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ALDI has generally been known for keeping its presence in the media minimal, which as a result, has created a certain level on interest into how things are run at the ALDI headquarters. ALDI’s mission is to help shoppers live richer for less, but just how is that achieved?
Have you ever wondered how ALDI decides what goes on shelves and how suppliers can get their products in front of the ALDI buying team? Well in the following interview ALDI Buying Director, Jason Bowyer, reveals all.
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drinks trade: As Buying Director for ALDI, are you always on the look out for new products?
Jason Bowyer: We are consistently looking at trends and innovations, to ensure our offer is in line with consumer demand.
We partner with a number of high calibre international and Australian suppliers who share our passion for quality and help cater to our expanding range of products.
DT: Are there any liquor products or categories that ALDI isn’t interested in stocking?
JB: ALDI stores that operate with liquor licences, dedicate a small area – approximately one quarter of the size of a standard bottle shop – to offer a select range of Australian and international beer, cider, spirits and wines, including French Champagne.
The limited space means that our range is tight, focused and is very user friendly for our shoppers. This helps eliminate complex decision making, which a bigger range might result in. Overlayed in this model is a desire to offer products that are high quality. So whilst we might only have one chardonnay at $10, we ensure that it’s a very good chardonnay at that price and where possible, awarded.
In addition to our stores, our online store (aldiliquor.com.au) is able to house a broader variety of brands that each meet the expectations of our customers – premium taste at an affordable price.
DT: How can brands and suppliers get products in front of you?
JB: We are interested in building long-term, sustainable partnerships with our Australian and international suppliers.
The size of a supplier is no barrier when it comes to producing ALDI’s exclusive brands. Some of our suppliers are smaller specialist producers, while others have much larger operations and produce some of Australia’s well-known household brands. No matter the size, their relevance is equal.
Our business model is focused on exclusive brands as part of our everyday Core Range. Outside of our Core Range, we run both Seasonal and Special Buys programs. Again, a limited tight offering is available and promotions must be in line with our values of outstanding everyday value, but in these programs suppliers can engage with us with branded products.
DT: What are absolute no-nos when pitching a product to you?
JB: The ALDI brand is focused on high value, quality products for its customers. Whether it be for our Core Range, Seasonal or Special Buys lines, the offer must convey these values. We do not compromise on quality and make it our mission everyday to consistently improve the value offering.
The absolute no-nos are poor quality, low grade products at uncompetitive pricing. Our exclusive brands are benchmarked to be equivalent to, if not better than, market leading brands. So while they are offered at a discount price, they never compromise on quality.
DT: What does a product need to have for you to want to take a further interest in it and ultimately taste it?
JB: As far as tasting it, we are committed to tasting and sampling every product that is presented to us. Often that is how you discover the gems. Further, we are happy to convey feedback to the supplier once tasted.
Gaining the interest is very much dependent on the quality of the product, its value and whether that product has a strong sales proposition to our customer. Consistently reviewing our range is critical in recognising where the gaps are.
DT: Does format and labelling influence your purchase decision?
JB: Our purchasing decision is guided by market trends and high quality products at permanently low prices. If the format meets the needs of our customers, ultimately this will make our decision.
DT: When it comes to tasting a product, what are you looking for?
JB: Suppliers must be able to consistently deliver a high quality product. Our product specifications are benchmarked against market leading brands. A $10 wine at ALDI should drink like a $20-$25 wine and we are constantly trying to deliver this formula. We believe this is achievable, as we work on lower margins and work harder with our suppliers around building quality. We believe if the customer wins, both the supplier and ourselves win.
DT: Generally, how long would ALDI want to stock a product on shelves?
JB: The length of time ALDI stocks liquor products depends on seasonal purchasing patterns and overall sales performance. For example, around spring racing and Christmas, we might ensure that we have a few additional sparkling wine SKUs on shelf. In summer, you’ll probably find a slightly wider selection of white wines in stock than red, and the reverse pattern during winter months.
In addition to this, we are loyal to our suppliers. We are passionate about long-lasting relationships with high-volume, timely and consistent orders helping their flow of income. The majority of ALDI’s exclusive brands are sourced from Australian manufacturers.
DT: ALDI offers customers product at incredible value. How is this achieved?
JB: Our business model has been streamlined over many years, which allows us to keep prices low and deliver hard to beat value. We eliminate costly extras and overheads that have an effect on price, (for example we only select the best products in each category), we drive volume and efficiencies, and we pay our suppliers faster than our competitors.
We don’t spend a lot on display, POS or loyalty programmes and we don’t give out plastic bags, instead encouraging customers to recycle. Our logistics and supply chain is extremely efficient, which ensures additional cost savings. We have a very simple, uncomplicated model that is committed to customer value, and we don’t compromise on that.
DT: Are there any ranges that you’re looking to increase or innovate coming up to Christmas?
JB: Our product range is planned well in advance of key events throughout the year. For Christmas 2014, we have introduced special Seasonal lines and brought back popular lines, including premium French Champagnes – Monsigny Premier Cru Brut ($29.99), as well as a selection of red and white wine options, such as Vinatero Wairarapa Pinot Noir 2013 ($14.99).
DT: Do you have any other words of wisdom to suppliers and brands when approaching ALDI for buying?
JB: ALDI Liquor needs a broad range of high calibre Australian suppliers to help cater to our expanding range of products. We are interested in forging long-term, sustainable partnerships with all our suppliers, and want them to be as passionate about quality as we are.
Engage with us, communicate, think laterally and think long-term, as the market is changing.
