144 ;e Costco Connection JANUARY 2016
inside costco
By Kerry Johnson
THE LAST SEVERAL times I’ve gone to Costco for
groceries, it seems as if more organic items have
sprouted up (so to speak) in just about every aisle.
That doesn’t surprise me; several recent news stories
named Costco as one of the largest organic grocers in
the country.
I was curious about how Costco is able to offer
so many organic items, especially when it takes
years for farmers to convert their land to organic
and competition is increasing for the organic foods
they produce.
So, I sat down with Jeff Lyons and Dennis Knapp,
who oversee Costco’s organic food programs, and hit
them with everything I wanted to know about the
organic food at Costco but wasn’t too afraid to ask.
Jeff is the senior vice president of fresh foods. His
team sources Costco’s produce, meat and bakery
items, including a variety of organic fruit and vegetables, organic poultry and organic ground beef.
Dennis is the senior vice president of foods and
sundries. He oversees the other grocery items at
Costco, including dairy, dry and canned goods, deli
items, and so on. His team’s organic items include
honey, peanut butter, milk, chicken stock, applesauce
and olive oil, to name a few.
Costco has been offering organic items since
1992, when it introduced an organic spring greens
mix from Earthbound Farm. The first organic
Kirkland Signature™ item, milk, was introduced in
2004. Since then, the company has steadily
increased its organic offerings—currently, 20 per-
cent of the grocery items Dennis’ team sources for
Costco are organic, and Jeff says 14 percent of
Costco’s produce and 9 percent of its meat are
organic as well.
Here, Jeff and Dennis discuss what makes the
organic program successful and the challenges
they face.
The Costco Connection: How have you
persuaded your suppliers to go organic?
Dennis Knapp: I think most of the organic
products we have now were conventional at one
time. It’s just sitting down with suppliers and having
them recognize that our members want organics,
and letting them know we’re willing to stick with
them as they go through the process of taking a conventional product and making it organic. They know
that we’re on their side and we’ll be there for them
when they do provide it for us.
Jeff Lyons: We have great relationships with
our suppliers. They know us and we’ve dealt with
many of them for close to 30 years, so that makes us
a good bet for them.
We’re not ever going to have a supplier plant
something and then hurt them. We’d rather know
upfront what the costs are going to be. If they say it’s
going to be five times the cost of conventional, we’d
probably say, “You know, at this point, that’s probably
not a value. Let’s look at this and see if there’s some-
thing else we can do.”
Relationships really are the key. I do believe that
we get a higher-quality product by working with our
suppliers over the long term.
© NEVODK /
SHUTTERSTOCK
CO
S
TC
O
P
HO
TO
S
T
U
DI
O
Freelance writer Kerry
Johnson fills this
month’s consumer
reporter slot with this
behind-the-scenes
look at a Costco program. Send questions
about this article to:
buyingsmart@
costco.com.
BuyingSmart
A conversation with the leaders
of Costco’s organic food program
An
organic
success
© GOODWEEN123 / SHUTTERSTOCK
LEE WEST
CULTIVATED
IMAGES
