Why that’s not a $5 wine you’re drinking from Aldi

ALDI is leaving nothing off the shelf in its battle to win more shoppers. Here’s how the chain brings quality to the market at the lowest price possible.

ALDI is famous for its seemingy crazy mix of products — treadmills, next to garden supplies and down the aisle from ready-made meals. It’s enough to leave many shoppers scratching their heads.

But it’s the price of its wine that raises another question. How does the chain sell a bottle of Australian wine for less than a salad sandwich? And is it any good?

Enter, Jason Bowyer, the chain’s specialist wine buyer who, since starting in 2010, has been intent on changing the idea that cheap means nasty.

Since venturing in to the land of liquor in 2003, the German supermarket chain says it is growing its wine business at 10 times the industry rate.

Jason makes the trip to Central Victoria at least twice a year to visit the Aldi winemakers and growers. Picture: Vanessa Brown

“We’re bringing wines in to price points where typically there isn’t that availability in the market,” Mr Bowyer said.

“Our sav blanc, which is from the Central Victorian region, sells for $5. Now, you can’t go to another store and get a sav blanc from Central Victoria for $5. It’s not about devaluing the wine portfolio, it’s about giving consumers a price point where they actually want to trade up, and that’s a real driver for us.

“The Aldi index is in ‘newbies’ or younger consumers that are coming in to wine, and for that reason they buy a $5 bottle. They have a great experience and say ‘right, what’s next’ and they trade up. There is a real comfort about the fact they can do that on their weekly shop.”

Aldi’s Turdor pinot noir has received three bronze awards from various international wine shows this year alone. Picture: Vanessa Brown

Mr Bowyer has the tough job of scouring the country for the best drop. The chain has relationships with winemakers in the Yarra Valley in Victoria, Margaret River in Western Australia, as well as McLarenVale and the Barossa in South Australia.

The products are made by award-winning winemakers across the country, although for contractual reasons, Aldi prefers to keep these relationships confidential.

“We know we are never going to sell a wine for $5 that should be $50, but we can give people [who shop at Aldi] a red hot deal and get a red hot wine for $5 that could cut around $15,” one of the highly acclaimed winemakers in the Yarra Valley region said.

“Look at our Rose, which was the top pointed wine at the Perth show. We sell it for $4.99, but just because it’s a $5 wine does not mean it’s a $5 wine. It’s a $12 or $13 dollar wine that’s been made really well, has picked up awards, but we sell it for $5,” Mr Bowyer continued.

The secret behind the price lies in the German company’s business model.

“If you take a traditional winery, they have to embed in the cost of the product, sales teams, marketing, the overall cost of running the winery, promotions — they all step up in the make-up of the product,” Mr Bowyer said.

“Then you have the retailer’s margin over and above that. Now those retailer margins are often a lot more than we would work off in a margin, so I think that tends to inflate the product right up.”

Some of the award-winning wines on display in the Yarra Valley this week. Picture: Vanessa Brown

Australia’s supermarket war continues with Aldi adding an additional 120 stores across South Australia and Western Australia and upgrading stores for a more premium look and feel.

But overcoming the negative mindset around cheap wine is a constant challenge.

“Consumers expect to come to Aldi to get great value. We can reinforce that value and that quality by winning gold medals, by being consistent year on year, by getting support from wine writers and various people in the trades who talk about our wines,” Mr Bowyer said.

“It takes time to educate the consumer. You start off with a slow burn, and then it gets stronger and stronger and stronger.

“All those things come to help communicate to a consumer that ‘do you know what, I don’t actually have to spend $15 on a bottle of wine to get a really terrific wine, I can go to Aldi to get that wine for half the price and it’s just as good,” he said.

Some of the wines available within Aldi stores, and rated among the best at the Sydney Wine Competition. Picture: Supplied

“In terms of wine buying, 95 per cent of consumers who buy wine feel intimidated. It’s only about 5 per cent who understand wine,” one of the winemakers said of the company model.

“The range at Aldi is quite restricted, and not the range you will get if you go in to one of the oppositions and you walk in to a wall of sauvignon blanc and think ‘how am I going to choose?’”

“With Aldi, we like the range and its size because it’s relevant and pertinent and the consumer isn’t confused when they go to buy wine.”

The reporter travelled to the Yarra Valley as a guest of Aldi.