I can sometimes have a vivid imagination, but I did not make this up. This is something that came out of a CNBC special “The Costco Craze: Inside the Warehouse Giant.”
In that program there was an interview with Annette Alvarez Peters who is Costco’s principal wine buyer. She said “Is (wine) more special than clothing, is it more special than televisions? I don’t think so.” And, in response to the questions – “Certainly it’s different than toilet paper? Or different than tin foil?” – she replied “Why?” The response was “Because it’s personal.” And, she said “People can look at it that way. But, at the end of the day, it’s just a beverage.” I saw this reported in a newspaper article. That article goes on to say that “The backlash was immediate and severe.” (To read that article click here)
Say what? Immediate and severe backlash? Gimme a break! Costco sells great products at great prices. My involvement with the company goes back to the company that preceded Costco. It was founded by the late Sol Price and was named Price Club. The first store was in San Diego and I visited that store in the 1970s driving over a 100 miles to get there. Later two executives, Jim Senegal and Jeffrey Brotman, left the Price Club to form Costco. A number of years later Costco bought the Price Club stores and renamed them all Costco. Last year I did an article on pre-selected wines purchased mail order from the Wall Street Journal. I then purchased other wines in the same price range from Trader Joe’s and Costco. In that article I also detailed the historical background of Costco and Trader Joe’s and my involvement with the companies. The conclusion of the tastings was that Costco offered the best wines for the money. (To read that article click here)
So I must say I agree with Ms. Peters. Wine is just another food product. It is a beverage to be enjoyed with other foods. Those who seek to make it something that is unfathomable to the average consumer get nothing but disdain from me. There is no reason for wine to be complicated. I love wine, but I am first and foremost a consumer. The Underground is dedicated to the consumer. (To read one of my recent articles on this subject click here)
Without question, Costco is dedicated to bringing the best products to people at the best prices. They have intense competition, but have emerged as the #1 wine retailer in the U.S. with annual wine sales of over $1 billion and the 6th largest US retailer overall. And, with a very low cost structure and very disciplined pricing where nothing is sold at more than a 15% mark up over cost, their prices are hard to beat.
So wine to Costco is another product like all of the products they sell. Their goal is to sell the best products at the best price. In the case of wine, that includes everything from classified growth Bordeaux wines such as Petrus and Mouton Rothschild (Costco is the #1 importer of wine in the U.S.), to private label brands (Kirkland Signature) sourced for them from all over the world, and a wide variety of other wines in all price ranges. In the case of toilet paper that includes the Kirkland Signature brand and national brands. My wife and I shop at Costco at least once a week. We buy a wide variety of products there. And, yes that includes wine and toilet paper. So what do wine and toilet paper have in common? Nothing! Except that we buy these and other products — fresh produce, fish, household goods, business supplies, clothes, plants, dog food, and almost anything else you can imagine — regularly from Costco and have been doing so for over 30 years. We are always pleased with the quality and value. That’s why we keep going back. What’s not to like about that?
In Vino Veritas,