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Costco Expects Robust Sales Trends To Continue Through The Second Half

July 13, 2021

In the world of wine retail, few companies can compete with Costco Wholesale Corp. Amid a tumultuous year of navigating a changing retail climate during a global pandemic and new leadership at the head of its beverage alcohol sector, Costco’s beverage sales have continued to grow. The mega-company has been a leader in off-premise beverage sales for years and, like many of its competitors, Costco saw huge gains last year as buying trends shifted heavily toward retail during the height of the Covid-19 pandemic.

“Alcohol sales were very strong in 2020 and we’re continuing to see healthy double-digit increases,” says Chad Sokol, Costco’s assistant vice president and general merchandise manager for beverage alcohol. “We believe we will continue to have robust sales through 2021.”

Costco’s global beverage alcohol sales topped $5 billion in 2020, up from roughly $4 billion in 2018. Over the last decade, the company’s alcohol sales have essentially doubled, as they were posted at $2.3 billion in 2010. Wine continues to comprise half of Costco’s total beverage alcohol sales, equaling roughly $2.5 billion last year, followed by spirits at 30% and beer at 20%. Those numbers have shifted gradually over the last ten years, as spirits and beer used to split equal 25% shares of beverage revenue in 2010.

Sokol notes that many members traded up in price point while shopping during the pandemic. Costco’s top-selling wines include Kirkland Signature DOCG Prosecco ($7 a 750-ml. bottle) and Kirkland Signature Ti Point Sauvignon Blanc ($7). “We’re really pleased to see sparkling sales grow again,” Sokol says. “One of the unintended benefits from last year was our access to new wineries that were previously hesitant to sell to Costco.”

In spirits, Tequila and whiskies, especially Bourbon, performed well last year, and Sokol adds that he also saw strong growth in single malt Scotch, despite tariff issues. That said, the company’s top-selling spirits remain vodkas—Kirkland Signature American vodka ($13 a 1.75-liter) and Tito’s vodka ($29).

“In addition to RTDs, we’re also seeing great growth in vermouths, cordials, and other items that we didn’t do much business in before, as more people transitioned to making cocktails at home,” Sokol adds. Market Watch has the full story.—Laura Pelner

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