “fit facts” highlighting attributes like calorie, fat and sodium content. “It's a little thing that helps consumers make better choices,” Kavanaugh said.
Grouping various items under an umbrella helps the brand send a message to the consumer, and that encourages trial and trust in the brand, Kavanaugh said.
“When a brand can reach across 15 products rather than two, it really starts to signify something for the consumer,” she explained. “And we want the brands to be synonymous with Aldi.”
On the purchasing side, Kavanaugh said the company is aggressively seeking out new suppliers to support ongoing expansion and a continuing pressure to keep costs low and quality high.
“Florida is a new geographic market for us, and our supply base in that region is not as strong as we'd like it to be,” Kavanaugh said. “So we're really focusing on adding new suppliers, and we have a very in-depth program on how we're going to go about that.”
Kavanaugh said she is also heading up a program to improve Aldi's competitiveness in certain categories. Starting this year, for example, the chain will be more aggressive in pursuing seasonal holiday sales, including a marked increase in the number of items stores will offer.
Finally, Kavanaugh wants Aldi to be a better partner to its suppliers. A presentation at the Private Label Manufacturers Association show in November highlighted the effort, which includes a new website and improved convenience.
“We want to be more accessible to suppliers, so when they call in to Aldi and say they want to do business, they don't have to jump through a lot of hoops and hurdles,” she explained. “To the consumer's eye this might be invisible, but the stronger our supply base, the more competitive we can become, the better we can control our costs — and that's a win for the consumer, because there's even better quality at even lower prices. That's what our niche is totally based on.”
For suppliers, Aldi offers sales volume and consistency, Kavanaugh added. “Because we don't play the high-low game, suppliers don't have to deal with a huge spike in production when the item is on special, then have the problem of figuring out what to do with their lines when it's not on sale,” she said.
Kavanaugh also was involved in Aldi's decision to retain a new advertising agency, McCann Erickson. That firm's work will be seen in store circulars as soon as April and in television advertising this fall. “We think we have such an outstanding offering and the market is right for us to tell our story,” she said.