Aldi leveraging double-digit growth
Aldi’s Australian liquor range is growing at a rate above the market average and Jason Bowyer, the Buying Director for Wines and Sparkling, predicts this momentum will continue in 2020.
In 2019, Aldi had its strongest award-winning year to date, with a trophy for beer, six gold medals for spirits, and more than 150 medals and three trophies for wine. And according to Bowyer, the international accolades continue to challenge perceptions about the link between price and quality.
“We are really proud of the year Aldi had in 2019. Led by a strong year of stellar awards, our most to date, our alcohol range continues to wow our customers on value and quality,” Bowyer said.
“Our $6.99 One Road South Australian Heathcote Shiraz 2018 won gold at the Great Australian Shiraz Challenge for the third year in a row. Quite incredible that a wine we retail for $6.99 consistently trumps wines many times its price.”
Also showing double-digit growth is Aldi’s liquor range, which Bowyer said is “well above market growth”.
“We do not believe there is another national retailer seeing the levels of growth we are seeing. Our performance over the last five years has been very strong, so to continue experiencing compelling organic growth outside store growth is testament that we are dragging more shoppers our way,” Bowyer says.
Continuing to leverage the opportunities provided by this growth is a focus for Aldi in 2020, as it aims to deliver quality products at scale to customers. Rather than attracting new customers to the store, Bowyer said the goal is to drive existing shoppers and “convert more of them to do their liquor shopping with Aldi”.
One way to encourage this conversion is by tailoring the offering and marketing to consumer trends in the drinks market. Aldi sees a number of key trends emerging that will impact all categories.
“How, when and what consumers are drinking is definitely changing. Consumers’ repertoire of products is far broader than ever before and they are chasing refreshment, occasion and the visual element to how and what they drink, often drinking across categories,” said Bowyer.
“There is a move to lighter and fresher styles of drinks across the beer, wine and spirits space. In wine, that is Prosecco, Pinot Grigio, rosé, Gamay, Grenache and Tempranillo.”
Another trend that Aldi will focus on in 2020 is that of the mindful shopper, with consumers increasingly making buying decisions based on product origins, ingredients, production techniques and sustainability. In this sphere, organic, biodynamic, vegan and low/no alcohol products will do exceptionally well.
Mindfulness about the environment is also being applied to other areas of the business, with Aldi working to create the best solutions for all parties involved in transactions in-store.
Bowyer said: “Drought, fires, higher temperatures and a lack of water are all contributing to a level of uncertainty within the industry. It is important that we work with our partners in finding solutions that are not only good for the customer, but also the supplier and us, the retailer.”
The key to success
Bowyer said there are several key elements involved with Aldi’s success in liquor retailing.
“We work incredibly hard with our great pool of business partners to bring our customers what they deserve – great quality products at everyday low prices. Working with us is easy; shopping with us is even easier. We work hard to keep the customer’s trust. They know when they come to Aldi they will be getting a good value product every time.
“Our limited range ensures that our focus is on a small and tight range of products. Our customers will experience less choice, but we make sure they get back in return: quality, value, a tight range and a mixture of uniqueness.”
This story was written for the National Liquor News Industry Leaders Forum.