Beer industry trends have been largely discouraging lately, but one retailer – albeit a mostly private label one – is bucking them.
“We are crushing it in beer right now,” Aldi director of buying for adult beverages Arlin Zajmi told Brewbound. “We know what the industry is doing and how the industry is, but we actually have doubled our business in the last two years from an assortment perspective, and really a space perspective as well, and getting there from a store count too. Beer has been really a hot category for us.”
Beer sales at the discount grocer have “been growing over 100% almost across the board,” Zajmi added.
About 2,000 of Aldi’s 2,300 stores sell beer, and 1,800 sell wine; none sell spirits, Zajmi said. Last year, 1,700 stores sold beer and 1,600 sold wine. The company is on pace to open 800 more stores in the next five years.
Aldi primarily sells private label offerings. Its beer portfolio now includes 16 items, up from eight in the past three years, with most new styles added last year. In addition, Aldi introduces limited-time offerings throughout the year.
“Every three months or so, I bring seasonal items into the assortment on top of our 16 everyday products,” Zajmi said.
In early October, Aldi will roll out new holiday beers: State of Brewing Holiday Ale (5.6% ABV, $7.99) and State of Brewing Chocolate Peanut Butter Porter (6% ABV, $8.99). Both are available in 12 oz. can 6-packs.
Both beers won their spots as seasonal offerings after taking the top places in a consumer poll stemming from Aldi’s 2023 Beer Advent Calendar, Zajmi said. The Advent Calendar, a 24-pack with 24 different 12 oz. cans, is on hiatus for 2024.
Asahi-owned Octopi Brewing produced both Holiday Ale, which features cinnamon, nutmeg and ginger, and Chocolate Peanut Butter Porter for Aldi this year, as well as all 24 styles in last year’s multi-pack, Zajmi said.
“From a flavor perspective, those guys are the best – some of the best beers I’ve tried when it comes to flavoring,” he said. “They do a really, really nice job.”
Aldi’s fall seasonal beer offerings are “off to an incredibly fast start,” Zajmi said. The fall collection, which launched earlier this month, includes Oktoberfest Festbier Lager (5.5% ABV), State of Brewing Pumpkin Ale (6% ABV) and State of Brewing Pumpkin Pie Cider (5% ABV).
Aldi is far from alone in finding success in private label beer. In the 52-week period (L52W) ending August 10, private label beer category dollar sales increased +122.1%, to $5.4 million, according to data from market research firm NIQ provided by 3 Tier Beverages consultant Mary Mills. Segment volume, measured in case sales, increased +143.4% in the period.
Those trends have moderated in recent periods, but are still positive. Year-to-date, private label beer dollar sales have increased +76.1%, Mills said. In the L4W, dollar sales increased +7.7% and volume +6.9%.
However, private label beer is by far the smallest of all three major bev-alc categories. Private label wine is the largest, with dollar sales of $233.2 million in the L52W (+7.2% year-over-year). Dollar sales of private label spirits have declined -1.1%, to $113.6 million in the L52W, according to NIQ data from 3 Tier.
Private label retailers’ investment in quality and innovation in their bev-alc products hasn’t gone unnoticed by consumers, Zajmi said.
“We’re working with brewers that sell beer and sell big brand beer to them,” he said. “We’re just packaging them to a different brand. So I think a lot of consumers are realizing that, and then ultimately they love the price. They’re loving the equation of the quality and price.”