News

Aldi booze sees double-digit growth in US

07 November 2024 By Ron Emler

The budget retailer is bucking the trend of declining alcohol sales in the United States, with Aldi claiming customers “have really seen the value proposition” of own-label brands.

As the American consumer recoiled from premiumisation price rises and the effects of inflation, overall volumes of alcohol sales fell by 3% in the first seven months of this year, according to IWSR.

All major categories were affected including Tequila, American whiskey, beer and wine.

But there was a bright spot.

Canned cocktails (RTDs) grew by 2% as the drinker looked for economy, convenience and an extended range of pre-mixed flavours.

The declines are a “normalization” within the industry, with alcohol sales nearing their pre-Covid levels, according to Marten Lodewijks, IWSR’s president for the US division.

“Consumers reduced their spending on spirits due to the generally higher out-of-pocket cost of a bottle of spirits and began to pivot more towards beer and (ready-to-drink canned cocktails) that cost less on a per-serve basis,” he told CNN in an interview.

“The industry is still coming down from the incredible growth seen immediately post-pandemic.”

Shopping habits

Within that overall trend, according to CNN, shopping habits have changed as drinkers look for extra value from private label products in value outlets.

One that has benefitted is Aldi, the German-owned multinational discount group which sells alcohol in about 2,000 of its US stores.

There, it is enjoying sales growing in double digits, Arlin Zajmi, director of national buying for adult beverages, told CNN.

“For us, it’s been a completely different story,” he said.

“This is how much private labels have come up in the last 10 years. Customers have really seen the value proposition, which is the quality and price.”

More than a quarter of US households now shop at the discount chain — twice as many as six years ago.

Its expansion has “been timed exactly as shoppers are more price sensitive, so an US$8 or US$9 six-pack at Aldi might seem almost revolutionary after drinkers have become used to seeing prices for craft at US$12 and above in large chain grocery stores,” Bryan Roth, editor of the alcohol beverage newsletter Sightlines+, told CNN.

As the drinks business reported earlier this month, wholesaler Costco is also going great guns in the US, with a newly opened store in Napa Valley offering fine wines and spirits at highly competitive prices.

The Napa branch has the biggest wine selection of any Costco store yet, offering more than 174 wine SKUs, almost double that of other Costco stores in the United States.

Fine winemaker Garen Staglin of Napa’s Staglin Family Vineyard hopes the new store will “bring more consumers to the Napa Valley from neighbouring communities and more tourism and winery visits as a result.”

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