Costco Connection - September 2012

inside costco brand A apart
Kirkland Signature means quality and value
IT’S BEEN NEARLY 20 years since the first Kirkland SignatureTM products appeared at Costco. Has this line of private-label products achieved its goal of offering members a unique value in their everyday purchases? Absolutely. The Kirkland Signature label today appears on about 20 percent of the products you find in your local warehouse—on everything from men’s dress shirts to laundry detergent, pet food to toilet paper, canned foods to cookware (see this month’s “What’s New” on page 78), olive oil to beer, automotive products to health and beauty aids. The common element: These are Costco’s signature products that offer the perfect combination of quality and price to members.

“We will always be known for name brands
such as Michelin, Sony and Crest,” says Craig
Jelinek, Costco president and chief executive offi-
cer, “but we will continue to augment our product
offerings with our own Kirkland Signature items.”
With Kirkland Signature, Costco can develop
new products, new categories and new products
in existing categories, which allows the company
to control the quality of the Kirkland Signature
product and drive down prices on competing
national brands.

“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 Craig.

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.

The four items profiled here represent the kinds of Kirkland Signature products most members will encounter: a new Kirkland Signature category (soda), new products in existing Kirkland Signature categories (men’s soft-shell jacket, parchment paper) and an upgrade to an existing Kirkland Signature product (laundry detergent). These four are just a sample of the Kirkland Signature products you’ll find at Costco.

—Tim Talevich

60 ;e Costco Connection SEPTEMBER 2012

This pop rocks

TO SAY SODA is a pretty competitive field is an understatement. National brands dominate the market. “When we set out to create Kirkland Signature™ Cola we understood the landscape and felt that a great private-label product could be created and offered for an excellent price,” says Costco buyer Teresa Noonan.

But one doesn’t just casually develop a
new soda to compete in this category with
the big players. Value means nothing if the
taste isn’t right. “Our cola has been in devel-
opment for nearly two years,” says Teresa.
“We worked with our quality-assurance lab
and our supplier for months to come up
with the final formula.”
After intra-company blind taste tests, in
which Kirkland Signature Cola beat the
national leading brands, Teresa says they
knew they had a winner and were ready
to launch in June of this year.

The reception to Kirkland Signature Cola, which sells in cases of 24 12-ounce cans for $4.99, has been so positive, Teresa says, that plans were finalized for the development of Kirkland Signature Diet Cola, which will launch this month.

“By building a Kirkland Signature soda, we are offering our members a delicious, high-quality soda with a 20 percent or better value against the leading national brands. It’s a win-win for Costco and our members.”