Batavia, Ill.-based ALDI, Inc. creates a captive candy and snack audience through its purposeful store layouts and a blend of well-known name brands and private label products at recession-friendly price points.

Aldi’s private label Choceur and Moser-Roth chocolate brands share shelf space with mainstream products such as Snickers and Kit-Kat in its stores.

ALDI shoppers might not put candy and snacks on their lists before heading out for groceries, but then again, they don’t have to. ALDI reminds them. In fact, candy and snacks are the first and last items customers will find at the company’s 1,000 stores nationwide, including its 17,000-sq.-ft. State St. location in Geneva, Ill.

Upon entering ALDI with their rented shopping carts (the retailer charges a refundable deposit of 25 cents), customers immediately enter the first wide aisle to find an array of chocolate and non-chocolate products as well as fruit snacks and salty snack items, neatly displayed in cardboard shipping cartons and clearly labeled by brand and price.

It’s an impulse purchase paradise.

The impulse to purchase continues at the checkout, where candy and snack items are stacked to the nines. Most shoppers cannot help but stray from their intended lists at the sight of so many products, several of which cannot be found at any other supermarket chain.

That’s because at ALDI, national name brands such asSnickers,M&M’S,Starburst,Kit-Kat,Werther’s Original,Skittles,Milky WayandReese’s share shelf space with lesser-known (at least, to those who don’t frequent the discount grocer) private label brands.

Among them are two chocolate lines.Choceur, ALDI’s value-priced chocolate brand, consists of bars in dark chocolate, milk chocolate and milk chocolate with almonds profiles; large bars in Fine White Chocolate, Raisins & Nuts, and Coffee & Cream varieties; and mini chocolate bars in four flavors, including milk chocolate with a strawberry yogurt crème filling.Moser-Roth, ALDI’s premium line, features resealable bars in milk chocolate as well as two dark chocolate options: 70% and orange & almonds.

Although Mars and Hershey loyalists would be hard-pressed to find a more affordable destination for their favorite confections, they’d also have difficulty ignoring the competitive pricing assigned to ALDI’s attractively packaged private label offerings. In some cases, competing brands go head-to-head. For example, further down the candy and snack aisle,Haribo Gold-BearsandHaribo Happy Cola gummi candy sell alongside ALDI’sMystik brand gummi bears; the latter offers an extra 7 oz. for 40 cents more.

These items are followed by a lengthy lineup of additional non-chocolate candy and snacks from ALDI brands:Southern Grovenuts,Corntown microwave popcorn,Simm’s beef jerky,Cambridge cheese and crackers,Mercer animal crackers,Belmont cookies,Grandessa gourmet cookies,Baker’s Treatbaked goods,Chazoo fruit rolls … the list goes on.

Then there’s ALDI’s health-consciousFit & Active brand, which is composed of rice cakes, rice snacks, microwave popcorn, trail mix, dried fruit and devil’s food fat-free chocolate cookie cakes as well as 100-calorie packs of baked chocolate chip wafer snacks, for example.

“We just recently started including GDA guidelines amounts for an additional layer of transparency and readability for shoppers,” points out ALDI U.S. spokesperson Martha Swaney.

Although sales of time-honored mainstream brands thrive under ALDI’s low everyday prices, they don’t always beat out the private label competition. Some customers actually prefer ALDI’s signature offerings, according to Geneva, Ill., store manager Steve Cooley.

Choceur andMoser-Rother“have built quite a following of customers who come here specifically for them,” he says. AlthoughChoceur outsellsMoser-Rother, the two attract different consumers given the different price points, Cooley adds.

All in all, “about 1,400 of the most frequently purchased items are under our brand names,” Swaney says. Those purchases include items in the two chocolate lines ALDI is looking to expand, which Swaney hopes will continue “to be a factor in bringing shoppers in.”

ALDI Shopper Profile

Just who is the average ALDI customer?

“We’re seeing new shoppers enter our doors each day,” Swaney says. “It’s typical for us to attract new customers during an economic downturn, though in each of the three major recessions we’ve experienced in the last 30 years, those shoppers tend to stay with us for the long term when they realize inexpensive can be great.

“We find that new shoppers may try us for our prices, but they stay with us for the quality,” she concludes.

According to Cooley, the typical shopper at the Geneva location is middle to upper-middle class, and one who increasingly looks for specialty items. The current economy is definitely driving the expansion of its clientele base, Cooley says, resulting in “a broader spectrum” of customers.

Ultimately, ALDI attracts “for shoppers from all walks of life,” Swaney says.

Trending Upward

Said shoppers are in tune with the trends, and ALDI knows it. While some of its private label items compete directly with national name brands, others are completely original products based on research by the company and its vendors.

“We closely monitor trends in the industry and work with suppliers to ensure our selection reflects current trends,” Swaney explains.

“For example, some trends we’re seeing develop include sugar-free, gluten-free, Free Trade, free from artificial colors/flavors, and organics,” she notes. To that end, ALDI soon will produce a sugar-free “Special Purchase” item.

Throughout the year, the company offers a variety of what it calls “Special Purchases” in every sales category, including candy and snack, set in a designated area toward the back of its stores.

Special Purchase candy and snack offers run especially rampant during the holiday season, during which items such as chocolate Santas and ornament bells, and chocolate-covered pretzels appear, Cooley says.Choceur truffles were an addition to ALDI’s 2009 Valentine’s Day selections, Swaney adds. Based on their success during trial runs, Special Purchase items sometimes become everyday items.

The Big Private Label Picture

It is everyday items that are driving growth at ALDI, particularly in this economy. It’s been widely reported that the current recession will forever change the way consumers spend, and ALDI is positioned to take advantage of that change by giving shoppers what they want and need: quality products at affordable prices.

“Offering high quality at high value (significantly less than our competitors) really sets us apart,” Swaney says. “ALDI’s select brands are manufactured by many of the nation’s leading food producers, and in our test kitchen, we ensure our products meet or exceed the quality and taste of the national name brands.”

It’s no secret that sales of private label brands have really picked up the pace. Swaney points to a July 2008 Information Resources, Inc. report that says 33% of shoppers are heavy private label buyers versus 28% in 2007, and 50% of consumers purchased private label products over the last six months. And that’s cause for expansion at ALDI.

An Environmental Expansion

ALDI isn’t new to the grocery channel, but it is gaining momentum. Iowa City, Iowa, was the site of the chain’s first American store, back in 1976, and it has continued to expand its presence in the Midwest and on the East Coast since then. Last fall, it entered Florida. This past spring, it took to Massachusetts. And in spring 2010, it will hit Texas. ALDI opened another new store in Plainfield, Ill., in May, and plans to launch additional Chicago locations later this year.

“ALDI has grown steadily and organically since we first opened in the U.S. in 1976,” Swaney says. That growth has been fueled by consumer demand, she adds. “We opened about 100 new stores in 2008 and are planning to open 80 new U.S. stores in 2009” - that’s compared to an average of 50 new stores in recent years, Swaney notes.

The Geneva store, which opened in January of 2008, is one of ALDI’s newest locations, and it shows. Older stores feature drop-tile ceilings and four aisles as opposed to the now high, airy ceilings and five-aisle format, which allows for more facings. User-friendly signage and spacious aisles also characterize the brightly lit interiors.

So does the new signage. Both first-time and frequent shoppers are sure to notice the use of colorful, easy-to-read signs throughout the company’s stores. “Unbelievable Quality” and “Incredible Savings” are “Guaranteed” to customers at ALDI. “Fresh,” “fun”, “smart” and “cool” are among the words used on other postings.

The pointed verbage continues at the checkout, where five large bulletin boards convey ALDI’s retail message to customers. “Fancy stores have fancy prices. Keep it simple and save,” one reads. “The bagging is up to you. The low prices are up to you,” another states.

Not only are the new stores easier on the eyes, but they’re also easier on the environment. Energy efficient LED lighting and refrigeration are among the updates helping ALDI to reduce its carbon-footprint.

Speaking of footprints, because ALDI stores are smaller than most supermarkets (focusing on high-volume items helps the company cuts down on the cost of items that don’t move as much), it uses fewer utilities, as well. By reducing operating costs, the company can pass the savings on to its customers in the form of lower prices, Swaney explains.

Ultimately, ALDI now offers “the same great quality and untouchable prices that we are known for” but in a “brighter, fresher, more welcoming,” package, she notes.

The environmentally conscious story continues at the checkout, where ALDI encourages customers to purchase reusable “Eco” bags for $1.99 each. Those who choose not to reuse can purchase plastic or paperALDI brand bags for 10 and 6 cents, respectively. ALDI also offers 99-cent insulated bags.

It’s at the checkout that consumers get a real sense of the ALDI experience. Friendly cashiers, overseen by Cooley, keep customers coming back. Each store is operated by 10 people in total, but can be run by three to five at a time, Swaney says - another efficiency on the part of the discount chain leader. By asking shoppers to rent and return their carts to the corral for a refund, ALDI spares one less employee in the parking lot, as well.

That’s after customers have fed their impulse to purchase more candy and snacks at the register, of course. They may not be on the list, but they’re hard to resist at ALDI’s prices.