Over the last two decades Costco has emerged as one of North America’s largest retailers of wine and spirits. Between 2010 and 2020, Costco’s sales of alcoholic beverages more than doubled and they have continued to grow at double-digit rates.
Remarkably, the average Costco store only carries about 220 SKUs of alcoholic beverages. About 50 of those beverages are spirits and the balance is made up of wine, beer and RTDs. Costco is usually the largest US retailer of the wine and spirit brands it stocks.
In 2020, Costco sold roughly $5.5 billion of alcoholic beverages. Their sales in 2021 surpassed $6 billion. Wine now represents around 50% of their beverage sales, spirits are around 30% and beer and RTD sales are approximately 20%.
Like many other retailers, Costco has a proprietary brand: Kirkland Signature. The brand is named after the city of Kirkland, Washington, the location of Costco’s head office.
Around 20 of the 50 spirit brands that Costco sells carry the Kirkland Signature brand. The spirit selection tends to vary widely over the year. Some Kirkland spirit brands are only offered in the fourth quarter. Costco also carries 150 different wines, 30 of which have the Kirkland Signature brand, and around 16 beer SKUs, one of which is proprietary.
The chain has 810 stores, as of July 2021, 559 of which are in the US. Of those stores, 337 stores sell spirits (266 in 31 states), 445 stores sell wine (373 in 40 states) and 496 sell beer and RTDs (405 in 41 states). Costco does not sell any spirits in the 17 “control” states.
Technically, Costco is a “membership club” and requires customers to be enrolled to shop in their stores. In 14 states, however, including Texas, California and New York, it is illegal to require a membership to purchase alcoholic beverages. In those states, you can purchase alcoholic beverages in a Costco without being a member.
Currently, Costco carries two vodkas, three Tequilas one rum, and one Cognac expression under the Kirkland Signature brand. It also carries 10 whisky expressions under the same brand: four Scotch whiskies, three bourbons, an Irish Whiskey, a Canadian whisky and a Tennessee whiskey.
Historically, Costco has usually not disclosed the producers of the Kirkland branded spirits; a practice that has given rise to incessant speculation among consumers about whose liquid is actually in the bottle.
Bear in mind that proprietary spirit brands will often purposely try to mimic the aroma and taste profile of market leaders. If Kirkland blended Scotch whisky tastes a lot like Dewar’s that doesn’t mean that it is Dewar’s in Kirkland Signature packaging (although it could be), it might simply mean that the producer sought to mimic the taste of Dewar’s – the best-selling blended Scotch whisky in the US.
In the end, where the spirit is produced doesn’t matter. What matters is whether you like the taste and whether you think the price represents a good value. If you like the spirit and how it’s priced, typically an exceptional value at Costco, then it’s worth buying.
Costco retails three different Tequila expressions: a Blanco Tequila, a Reposado Tequila and an Añejo Tequila.
Blanco Tequilas are unaged, although they may be rested 30 days or more in a steel tank before being bottled. They do not get any wood aging. Reposado Tequilas are generally aged in oak casks for two to 12 months. Añejo Tequilas are aged in oak casks for a period of one to three years. Anything aged over three years is classified as an Extra Añejo.
All of Costco’s Tequila expressions are produced from 100% blue agave (Agave tequilana) and must be bottled in Mexico. 174 distilleries in Mexico are licensed to produce Tequila. Under Mexican law, a Tequila distillery is not allowed to produce any other spirit besides Tequila from that facility.
The Mexican government assigns each Tequila distillery an identification number called a NOM. Mexican regulations require each bottle of Tequila to bear the NOM of the distillery where it was produced. If the producer changes, then, going forward, the NOM on the bottle will also change to reflect the current producer.
Costco has used several distilleries in Mexico to produce its Tequila. Currently, Kirkland Signature Tequila is using Corporate Distillery Santa Lucia, SA de CV, (NOM 1173) in Tesistán, a town northwest of Guadalajara.
This is a modern distillery that used both high-pressure autoclaves to cook the agave piñas as well as a diffuser. Fermentation is in stainless steel tanks. The producer uses either stainless steel pot stills or a column still to distill Tequila. Maturation is either in ex-bourbon barrels or virgin barrels of American or French oak.
Before switching its production to Santa Lucia, Costco used the La Madrileña in Tototlán in the Jalisco Highlands (NOM 1142). You can still find Tequila carrying this NOM in Costco stores.
Costco has also used Fabrica de Tequilas Finos in the town of Tequila. Costco is a high-volume retailer of Tequila so presumably, the contract to produce Tequila for Costco is very competitive and eagerly sought after by distilleries.
While the changes over the last several years may have been driven solely to obtain lower costs, it does look like Costco has been upgrading to distilleries that offer broader capabilities and more production options.
All these distilleries produce multiple brands for different Tequila companies. That doesn’t mean that it is the same Tequila – just packaged into different bottles.
There are about a dozen major decision points and several dozen minor decision points in the Tequila production process – from what agave to use, to how to cook it, crush it, ferment and distill it, among others. These decisions will shape the final aroma and flavor profile of a Tequila. By choosing different production options, a distiller can produce different Tequila for various companies from the same distillery.
Below are tasting notes on the three Tequila expressions offered by Costco. All three expressions sell for around $20/bottle, depending on the state. Note that the Blanco Tequila comes in a 1.75-liter bottle while the Reposado and Añejo Tequila come in 1-liter bottles.
Kirkland Signature Tequila Silver, 100% Puro de Agave (NOM 1173), 40% ABV, 1.75 liters.
On the nose, there are pronounced notes of cooked agave, along with a noticeable alcohol aroma and a slight medicinal note. The Tequila is floral and fruity with apple and pear notes and a slight vegetal/cut grass aroma.
The cooked agave and fruity notes carry through to the palate, along with the vegetative and earthy notes. There is a noticeable sweet character. The finish is medium length, sweet and fruity accompanied by a lingering pepperiness.
The cooked agave, herbal and vegetative aromas along with the sweet, fruity and floral notes are typical of an unaged Tequila.
At an effective price of around $7/750 ml bottle equivalent, the Costco Kirkland Signature Tequila is the best value, for a 100% agave Tequila, available.
While smooth, with a good finish, it is a bit light flavor-wise on the mid-palate and overall lacks the nuanced complexity you would look for in a sipping Tequila. It will work fantastically well for mixed drinks, and it represents an exceptional value. If you’re looking for a sipping Tequila, however, there are more interesting expressions available, although they will be more expensive.
Kirkland Signature, Reposado Tequila, 100% Puro de Agave (NOM 1173), 40% ABV, 1 liter.
On the nose, there is a slight alcohol aroma, along with cooked agave and freshly cracked black pepper notes. There are fruit aromas of citrus and tropical fruits as well as a slight vegetal note, along with notes of vanilla, some well-seasoned oak wood and a hint of caramel.
On the palate, many of the same aromas on the nose carry through. There are fruity notes of orange and lemon zest, along with tropical fruit notes of melon, mango and a bit of pineapple. There are additional vegetative notes, typical of the aroma of raw agave, as well as vanilla and a bit of caramel. The finish is medium length to long, with a sweet fruity note and a pronounced, lingering pepperiness.
Kirkland Signature Añejo Tequila, Extra Aged 100% de Agave (NOM 1173), 40% ABV, 1 liter.
On the nose, there are pronounced caramel and vanilla aromas. These are more forward than the typical añejo. This may be entirely natural or possibly these aromas were enhanced using oak chips in the barrel or additives. Tequila producers are allowed to add additives up to 1% by weight of the Tequila.
There are also pronounced aromas of well-seasoned oak wood, along with notes of cooked agave, earth and dried orange zest. There are also spice notes of black pepper and cinnamon.
On the palate, the Tequila is oily with noticeable palate weight and mouth coating quality. It’s creamy, which when combined with the pronounced vanilla flavors, gives it an almost custard/crème brûlée like quality.
There are pronounced caramel notes, along with oak wood, cooked agave, cinnamon and pepper. The earthy note is more pronounced on the palate adding a white pepper-like quality to the Tequila. There is also a persistent herbal note of dried herbs or tobacco leaves.
The finish is long, sweet, with a pronounced, lingering vanilla and caramel note.
At an average price of around $20 a liter, this is a very good value Tequila añejo. It will work very well in mixed drinks. You can certainly sip it. On the rocks, it will go down pretty easy, but on the whole, doesn’t have the complexity you would want in a sipping Tequila.
Of the three expressions evaluated above, I would say that the Reposado Tequila offers the most layered complexity and is the best of the three. All three Tequilas represent great values, as you would expect from Costco. All three will work very well in mixed drinks and for that purpose, you would be hard-pressed to find a better value.
If your tastes run to sipping Tequilas, either neat or on the rocks, these three expressions will certainly work, and they all represent very economical, low-cost alternatives. There are better-sipping Tequilas available, however, although they will be several times more expensive. Still, regardless of how you intend to use them, all three Tequilas should have a place in your home bar.