Costco introduced Kirkland Signature products nearly 15 years ago. The idea was to create a
line of “signature” products, and Kirkland, Washington, was where the company had its home base
at that time.
Why invest in our own line of private-label
products? There are several reasons, explains Jim
Sinegal, Costco president and chief executive officer. With Kirkland Signature, Costco can:
■ Develop popular items with wide appeal
to expand sales volume
■ Control the quality of the product
■ Drive down prices on national brands
■ Control the packaging
■ Achieve pallet efficiencies. For example,
when the jars containing Kirkland Signature
cashews were changed from round to square,
the number of jars that could fit on a pallet
increased from 288 to 432, saving 600 truckloads per year.
“We will always be known for name brands
such as Michelin, Sony and Crest,” Jim says, “but
we will continue to augment our product offerings
with our own Kirkland Signature items.
“The working rule followed by Costco buyers
is that all Kirkland Signature products must be
equal to or better than the national brands, and
must offer a savings to our members,” adds Dick
DiCerchio, chief operating officer of Costco. “We
know we have met this goal when consumer
groups consistently rate us highly compared to
Another rule is continuous improvement.
“We’re constantly looking at Kirkland Signature
items, revisiting them with an eye to making them
better,” says Jeff Lyons, Costco’s senior vice president
of fresh foods.
In the traditional marketplace, brands are built
over the years with expensive advertising campaigns
built around cornerstone products. In contrast, the
Kirkland Signature brand has grown by this formula:
Offer high-quality products at great prices, and let
the members decide. “With Kirkland Signature, the
focus is always on quality,” says Jeff. In other words,
the perfect product, from scratch.
The items profiled here are just a sample of the
Kirkland Signature products you’ll find at Costco.
of the other brands’ pastas are easily
overcooked and can become too soft
and lose their texture,” says Shauna.
“We formulated our noodles with a
blend of spring and durum wheat
that allows more of an al dente [soft
and firm] consistency when cooked
and appeals to kids and adults alike.”
(The second-biggest category of mac-and-cheese
eaters is 18- to 29-year-olds.)
The Kirkland Signature product also uses real
cheese in the cheese sauce.
And the savings? Kirkland Signature Macaroni
& Cheese is available at most Costco locations for
about $2 less than the leading national brand.
“The development of this item coincides perfectly with the goals of our Kirkland Signature programs, in regard to quality and savings,” says
Shauna. “We are very pleased and excited with what
we’ve been able to achieve with the new Kirkland
Signature Macaroni & Cheese.”—T. Foster Jones
Quality in a bottle
If you’re looking for something that cleans your
clothes as well as the leading national brands for a
much lower price, consider Kirkland Signature liquid laundry detergent. But before you put it in your
cart at Costco, take a moment to look at the bottle.
The behind-the-scenes story about this product
is how Costco buyers and the manufacturer teamed
up to build an excellent detergent from scratch. That
includes every component, big and small, to ensure
quality and a great price.
In this case, one simple yet very important step
was designing a better container. Longtime Costco
members are familiar with the original Kirkland
Signature powdered laundry detergents in the big plastic buckets. As detergents evolved, liquid detergents
became popular and gradually became more concentrated. Consequently, packaging had to change.
Kirkland Signature laundry
detergent comes in three
varieties: scented, unscented
and environmentally friendly.
Using their noodle
PHOTOS BY IRIDIO PHOTOGRAPHY
“We determined very quickly that we were up
against an iconic national brand with macaroni and
cheese and had to offer our members something
more,” says Shauna Lopez, a Costco buyer working
on the creation of Kirkland Signature Macaroni
& Cheese, which hit all warehouses in September
2009. “We wanted to be able to offer a macaroni and
cheese that was great tasting, and a great value to
our members. In this case, we have achieved both.”
Costco’s research pointed out that one of the
biggest issues was the quality of the noodles. “Many