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Aldi’s Fresh Product Expansion Fuels U.S. Store Growth

Aldi is launching a new product expansion to emphasize fresh, organic and easy-to-prepare options, with plans to make 20% of products in every store new compared to last year. To achieve this, the company is investing in a remodel that features additional refrigeration space to accommodate more fresh and convenient products.

The U.S. product rollout will continue through early 2019. As part of the expansion, Aldi is increasing its fresh food selection by 40% with new items.

“The continued success of our store expansion and remodel initiatives has given us the opportunity to carefully select and introduce new products that satisfy our customers’ increasing preferences for fresh items,” says Aldi U.S. CEO Jason Hart.

Fresh and healthy products will include more ready-to-cook and organic fresh meats, as well as an expanded produce selection featuring veggie noodles, ready-to-eat sliced fruits and more organic options. The company’s expanding Earth Grown line has new vegan and vegetarian options, such as kale and quinoa crunch burgers, and chickenless patties and tenders.

Grab-and-go items and easy-to-prepare foods will be an emphasis for the retailer as well. Expanded refrigeration offerings will include single-serve guacamole and organic hummus, fresh fruit and vegetable snack packs, fresh organic salsa, antipasti salad, gourmet olives and calzones, more refrigerated drinks like strawberry kefir and kombucha will be featured. Meal starters like quinoa bowls and premium pasta sauces, as well as vegetarian options, like meatless hot dogs and sausages, will be available.

Baked goods, like white and whole wheat pita breads, sourdough loaves and gluten-free bagels, are in the works, while Aldi will expand its selection of private-label milk alternatives in the U.S. with the addition of organic almond milk, coconut milk, and lactose-free and soy milk.

Aldi is making these changes amid a large-scale upheaval of the U.S. grocery industry, which has seen new players like LIDL, Aldi’s largest international competitor, come onboard and Amazon’s purchase of Whole Foods. With all this in mind, the German retailer is spending $1.9 billion to remodel existing stores to make space for its new products expansion and another $3.4 billion to build 800 new ones over the next four years, reported Business Insider (Aug. 9).

The store growth has put Aldi on track to become the third-largest grocer in the U.S. by store count, behind Walmart and Kroger, by 2022.

The retailer doubled sales in the last five years, and expects to double sales over the next five years, says Hart.

However, Hart claims the fresh product refocus and store remodeling plan aren’t a response to Lidl’s entry into the U.S. market. He pushes back on the idea that Whole Foods is a bigger threat to Aldi now that it’s owned by Amazon, noting Aldi competes more directly with traditional supermarkets like Walmart and Kroger.

Aldi believes its model is superior to that of traditional supermarkets in terms of providing better value for consumers and giving them a simpler, easier way to shop for groceries. The company’s stores are designed to cover the majority of the consumer’s needs on their grocery list in about a fifth of the size of a traditional supermarket, Hart says.

Aldi stores are about 12,000 sq.-ft., compared to Walmart stores at about 100,000 to 180,000 sq.-ft. and Kroger’s stores average about 80,000 sq.-ft.

For the full story, go to this week’s Food Institute Report.