Discount Retail Chain Aldi USA (German family owned) has managed to achieve growth within the meat category over the past. As meat and poultry were two of the nine key items forecasted to continue rising in price this year, according to recent government data.
Scott Patton, vice president of National Buying at Aldi, recently spoke with SN about what the grocer intentionally does and doesn’t do to reduce costs and pass savings onto its customers, from skipping the meat counter to vacuum-sealing products to keep meat at peak freshness.
This strategy has allowed Aldi to grow meat purchases by nearly 50% over the past five years. What’s more, Patton says that industry insights such as grocery and category sales trends help it to decide where to focus next by introducing new products, for example, to meet those demands.
In 2022, total meat sales were $87.1 billion, with a 98.3% household penetration and consumers taking some 50 shopping trips per year to purchase meat. Sales grew 5.7% versus 2021 and pound sales remained above pre-pandemic levels.
As of April, meat still remained the biggest perimeter department, with prices decreasing for beef, pork, lamb, bacon, dinner sausage, and processed chicken. Bacon prices were also down by double digits in April 2023 compared to April last year.
“With food prices still on the rise, Aldi customers know they can rely on us for affordable, fresh meat and seafood, including seasonal flavors and premium cuts. We continue to provide value to our shoppers by offering high-quality products at low prices in every aisle, every day,” Patton said.
Aldi already has a strong following for private label brands, according to Patton, however, the discount supermarket chain has seen interest grow since inflation began pressuring consumers to make every dollar go further.
Year-over-year growth of private label sales was nearly double that of CPG brands (10.3% compared to 5.6%) in the first quarter of 2023, according to data from PLMA.
“We know shoppers are increasingly interested in store brands across the grocery industry,” Patton said.
Because Aldi stores are stocked with 90% private-label brands, Patton said they are able to closely control the supply chain and cut out inefficiencies of national brand products to offer shoppers more competitive pricing.
“For example, during the summer we sell favorites like brats for 49% less than our competitors. That’s because Aldi makes deliberate decisions every day to cut unnecessary costs and champion value for customers,” Patton added.
When it comes to the meat aisle specifically, “We look critically at our operations to determine how we can create cost savings without sacrificing quality of experience,” Patton said.
Research from FMI shows that while 83% of meat consumers go to stores with a full-service meat counter, 75% of all purchases are made at the self-serve case. By leveraging these insights, Patton said Aldi created a strategy to skip the meat counter and add more savings for shoppers.
Overall, Aldi stores are able to keep their footprints small and efficient, and as a result keep labor costs low, allowing employees to focus instead on quality and price.
As for looking at where to focus next, Patton said that Aldi pays attention to consumer trends, dietary needs, and changing food preferences, working closely with suppliers and watching shopper behavior in its own aisles to see what is trending as consumer behavior and preferences shift.
“This allows us to move quickly from concept to product. We put significant time and effort into ensuring we carry an on-trend selection. For example, over the past 18 months, more Aldi shoppers opted for dairy alternatives like plant-based milk, inspiring us to add plant-based butter to our line-up this summer,” Patton said.
Other private label products that have done well for the grocer include the PurAqua Belle Vie sparkling flavored water, and Earth Grown vegan product lines, which started off as Aldi Finds (weekly special) products, but became so popular they are now offered year round.
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