The Real Reason Aldi's Milk Is So Cheap

Aldi's milk isn't cheap because the company's buyers are savvy negotiators. Like all commodities, the price of milk is dictated by supply and demand, and the market price of milk has been hit badly by a falling demand for cow's milk, which has lasted several years. In 1984, milk represented 15 percent of the food and drink consumed during any meal, but by 2019, that share dropped to just 9 percent (via CNBC). 

Beyond the low market value of milk across the board these days, another key factor that dictates prices is the retail markup that stores add to the base price of milk. This markup helps retailers cover the cost of doing business, because it factors in rent, utilities, labor, costs, and insurance (via The Balance Everyday). This also explains why a gallon of milk is pricier at more exclusive groceries like Whole Foods (where the company puts more money into the shopping experience), and why Aldi's low-cost business model has a significant impact on the price of its milk compared to its competitors. In 2019, a price check by editors at Cheapism showed that a gallon of 2 percent milk cost $2.48 in Walmart, and $1.49 in Aldi.

So thanks to low bulk milk prices and Aldi's streamlined, no-frills shopping experience, Aldi is able to offer us good milk for as much as a dollar less than competitors — all without compromising its bottom line.