Costco Brewery: Will warehouse club conquer beer market, too?

Posted Feb 4th 2008 6:49PM by Sarah Gilbert
Filed under: Products and Services, Launches, Costco Wholesale (COST)

This Kirkland Signature Hefeweizen is for you!

Already the leading seller of wine in the U.S., Costco (NASDAQ: COST) has applied to sell its own brand of beer. The beer, to be brewed by California crafter Gordon Biersch Brewing Company, will come in pale ale, hefeweizen, amber ale, and lager varieties.

With Trader Joe's-branded varieties of beer and wine already a staple at the parties I attend here in Portland, I wonder if this move will be a major market force in the premium beer market. (Gordon Biersch produces beer for Trader Joe's, already.) All of the big brewers have recently been making forays into premium brews as a reaction to the growing influence of smaller breweries like Sam Adams and Sierra Nevada, as well as the groundswell of regional microbreweries. Craft beer made up 3.6% of the U.S. market in 2006; but had grown by 31.5% over the 2003-2006 period, as opposed to low-single-digit growth in the beer market as a whole.

It is increasingly obvious to a substantial segment of the population that neither Bud nor Miller tastes great. The production of high volume, high quality Costco-branded beer will only magnify that realization and could be a serious challenge to the market dominance the large breweries have enjoyed for several decades. As for Costco? The company's obvious success in wine means it should find an easy time convincing its customers to become regular drinkers of Kirkland Ale and perhaps provide a good avenue for bottom line earnings growth.

Tags: alcohol, beer, cost, costco, hefeweizen, ipa, kirkland, kirkland brewery, KirklandBrewery

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Reader Comments (Page 1 of 2)

2-04-2008 @ 11:00PM

Brockage said...

The monopolies stretch out their arms into yet another area.

2-13-2008 @ 12:28AM

Jim said...

Regarding the "monopolies stretching out their arms", there is no law that says you have to buy their products. It is your free choice. For the same reason, no one makes people buy wine at Cotsco. It is the free choice of consumers to buy there. Your can continue to buy your beer, wine and everything else where ever you want. If enough people buy somewhere else, Costco will no longer be the largest seller of wine.

2-07-2008 @ 8:27PM

ripsnortinroy said...

Wanna good beer? Go to San Fran and get yerself an Anchor Steam. Goes real good with a big ol' shrimp cocktail! (Anchor Steam and shrimp cocktail-dro-o-o-o-o-l-l-l-l!!!!!)

2-07-2008 @ 9:16PM

jim said...

Ban the beer, legalize the weed!!!

2-09-2008 @ 11:05AM

CatMan said...

Well, I'm a "Henry Weinhart" person. Why knock a brew before it's tasted?

2-07-2008 @ 10:05PM

David said...

Costco succeeded not because of monopoly but because they offer top products combined with the best customer service policy in the industry.

2-07-2008 @ 11:20PM

chris said...

I've heard that kirkland vodka is made by Gray Goose...similar bottle, both made in France....any truth to that?

2-08-2008 @ 3:02PM

ron said...

Kirland milk is bad why would Kirkland beer be any better?

2-08-2008 @ 12:11AM

Rob said...

Chris... I work for Costco and yes the Kirkland Vodka is made by Gray Goose

2-12-2008 @ 2:36PM

jgramont said...

I've been writing to Costco about bringing a product they offer in Costco in the UK to the US. So far no luck. Product I want is a 2 can pack of Illy espresso coffee which sells in the UK for about 6 pounds ($12 US). We pay that for just one can of the stuff. If they can get Illy in a 2 pack for the UK market, why not for the US coffee lovers???
It would be a huge market which is what Costco is all about. Of course they never write back no matter what we say in our letters. Sort of frustrating.

2-08-2008 @ 1:43AM

grant said...

Oh yea. Microbrews are hot. What is this, 1996? Bfd! Who cares what costco does; it's not even present in most places in the country.

2-08-2008 @ 5:57AM

jackass said...

excuse me budweiser taste great

2-08-2008 @ 4:38PM

matt said...

Actually the Kirkland Vodka is NOT made by Grey Goose. Costco uses its own distillers to make it. Also Kirkland Vodka is distilled 5 times and the Goose is only distilled 3 times.

2-09-2008 @ 1:07PM

Colorado person said...

Gordon Biersch used to have a micro brewery in the sunset station casino in henderson nevada, and to this day it was the best 3 beers I ever had. For no apparent reason it is not there any more. I only get to go their every 2-3 years so I don't know why it's gone. But it was the best iv'e had.

2-10-2008 @ 1:04PM

Claude said...

German Weizenbier is the best for taste,in my opinion. (thats wheat beer,in English),but it is very fattening. after drinking that,American beer sucks,but I still down a lot of it,because of the price.

2-10-2008 @ 1:13PM

Claude said...

Klares weizen is what they should make,not hefe.better taste.

2-10-2008 @ 7:38PM

jwknight43 said...

I remember "Beer" beer when I was a kid at the local store...If you want to drink decent micro, come on out here to Colorado...I will stack up my guys against that west coast vomit...

Remember you can't get high, unless you are "High"...

BYT, Trippel made by New Belgium is about the tastiest beer I have had...Plus you are sh_tty after 4 beers..

2-11-2008 @ 6:43PM

OhRick said...

I believe your Rocky Mountain high comes from something else?

Firestone-Walker brewery in central California is the number one mid-size (Micro) brewer in the US, and they have the medals to prove it!

A better Pale Ale you would be hard pressed to find.

I also enjoy Sierra Nevada Pale Ale, and Full Sail Pale Ale from a small employee owned brewer in Oregon. (Sold through Trader Joes)