As a savvy shopper always on the hunt for a good deal, Aldi is probably already on your radar. The no-frills German grocery chain is known for its rock-bottom prices on basics like milk, eggs, bread, and fresh produce. In fact, Aldi now accounts for over 2,000 stores across 36 U.S. states as well as $16 billion in American sales in 2020 alone.
But as the saying goes, you get what you pay for. Aldi‘s prices are so low that many consumers can‘t help but wonder what shortcuts they‘re taking behind the scenes. Are those Aldi brand crackers and cookies full of inferior ingredients? Does the meat come from farms with poor living conditions for animals? And perhaps the most common question of all: does Aldi buy food from China?
After digging into Aldi‘s business practices and supply chain, I‘ve put together this comprehensive guide to help my fellow deal-seekers shop as informed as possible. Let‘s start with the big picture before zeroing in on the China question.
How Aldi Keeps Prices So Low
First, it‘s helpful to understand how Aldi is able to consistenly undercut other supermarkets, sometimes by as much as 50%. The company‘s streamlined approach is really the key. Here are a few of the most important cost-saving strategies:
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Private label dominance: Around 90% of the products at Aldi are their own private label brands. Selling Aldi-exclusive products eliminates the marketing and advertising costs that inflate prices on name brands.
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Smaller selections: Whereas a traditional grocery store may carry 40,000 different products, Aldi stores typically stock just 1,400 core items. Fewer products to manage means greater efficiency and buying power with suppliers.
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Strategic product sizing: If you‘ve shopped at Aldi, you‘ve probably noticed their products often come in unusual sizes compared to other brands. This allows them to offer the lowest unit price while still making a profit.
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Streamlined store design: Aldi stores are generally smaller (around 12,000 square feet), and products are displayed in their shipping boxes to minimize stocking time. Fewer staff are needed to run each store.
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Self-service savings: From bagging your own groceries to paying a quarter to "rent" a shopping cart, Aldi offloads tasks to shoppers that other stores handle themselves. This keeps labor costs down.
When all of these factors are working together, the savings can be passed on to customers without sacrificing too much in terms of quality. But what about the origins of those low-priced products?
Aldi‘s Local Sourcing Model
With its German roots, many people assume Aldi is shipping in tons of inventory from Europe. But the reality is actually the opposite. The company prides itself on sourcing the vast majority of its food from local suppliers.
According to Aldi‘s website, "We partner with farmers and manufacturers with a shared commitment to quality and responsibility… more than 90 percent of our products are Aldi-exclusive brands, and we source many of our products from right here in the U.S."
This locally-focused sourcing is a major reason Aldi is able to keep prices so low. Less transportation equals lower costs and lower emissions. The company operates 26 distribution centers across the country, each one receiving shipments from nearby farms and food processing plants.
Aldi states that their suppliers must meet high standards for "sustainability, product safety and social responsibility." The company conducts audits to ensure workers have fair wages and safe conditions. They also require many suppliers to be third-party certified on factors like animal welfare, environmental impact, and responsible use of antibiotics.
This kind of domestic focus isn‘t just good for business – it‘s what consumers want. The pandemic-driven disruptions of 2020 made many people place an even higher value on food supply chain resilience. A full 60% of shoppers now say they prefer to buy U.S.-made products whenever possible, according to a Consumer Reports survey. Younger adults and parents of young children are particularly likely to check labels for country of origin.
So, Does Aldi Buy Food From China?
With Aldi‘s emphasis on local sourcing, the vast majority of the food they sell does not come from China. The company estimates that 90% of their products are American-made, with many of their raw foods (produce, dairy, meat, etc.) sourced from regional farms.
However, there are a few key exceptions to this rule, the biggest being some types of seafood. In 2017, Aldi (and several other major retailers like Walmart and Publix) came under fire when an investigation revealed some of their imported seafood came from Chinese processing facilities using forced labor.
The workers in question, many of them North Korean citizens, endured grueling hours and inhumane living conditions while having most of their pay garnished. Advocacy groups have urged all retailers to cut ties with these problematic supply chains.
Since then, Aldi has publicly reaffirmed its commitment to human rights and fair labor practices in the supply chain. The company released seafood buying policies focused on sustainability and traceability. They also joined the Ocean Disclosure Project to share details on the fisheries they buy from.
Despite this progress, Aldi‘s most recent disclosure data does show they still source some seafood from China, including Albacore tuna and tilapia. The Chinese fisheries they buy from are certified as "managed" rather than "well-managed" in terms of sustainability practices. So while Aldi seems to be making an effort on this front, some imported seafood remains one of the few categories where Chinese products make it to their shelves.
Tips for Checking Country of Origin
For shoppers trying to avoid products from a particular country, checking the label is often the best way to determine an item‘s origins. Thanks to the 2002 Farm Bill, country of origin labeling (COOL) is actually required for certain foods like produce, peanuts, meat, eggs and shellfish.
These mandatory labels apply to foods in their raw or unprocessed forms. That means the bag of fresh carrots is labeled, but the frozen chicken pot pie may have no indication of where each ingredient originally came from. Processed food labels only need to indicate the country of the final "substantial transformation" before sale.
Seafood labeling requirements were recently strengthened such that labels must specify if a product originated in the U.S. or was imported. If any processing happened abroad, that country must also be listed.
So, your best bet for determining country of origin at Aldi (or any grocery store) is to stick with single-ingredient whole foods like fruits and veggies, meat, eggs, and some dairy. Any food without a country listed or marked as "Product of USA" is assumed to be domestically produced.
For seafood, be sure to look for the country details every time, since Aldi‘s offerings in this category can vary. You can also check their Ocean Disclosure Profile for specifics on different fisheries.
One more thing to note: while food transparency is Aldi‘s policy, some of their non-food Aldi Finds items are indeed manufactured in China. These seasonal deals on everything from rain boots to patio furniture will typically mark on the label when China is the country of origin. Again, no country indicated means made in the USA.
A 2020 study published in the journal China Economic Review found that U.S. consumers are generally willing to pay 20-25% more for products labeled "Made in USA" as compared to those from China. The preference was most pronounced in the Midwest, and for items like baby products and meat.
How Do Other Grocers Compare?
If avoiding food from China is an absolute must, Aldi is actually one of your best bets among major national chains. Their local-first sourcing model means that an estimated 90% of their products are American-made.
Other low-cost chains like Walmart now source the majority of their groceries (an estimated 70% or more) from the U.S. as well, but there are still entire aisles of their stores filled with imported products.
Even seemingly "all-American" stores like Trader Joe‘s and Whole Foods actually source a good portion of their frozen fish, shellfish, and other products from China and southeast Asia (though Whole Foods has made major commitments to sustainable seafood sourcing in recent years).
The reality is that China is the top producer and exporter of seafood globally, producing around 60 million tons per year. The vast majority of the tilapia, cod, tuna and farm-raised shrimp and salmon we eat in the U.S. is imported from China.
Avoiding Chinese products altogether is extremely difficult in today‘s globalized economy. However, the more a company prioritizes domestic sourcing like Aldi does, the easier it becomes for consumers. The key is doing a little research to understand a retailer‘s sourcing practices, and checking those labels carefully.
Key Takeaways for Aldi Shoppers
Based on my analysis, here are the most important things to know about Aldi‘s product sourcing:
- An estimated 90% of Aldi products are made or grown in the U.S., often by local or regional suppliers. This is a higher domestic percentage than most other major grocery chains.
- While the vast majority of Aldi‘s food is American-made, a few product categories still come from overseas, most notably some of their seafood. Always check the country of origin on seafood at Aldi.
- Some of Aldi‘s non-food Aldi Finds seasonal products may also be made in China, so be sure to check those labels if buying American is a priority.
- To be sure a food product at any grocery chain is domestically produced, look for the country of origin on the label. By law, retailers must label foods like produce, nuts, eggs, meat and shellfish with their country of origin.
- Packaged, processed foods pose a greater sourcing challenge since they fall outside the COOL labeling laws. The more foods consist of a single, whole ingredient, the easier it is to trace their origins.
- Shopping at Aldi is a great way to support American food producers on a budget, since their locally-focused model allows for low prices without sacrificing domestic sourcing.
While Aldi isn‘t perfect, they offer an affordable way for shoppers to feed their families a diet of predominantly American-grown foods. With a little practice in label reading, it‘s definitely possible to buy USA-made products without breaking the bank.
As Aldi continues to grow its market share in the U.S., they appear committed to working with domestic growers and manufacturers as much as possible. Their focus on streamlined distribution and short supply chains is precisely what makes their rock-bottom prices possible. It‘s a business model that seems to be working for customers, workers, and investors alike.
The bottom line? Aldi is already one of the best bangs for your buck if buying American is a priority. As their U.S. presence expands in the coming years, one can only hope they‘ll increase their partnerships with sustainable domestic fisheries and farms even further.
Until then, it pays to be an eagle-eyed Aldi shopper when it comes to things like country of origin. That‘s the only way to be able to fully trust where your food dollar is going.
