The Blommer Chocolate Company, which has been creating gourmet chocolates since 1939, is said to be the maker of Costco’s delicious Kirkland Signature Milk Chocolate Almonds. I have to say, these almonds are one of my favorite Costco treats.
The Kirkland Signature Almonds are priced at 11.99 for 48 ounces, or about 25 cents per ounce. When compared to grocery and department stores, who sell smaller bags of lower quality for much more, this is an absolute steal.
Is Kirkland exclusive to Costco?
CNN (CNN) Kirkland Signature, a Costco private label, is possibly America’s strangest private label. You can buy Kirkland Signature AA batteries at the same time as Kirkland Signature cashews.
During Costco’s most recent fiscal year, Kirkland brought in $58 billion in sales, accounting for over a quarter of the company’s total revenue. Kirkland is the most popular consumer packaged goods brand in the United States, according to sales. It outnumbers Hershey, Campbell Soup, and Kellogg.
It wasn’t always like this, though. Costco took several decades to perfect its Kirkland strategy.
Three decades ago, if you went to Costco in the United States, you’d discover roughly 30 distinct Costco private-label brands alongside the big-name food and household essentials’ lines.
Simply Soda was available. Toilet paper from Chelsea. Wine from Ballantrae. Detergent with a clout. Nutra Nuggets is a brand of dog food. These brands were only available at Costco, which was then known as PriceCostco following the merger of Price Club and Costco in 1993 (Costco eliminated the word “Price” from its name four years later).
Costco’s co-founder and CEO at the time, Jim Sinegal, thought these brand names were forgettable. He saw a big chance to rethink the company’s private-label strategy.
A 1991 Forbes story about expanding profit margins for big consumer goods businesses like General Foods, H.J. Heinz, and Nabisco, as well as the emerging growth of private-label brands, inspired Sinegal. According to the article, consumers are “beginning to move to house brands…The trend is barely a trickle so far, but it shows signs of spreading quite swiftly.” Sinegal highlighted significant sections of the piece and circulated it around Costco’s senior merchants.
Costco was also expanding worldwide at the time, especially in the United Kingdom and Canada, where the stores’ private-label brands were of higher quality and more popular with customers than in the US. The private brands of most US chains have been uninteresting knockoffs with white labeling.
“We saw that there was a rebirth of private-label merchandise, and that was mostly driven by the fact that the prices of brand-name products were rising so quickly,” Sinegal said during a Georgetown University address in 2019. According to him, rising pricing for big-name products “provided an opportunity” for Costco to build its own brands for 15% to 20% less than branded alternatives.
Sinegal told Costco’s merchants that he wanted Costco’s private brands to be of the same high quality as those sold elsewhere. And he had an uncommon request: give them all the same name.
In 2019, Sinegal said, “Conventional thinking said that you had to have a separate name for every kind of goods that you had a la Sears Roebuck with the Kenmore appliances, DieHard batteries, and Craftsman tools.” “We looked at it and said, you know, we’re in so many countries and have such a diverse product line that we’ll have a room full of attorneys attempting to clear these brands.”
When Sinegal asked for suggestions for a name, someone suggested Kirkland Signature, a play on the company’s Washington State headquarters, and presented a design to executives. (“Seattle Signature” was considered as well, but Costco was unable to register the name.)
“It was enjoyable,” Sinegal stated. “We got it approved for every country and product category we’d have. It became much easier after that.”
So, in 1995, all of Costco’s private brand identities vanished, replaced with a new logo consisting of a simple black, white, and red graphic that stated Kirkland Signature.
Despite the fact that Costco relocated its headquarters to Issaquah, the Kirkland name stuck: “Nobody could spell Issaquah, so we retained it.”
Kirkland Signature, abbreviated as “KS” at Costco, would soon appear on everything from diapers to tires to golf clubs.
Costco debuted a 24-pack of Kirkland hard seltzer and a 750ml Prosecco ros last year. Kirkland cauliflower pizza, furnace filters, and a set of saute pans are among the new things at Costco this year.
Costco’s lone private-label brand is an important aspect of the retailer’s consumer positioning and a method for it to differentiate itself from competitors.
Kirkland, a Costco exclusive, attracts members to warehouses and encourages them to renew their $60 and $120 yearly memberships year after year. Analysts say Kirkland helps Costco reinforce its image as a value retailer with high-quality products, which is maybe more crucial to the corporation.
“Kirkland is a Costco-like brand. It actually refers to Costco “Retail Brands Institute, a trade body representing the private brand business, is led by Christopher Durham. Kirkland is intended to appeal to a wide range of demographic groups, he added, in contrast to many other stores’ plethora of private labels, each of which is targeted at a different sector of the market.
Having a single name gives shoppers a sense of continuity, which is exactly what Costco wants, and it also saves money for the no-frills company. Costco will not have to pay for multiple packaging and will be able to put all of its purchasing strength behind Kirkland. Costco’s larger approach to merchandise at warehouses is exemplified by a single private brand: less choice is better.
“Kirkland has a one-note strategy,” Durham observed, “and it’s incredibly brilliant at that one note.” “It gives customers a reason to shop there and a point of uniqueness.”
‘Don’t get it wrong’
In recent years, several merchants have prioritized the development of their own brands. Store products have larger profit margins and do not have the same advertising costs as national brand products.
Costco’s strategy, on the other hand, is unique. It’s still one of the few major retailers that sells all of its private labels under one roof. Sam’s Club, a Costco competitor, consolidated its 21 private brands into the Member’s Mark brand in 2017.
In filings, Kroger claims to make and sell its private brands in three “tiers”: premium under the Private Selection label, midrange brand Kroger, and value brands like Big K and Heritage Farm. Simple Truth, a Kroger brand, is a natural and organic line.
Most supermarkets follow a similar “good, better, best” strategy, according to Scott Mushkin, a retail analyst at R5 Capital. Kirkland, on the other hand, has been “positioned as a quality brand at value rates” by Costco.
Other merchants sell a greater range of labels in order to appeal to a wider range of customers for varied products.
Walmart sells a variety of private labels, including Great Value household goods and George men’s clothes. Hundreds, including Cat & Jack children’s clothes and Good & Gather food, are available at Target. According to estimates, Amazon has over 400 separate proprietary brands.
Kirkland items’ “constant product quality, competitive pricing, and availability” are “important” to keeping Costco members loyal, according to the company’s annual filings. Sales and profit margins may decline if Kirkland “experiences a lack of member acceptability or confidence.”
“People will remember the one item if you get 99 things right and one thing wrong. So you don’t make a mistake, “Richard Galanti, the financial chief at Costco, said as much. “Kirkland is well-known in terms of business opportunities. It’s a trademark.”
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Is Kirkland’s merchandise created in China?
Costco carries a wide variety of products, some of which are manufactured in China.
Apple products (iPhones and iPads, for example), numerous clothing companies, and others are among them.
In addition, some of the items under Costco’s own label, Kirkland Signature, appear to be manufactured in China.
Costco appears to strive to manufacture its private label products in the United States in many circumstances, however apparel and electronics are likely to be made in China.
Given that China accounts for 28.7% of global manufacturing production, it’s likely that many brands manufacture in China, even if they don’t mention it.