Dive Brief:

• Aldi is turning up the heat on its U.S. growth initiative with plans to increase its assortment of new products in each store by 20%. The focus will be on fresh, artisan and convenience items, including marinated meats, meal starters, baked goods, grab-and-go beverages, ready-to-heat meals and value-added produce.
• The discounter said it’s boosting its fresh assortment by 40% as it refashions its legacy store format. Aldi announced last year it plans to update most of its stores and said this week it’s halfway through that process. The company is also building hundreds of new locations, with plans to grow from 1,800 current stores to 2,500 over the next four years.  
• "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, including organic meats, salad bowls, sliced fruits and gourmet cheeses," said Jason Hart, CEO of ALDI U.S., in a news release.

Dive Insight:

When Aldi announced its incredibly ambitious growth plans last year, it was clear that the discounter aimed to become a major player in the U.S. grocery industry. After 40 years spent building an arsenal of small, unassuming stores, it finally saw its chance to pounce.

Aldi’s small stores and private label products had become increasingly popular with consumers, but it needed a fresh makeover to complete the equation. So the company expanded its produce selection, rolled out new store brands, widened its aisles and punched up its signage in new and existing stores across the country. The plan was to draw new customers in droves and disrupt competitors with an enticing combination of low prices, freshness and convenience.

"Aldi wants to be the company to bring hard discount grocery shopping into the mainstream," Tim Barret, senior research analyst with Euromonitor, told Food Dive last year.

The move is clearly paying off for the company, but it needs to evolve in order to stay successful. Earlier this year, the discounter debuted an updated model that put produce at the front of the store and added an in-store bakery.

Now, Aldi is hitting the gas on product assortment. All of the new items Aldi announced are focused on growth categories and in-demand ingredients. This includes marinated cilantro lime chicken breasts, bottled kombucha, veggie noodles, single-serve guacamole and kale and quinoa burgers. These items should draw new customers to stores while giving existing ones a chance to stop in more often. It also boosts Aldi’s image as a fresh, convenient retailer at a time when both of those qualities are in very high demand.

Across the country, Aldi has become a headache for traditional retailers and specialty players alike. It isn’t a dominant player in any of the markets where it operates, but it has been steadily chipping away at market share in places like California and the mid-Atlantic region. It’s also pushing into new markets like Arizona, with plans to deploy new stores in highly competitive areas.

Most importantly, it’s forcing the competition to lower prices and play on its terms. Walmart, for one, has been locked in a fierce price war with the discounter for months now.

Close rival Lidl, meanwhile, has stumbled in its first year in the U.S., creating an opportunity for Aldi to continue building momentum. At the same time, Lidl’s shortcomings reveal that discount retailing is not a sure bet right now. To stay relevant and continue drawing new shoppers to its stores, Aldi will have to reassess its growth plans regularly and adjust them as needed.