Costco’s Private-Label Alcohol Sales Jumped Almost 50 Percent in Past Five Years

The company began selling wine under Kirkland Signature in 2003 and spirits in 2007

Wine, spirits, and craft beer are all sold under the Kirkland Signature brand.

Despite falling short of projected overall profits during the holidays, Costco has one intoxicating reason for optimism — its private-label alcohol line is booming, with a 46 percent rise in sales in the past five years, according to Bloomberg.

The wholesale-club chain’s Kirkland Signature liquor brand has gained a following, with some customers comparing the products favorably to top-shelf alcohol. According to David Schick, lead retail analyst at Consumer Edge Research, the use of “very high-end producers” allows the company to set itself apart from other private labels.

In the last fiscal year, Costco reached $3.8 billion in alcohol sales. Of the alcohol sales, wine made up almost half.

“Private label continues to grow as a dominant strategy in retail — especially when it migrates from being a ‘label’ to more of a ‘brand,’ which Kirkland has done,” David Bassuk, managing director at consulting firm AlixPartners in New York, told Bloomberg. “Now it’s a well-known name and gives the consumer a perception of value and a good deal.”

According to Annette Alvarez-Peters, manager of the beverage alcohol division at Costco, the private label beverages are produced by “various manufacturers.”