2019-06-01_Market_Watch

32 MARKET WATCH | MARKETWATCHMAG.COM | JUNE 2019

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the year prior. Beverage alcohol sales at Costco were $4.4 billion

last fiscal year, marking a 6% increase over the year prior. The

company is one of the largest wine retailers in the world, with

wine making up roughly half of its total beverage sales—more

than $2 billion last fiscal year. Spirits and beer split the

remaining half relatively equally.

Growth And Change

In her 20-plus years working in the beverage alcohol depart-

ment at Costco, Alvarez-Peters has become a fixture in the

retail drinks landscape. Her name frequently appears near the

top of lists naming the world’s most powerful wine and spirits

buyers, buoyed by the success of the program she now manages.

Altogether, Alvarez-Peters has been with Costco for 36 years.

She started in the drinks business in 1995, when she transi-

tioned from the electronics and audio department to become

a wine and spirits buyer in Costco’s Los Angeles regional

office, covering Southern California and Hawaii. She moved

to the company’s Washington headquarters in 2005 when

she was promoted to assistant general merchandise manager

for wine, spirits, and beer, and in 2016 she was promoted to

assistant vice president and general merchandise manager for

beverage alcohol at Costco. She now manages the company’s

11 beverage buyers.

“I’m very much involved with all the beverage alcohol cate-

gories, and my role continues to grow as the business grows,”

Alvarez-Peters says. “I develop strategies with the team and

implement corporate directives; lead the development for

Costco’s private label, Kirkland Signature; and develop and

strengthen our supplier and distributor relationships.”

It’s a big job these days, as beverage sales are growing steadily

at Costco. The company’s beverage alcohol sales increased

by more than the industry average for fiscal year 2018 over

2017, and Alvarez-Peters notes that for the first half of fiscal

year 2019, Costco’s drinks segment is outpacing the overall

industry. “Our sales are growing year over year,” she adds.

“We have new warehouses opening and, as laws have changed,

we’ve been able to add beverage alcohol licenses to some

existing warehouses.”

Last fiscal year, Costco opened 21 new warehouses globally,

including units in California, Michigan, Nebraska, Minnesota,

Florida, Washington, Texas, South Carolina, and Georgia.

Fifteen of those new units sell wine, spirits, and beer, and four

additional new units sell only beer and wine. In all, Costco

has licenses to sell wine and beer in 45 states and spirits in

35 states. Alvarez-Peters says California, Florida, and Wash-

ington are some of the company’s largest-volume states for

beverage alcohol sales and that those markets are still post-

ing strong increases. Additionally, markets like Colorado,

Alaska, South Carolina, Nevada, and Washington, D.C. are

doing well. For this fiscal year, Costco expects to add an

additional 23 locations in the United States and overseas.

New units have recently debuted or will open soon in Cali-

fornia, Maryland, Texas, Iowa, Nevada, Alaska, Florida, and

New Jersey, and later this year the company will unveil its

first store in China.

COSTCO WHOLESALE CORP. AT A GLANCE

1983 in Seattle

President, CEO, and director Craig

Jelinek; chairman of the board Hamilton

James; executive vice president, CFO,

and director Richard Galanti; assistant

vice president and general merchandise

manager for beverage alcohol Annette

Alvarez-Peters

Issaquah, Washington

768 globally, with 533 in the United

States and Puerto Rico

$138.4 billion in fiscal year 2018. Bever-

age alcohol sales totaled $4.4 billion.

Wine makes up roughly half of total

beverage alcohol sales, with spirits and

beer splitting the remainder relatively

evenly.

Costco.com

Costco plans to open 23 locations this

fiscal year. Beverage alcohol is a key

growth engine for the company and the

segment continuously shows steady

sales increases.

Founded

Key Executives

Headquarters

Number of

Units

Annual

Revenues

Sales

Breakdown

Website

Future Plans

Wine trends at Costco are reflective of those throughout the U.S.
market. Red blends (above), Cabernet Sauvignon, and Pinot Noir are
popular domestic offerings, while imported rosés and sparklers, as well
as wines from Italy, Argentina, and Spain, are helping drive growth.