Albertsons Steps Up Its Playbook to Counter Rising Ingredient Costs

In an era where global supply chains are being reshaped by tariffs and trade policies, grocery giant Albertsons is sharpening its strategy to protect both its margins and its customers’ wallets.  

During a July 15 earnings call, CEO Susan Morris outlines a multi-pronged defense against the growing costs of ingredients, many of which are being squeezed by tariff-heavy trade policies under the Trump Administration. Cocoa, vanilla, cinnamon, and dozens of other imported ingredients are already feeling the pressure, with spice imports topping $2 billion in 2024 from more than 50 countries. Major suppliers like McCormick are bracing for significant cost increases, with the spice leader projecting up to $90 million in added annual expenses.  

Albertsons’ First Line of Defense: Transparency and Alignment  

Before accepting any price increases from vendors, Albertsons is dissecting the numbers. The goal: ensure both parties agree on the cost rationale before any changes are passed through the supply chain. With over 90% of its goods domestically sourced, Albertsons has some insulation from tariffs, but Morris made it clear that if the duties become “unwiedly,” the company is prepared to explore alternative sourcing options.  

Balancing Costs Without Losing Customers  

While higher supplier costs sometimes make price increases unavoidable, Albertsons says it passes them on to shoppers only when absolutely necessary. Staying “very close to the competitive set” is a top priority, especially on key commodity-driven items where price sensitivity is high.  

Private Label Growth as a Strategic Lever  

One avenue for cost control and customer value lies in the company’s own-brand products, which currently account for nearly 26% of sales. Albertsons believes that figure should be closer to 30%, and leadership sees tariffs as a potential catalyst to accelerate that shift given local production is not exposed to latest global trade policies. Private labels offer more control over production, sourcing, and pricing by giving Albertsons a flexible tool in the face of market volatility.  

A Broader Industry Shift  

Albertsons’ moves echo a broader trend in the grocery sector: building supplier resilience, diversifying sourcing, and boosting private label portfolios to weather cost shocks. As tariffs continue to ripple through food manufacturing, from exotic spices to everyday staples, retailers are finding new ways to keep shelves stocked, prices competitive, and customers loyal.  

The message from Albertsons is clear: adaptability, transparency, and strategic sourcing will be the grocery chain’s recipe for navigating today’s unpredictable cost landscape.  

Leveraging technology to reinforce these strategies, Aquatio solutions play a crucial role by enhancing supply chain transparency and providing real-time visibility into shipping. These solutions enable organizations like Albertsons to quickly adapt sourcing decisions and maintain alignment across suppliers, strengthening resilience in an increasingly complex market.