Dive Brief:

• Aldi has once again been recognized as a fan favorite for its private label products in marketing firm BrandSpark International's 2019 Best New Product Awards. Award winners are determined by a national vote among 10,000 shoppers.
• Aldi won nearly half the awards in BrandSpark's Food & Beverage category, receiving nods for its private label children’s snacks, fruit snacks, hummus, juice, milk, protein bar, ready-made salad kits, snack bars, specialty dairy drink and vegan burgers.
• Trader Joe’s had the second highest number of items on the winner's list, earning three awards for its fresh chicken product, pasta and pastry item.

Dive Insight:

Aldi has been acknowledged repeatedly for its winning assortment of private label items. This is the second year in a row that the German discount grocer has dominated BrandSpark International's Best New Product Awards, and the company also won recognition for its products last month from Kantar Consulting's Product of the Year survey. In 2018, Aldi won more than 400 product awards across the industry.  

The grocer has been boosting its assortment of new products at a fast pace, with a particular focus on fresh, artisan and convenience items. Last year, the company expanded its produce selection by 40% and added more grab-and-go items. Its Park Street Deli Greek Feta Salad, Little Salad Bar Bowls, Little Salad Bar Pineapple and Watermelon Spears were among the BrandSpark winners, showing that this strategy has been attractive to shoppers.

Building up its private label inventory is key to reaching a younger, cost-conscious target. Aldi’s expanded selection of organic, gluten-free, vegan and vegetarian offerings and its line of wine appeal to customers in the desirable millennial and Gen Z demographics, who tend to look for sustainable, quality products that are also budget-friendly. Plus, the diversity of items in Aldi’s arsenal makes it easy to experiment with new foods and flavors — another behavior those key demographics enjoy. 

Private label products are expected to outpace branded products and capture 25% of grocery dollars in the next decade, according to CB Insights. Not only do they cost less for consumers, but they’re good for the retailer too. It is easier to control the cost and distribution of private labels, and retailers can benefit from a 25% to 30% higher profit margin on store brands than from manufacturer brands. In 2017, U.S. private label food sales grew three times faster than those of national manufacturers’ products.

BrandSpark’s American Shopper Study, the companion piece to the product awards, found that 75% of shoppers say they try new products from the brands they trust most. This could translate to a big business boost for Aldi, which is quickly gaining loyal shoppers. A survey by Morgan Stanley recently found that one out of every five shoppers who recently switched grocery stores chose Aldi, which is getting more new shoppers than Costco, Target, Kroger and Amazon.

The shopper survey also found that healthy, convenient foods resonate best with American shoppers. Six in 10 people would rather find healthy swaps for their favorite foods than cut them out of their diets, and about half of shoppers believe there are not enough convenient and healthy packaged foods. Roughly 73% say they are looking for new products that make their lives easier.

There is one cautionary note from the BrandSpark survey: Consumers say they are increasingly challenged to keep up with all the new products on the market. About 42% say there are too many new items to keep up with — up from 34% last year. Retailers may run the risk of giving customers too many choices as they try to offer options for every taste and lifestyle.