34 MARKET WATCH | MARKETWATCHMAG.COM | JUNE 2019
PH
OTOS^ COURTESY^OF^CO
STCOselections vary from warehouse to ware-
house to closely match our demographics.”
Rare imports and hard-to-find beverage
products are also a priority. Alvarez-Peters
points to Japanese whiskies from Yamazaki
and Hibiki, as well as a line of Napoleon
XO brandies from Aiko Importers that
are packaged in animal-shaped glass
decanters, as examples. Seasonal special-
ties are a draw, too, like last summer’s
Slim Chiller alcohol-enhanced cocktail
ice pops, which Alvarez-Peters says were
quite popular.Destination-Driven
With more than 94 million members
worldwide, Costco stores have a huge
customer base. “We have more consumers
walking through a Costco warehouse every
day than any other retailer,” Alvarez-Peters
says. “Our foot traffic is what sets Costco
apart from other beverage alcohol stores.”
Costco’s average member is 52 years old and boasts an annual
household income of more than $92,000. This older, affluent
crowd is a boon to the company’s beverage business, although
Alvarez-Peters notes that in recent years there has been a
noticeable increase in younger and more diverse Costco
members. She also says that many shoppers view Costco as a
grocery store—as people are shopping for meat, seafood, and
cheeses, they then walk through the beverage alcohol area to
make a complementary purchase.
“We’re a very limited-SKU environment so we know we
can’t be everything to everyone,” Alvarez-Peters says. “We’ll
keep our selection fresh and exciting, and constantly rotate
items in and out of our system. Costco’s beverage alcohol
department has gained a good reputation among our members.
We strive to excite them with unique and interesting items
in the wine, spirits, and beer arena.” mwIn spirits, Alvarez-Peters says Bourbons and other whiskies
remain hot, and adds that Tequilas and cordials are also doing
well. The company’s top-selling spirits include Tito’s Hand-
made vodka ($26-$30 a 1.75-ml., depending on the market),
Kirkland Signature American vodka ($13), and Jack Daniel’s
Tennessee whiskey ($29-$40). Meanwhile, in beer, Mexican
brews and local craft labels dominate. Costco’s top-selling
big-name beers include Corona ($22-$33 a 24-pack of
12-ounce cans) and Heineken ($22-$32). For local labels,
Firestone Walker Brewing Co.’s 805 Blonde ale ($26) is popu-
lar in greater Los Angeles and Bell’s Brewery’s Two Hearted
ale ($34) does well in Michigan.
“We continue to seek out local items for wines, spirits, and
beers in each individual market,” Alvarez-Peters says. “This
may be for only one warehouse or for the entire state. The local
items we find from small producers create excitement and the
At Costco, Bourbons and other whiskies (top left) are top sellers, and the company’s
own Kirkland Signature vodka (top right) is among the best-selling spirits brands. For
the beer category (above), local craft brews—such as Firestone Walker Brewing Co.’s
805 Blonde ale in California—lead the pack, joined by Mexican beers like Corona.