EXCLUSIVE: ALDI’s R&D Process for Functional Beverages
The private label beverage segment continues to surge, reflecting the simultaneous trends of category innovation, consumer demand for variety and shoppers’ quest for value. According to a recent report from the Private Label Manufacturers Association, dollar sales of store brand beverages rose 4% on a year-over-year basis, outpacing several other categories.
These converging drivers have ALDI in a good spot, as the value-centric retailer continues to grow its footprint and traffic while investing in store brand product development, including in the hot segment of functional beverages. Progressive Grocer recently talked with Michael Mache, ALDI’s director of national buying for non-alcoholic beverages, about the launch of new lines in this space. The items are available just in time for the warm weather season and the debut comes as major brands, including PepsiCo and Coca-Cola, are getting into the prebiotic soda market.
Progressive Grocer: How long did ALDI prepare to launch Summit Popz, Summit Waves Energy and PurAqua Hydration Sticks? Can you share more about the R&D process for these products?
Michael Mache: We developed Summit Popz, Summit Waves Energy and PurAqua Hydration Sticks with a clear goal to bring high-quality, functional beverages to shoppers at unbeatable prices. Each product was in development for nine months or less, a pace that speaks to our ability to quickly respond to trends and deliver private label innovations.
Even though we move fast, we take the time to get it right. We rigorously test every product, sampling 35,000 items annually to bring only the best to our shelves. Once we determine a product is good enough to take home to our own families, we roll it out to our shoppers. We never want our shoppers to wait longer than they have to for the latest flavors and hottest products at prices that don’t break the bank.
Our R&D process is simple: We leverage our private label expertise and work hand-in-hand with trusted suppliers to develop products that meet or beat national brand quality while saving shoppers money.
PG: How have these products been received? How do you feel they’re positioned for the future, as this category continues to soar?
MM: Shoppers are loving these new additions to our “better-for-you” beverage lines, proving the desire for high-quality, functional beverages without the premium price point.
Summit Popz taps into shoppers’ growing thirst for prebiotic sodas, offering a better-for-you option that delivers taste, quality ingredients and value. We’re selling nearly 20,000 cans of Popz every day, and what’s more, we’re starting to see shoppers reach for ALDI private label at nearly the same rate as they do the national brand. That’s a huge win, given the product has only been on shelves for nearly four months, and it further proves that shoppers are not just trying these products — they’re coming back for more.
Looking ahead, ALDI is well positioned to continue leading in this space. The demand for functional beverages isn’t slowing down, and we’re nimble enough to introduce new innovations faster than national brands. We’re confident these products will only continue to gain new momentum as we release more flavors, pack sizes and nutrition formulations in the months and years to come.
PG: How pivotal is package design in this beverage segment in particular?
MM: As we work to become the most sustainable grocer in the country, we’re always looking for new ways that we can reduce unnecessary waste through sustainable packaging across all our private label products. In the beverage category, specifically, we’re actively testing new packaging methods to help us meet our broader sustainability goals. For example, we are using recyclable cardboard overwraps for our multi-pack items instead of the traditional plastic rings seen with legacy beverage brands. We plan to use this packaging on several new products in our pipeline, and we are also testing out canned water bottles at our checkouts as an alternative to traditional plastic water bottles.
PG: Why was it important to launch these functional beverages in different product formats? How did variety, value, taste and convenience factor into that decision?
MM: We wanted to do more than compete in the functional beverage space – we wanted to shape it. Launching Summit Popz, Summit Waves Energy and PurAqua Hydration Sticks within a few months of one another was an intentional decision to get out ahead of the market with a range of offerings we knew our shoppers wanted.
Each of these options was selected to fit our shoppers’ needs – whether it’s a vitamin-packed energy boost, a better-for-you soda alternative, or an easy way to stay hydrated on the move.
[RELATED: Why Consumers Are Gravitating Toward Energy Drinks]
And, of course, value and quality are at the center of every product we introduce. After all, if no one drinks the beverages you bring home, are you really saving any money? With this line, ALDI continues to deliver high-quality, trend-forward options at prices that national brands can’t match. By working directly with our suppliers and employing small-but-mighty store strategies, like our quarter cart system and displaying products in the boxes they arrive in, we keep quality high and prices low as we pass cost savings back to shoppers.
PG: Is ALDI planning to launch any limited-time or seasonal additions to these lines?
MM: Yes! We’re already looking ahead to the next big thing on shoppers’ minds when it comes to functional beverages. I can’t share specific details quite yet, but shoppers can look forward to seeing new and exciting Summit Popz, Summit Waves and Pure Aqua Hydration Sticks flavors on shelves in the months to come. Thanks to our in-house trend team and strong supplier relationships, we can keep our assortment fresh and bring exciting flavors to shelves in-line with shoppers’ preferences faster than the competition.
PG: How and why these items fun to bring to ALDI shelves?
MM: Developing trendy, better-for-you items has been an exciting journey for ALDI as we are reinventing how the market views private label beverages. While traditional private label beverage items such as soft drinks or sparkling water continue to grow with popularity at ALDI due to their quality and value, we are taking the ALDI beverages private label assortment to the next level with trendy, market leading innovation at incredible value. The exciting part is that ALDI is just getting started and cannot wait to share more future innovations with customers.
