Why is Logistics Crucial for Cooperation with Retail Chains?

Entering major retail chains is a huge opportunity for fresh fruit and vegetable suppliers, but it also involves meeting strict logistical requirements. Retailers expect timely deliveries, compliance with safety standards, and full supply chain transparency.

Cooperation with giants such as Lidl, Aldi, or Rewe requires adapting to rigorous standards regarding quality, transportation, and product storage.

2. Key Logistics Standards in Retail Chains

2.1. Quality and Safety Standards

Retail chains require suppliers to strictly adhere to quality standards, which include:

• A maximum of 1/3 of the EU’s permitted pesticide residue levels (Lidl).
• Zero tolerance for certain chemical substances.
• Full product traceability, including information about origin, cultivation methods, and transportation conditions.

Aldi has implemented an “ethical sourcing” model that focuses on:

• Transparent production and transportation costs.
• Reducing the carbon footprint and minimizing water consumption in the supply chain.

2.2. Delivery Timeliness

Retail chains apply the 100% on-time delivery compliance rule (OTIF – On Time In Full). Any delays may result in:

• Financial penalties.
• A lower supplier priority in future orders.
• Contract termination in case of recurring issues.

2.3. Packaging Requirements

Suppliers must adhere to standard packaging guidelines:

• Durable, transport-resistant packaging to prevent product loss and damage.
• Clear labeling – barcode, expiration date, batch number.
• Eco-friendly solutions – such as reducing plastic packaging, which Aldi requires.

2.4. Quality Control Procedures

Retailers conduct multi-level quality tests:

• Laboratory testing before signing a contract.
• Regular quality audits at suppliers’ facilities and distribution centers.
• Random product testing in stores.

3. Logistics Costs and Their Optimization

3.1. Costs Associated with Distribution

Collaborating with a retail chain involves additional costs, often passed on to the supplier. The most important ones include:

• Delivery costs to the central warehouse – most retailers do not pick up goods but require suppliers to deliver them.
• Storage costs – if returned products remain in the retailer’s warehouse for too long, extra charges may apply.
• Order handling and transportation costs – some retailers require specific delivery standards, which may lead to higher logistics expenses.

3.2. How to Optimize Logistics?

To reduce operational costs, consider implementing the following solutions:

• Effective delivery planning – adjusting production schedules to retail order cycles.
• Optimizing inventory management – avoiding excessive stock levels and minimizing fines for product shortages.
• Using logistics outsourcing – partnering with specialized logistics operators instead of investing in a private fleet.

4. Returns and Complaints – How Does It Work?

Product returns can generate significant costs, so understanding the return policies of each retail chain is crucial.

4.1. Key Principles of Returns Management

• Flexibility in return policies – some retailers require the option to return rejected products, which should be included in the contract.
• Discounts instead of returns – in some cases, retailers may offer to sell products at a discount instead of returning them to the supplier.
• Minimizing complaints by:
  • Ensuring high product quality.
  • Using appropriate transportation and storage methods.
  • Adapting packaging to retailer requirements.

5. Summary

Signing a contract with a retail chain is just the beginning of a demanding partnership. To meet retailer expectations, suppliers must:

• Comply with strict quality and safety standards.
• Effectively manage logistics and delivery costs.
• Ensure timely and accurate deliveries.
• Prepare for regular audits and laboratory tests.
• Manage return and complaint policies in a way that minimizes losses.

Meeting these requirements can be challenging, but for well-prepared companies, it ensures stable and long-term cooperation with the biggest players in the market.