Costco Entering Craft Brew Beer Battle
There’s an article over at Advertising Age detailing an interesting development in the craft brew beer market – Costco, one of the top warehouse club stores (along with Sam’s Club and BJ’s), will start offering it’s own private label (Kirkland Signature) line of craft brews.
Kirkland Signature is Costco’s store brand (or private label brand for those in the industry). It’s their attempt at branding a line of their own discounted products to live somewhere in between the category of “generics” and “premiums” (think of the box of rice that’s just a white box with the word “RICE” on it and then think of Uncle Ben’s – the Kirkland brand is somewhere in the middle). The Kirkland name comes from the fact that their corporate headquarters used to be in Kirkland, Washington.
Their four initial offerings will be:
- Kirkland Signature Hefeweizen Handcrafted Beer
- Kirkland Signature Amber Ale Handcrafted Beer
- Kirkland Signature Pale Ale Handcrafted Beer
- Kirkland Signature German Lager Handcrafted Beer
Gordon Biersch, the same company that brews private-label beers for Trader Joe’s, will do the brewing.
The main question asked is who will it affect most? The sub-premium mass market brands (i.e. Busch) or the more premium craft brands (i.e. Sam Adams). My gut tells me the premium craft brands may feel the pinch more because they run smaller batches and would tend to feel any shifts in consumer demand more than a large company like AB, who has the revenues to more easily absorb it and can create more of their own craft brews to help combat it.
Update: March 2011
We’ve officially reviewed all 4 beers and have added links to the beer names above. Overall – it’s an excellent value of a 24 pack. The total cost is around $18.99 or about 79 cents per bottle and there’s a six pack inside of each kind of beer. You won’t beat that price anywhere for the quality of beers you get. It’s also a really great way to get people trying new stuff.
Now for a little more background on the brewing:
The Kirkland beers are contract brewed by one of two different breweries that are somewhat obscured – East Coast beers come from New Yorker Brewing out of Utica, NY. You won’t find anything on the web about them, but some astute BeerFathers readers note that it’s actually done at the Sarnac Matt Brewing Company facility (also known as FX Matt Brewing Company).
For the West Coast beers those come from the Hopfen und Malz Company out of San Jose, CA. Again, you won’t find anything on the web about them, but it’s actually done at the Gordon Biersch Brewing Company (since Costco headquarters are on the West Coast, it makes sense they would have started with Gordon Biersch first and then expanded to an East Coast operation).
You won’t find the Kirkland beers on either of their sites and that’s the way Costco likes it, as evidenced by the fact that they used assumed names on their packaging (really taking it to the next level). That’s what contract packaging is all about (it’s not hard to tell now that Son Beer Love actually works in the packaging industry).
Many thanks to all our astute readers who were able to dig around and find what’s going on.
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