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Old 02-04-2008, 05:54 PM   #1
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Default Costco-Beer.

Remember the generic "beer" in Repo Men?



Looks like it just got a little closer to reality.

Quote:
Costco to Become a New Name in Battle of the Brews


Wholesale Chain Will Release Its Own Line of Beers
By Jeremy Mullman

Published: January 30, 2008

CHICAGO (AdAge.com) -- The big brewers have fretted that decades of copycat, chucklehead advertising has reduced their biggest-selling brands to indistinguishable commodities in the eyes of many consumers. Now they may be reaping what they've sown: Costco, one of the nation's largest warehouse retailers, is readying its first line of private-label beers.



The retailer has filed label applications with the federal Tax and Trade Bureau for a Kirkland Signature Hefeweizen, amber ale and pale ale. The beers will be brewed by San Francisco-area craft brewer Gordon Biersch, which also brews private-label beers for the Trader Joe's supermarket chain.

Big-box stores such as Costco have been a lucrative source of case sales for brewers and any additional competition in the channel will not be appreciated at a time when those brewers are struggling to increase sales.

Who will suffer more?
Stifel Nicolaus analyst Mark Swartzberg said the rollout's impact is most likely to hurt sub-premium brands such as Anheuser-Busch's Busch and Natural Light, Miller Brewing's Milwaukee's Best Light and Coors' Keystone. That category of beers is underperforming overall as of late, he said. "It's a very cluttered space, and price and promotions tend to matter more there."

Still, while private-label brands generally tend to compete with the low end of their categories, sub-premium brands don't have much of a presence at Costco, which tends to sell higher-end items at bulk prices. Craft-beer styles such as Hefeweizen might appeal more to drinkers who would otherwise be buying Michelob or Sam Adams than they would to the typical purchaser of a Busch Light 30 pack.

That suggests that it's premium brands that might hurt more from the Costco entry. "If you ask the brand guys if they'd rather the private labels didn't exist, they'd say yes," said Mr. Swartzberg.

Could grow the market
Then there's the possibility that the new entry could simply grow the market. The presence of a private label might actually cause shoppers to buy more beer than they would have otherwise, he said.

A call to Costco's corporate office was not returned, but the retailer has been offering private-label wines -- including a Champagne and a New Zealand sauvignon blanc from the heralded Marlborough region -- and spirits for some time.

The Kirkland label application -- first reported by Miller Brewing Co's corporate blog, BrewBlog -- coincides with a court ruling against Costco yesterday in a long-running dispute between the retailer and Washington state beer wholesalers. A federal appeals court rejected a lower court's ruling that Washington statutes banning certain volume discounts and preventing retailers from taking beer directly from a warehouse. The decision strengthened the position of beer distributors, who have been in the somewhat awkward role of warring in court with their biggest customers.
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Old 02-04-2008, 06:01 PM   #2
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Well, at least it's being brewed by Gordon Biersch, who knows how much freedom they'll give him though... I wonder what the pricing is going to be?

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Old 02-04-2008, 06:03 PM   #3
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When I was a kid, I used to collect beer cans. I remember one can that I had was white with "BEER" in brown letters.

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Old 02-04-2008, 06:05 PM   #4
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Originally Posted by c.n.budz
Well, at least it's being brewed by Gordon Biersch, who knows how much freedom they'll give him though... I wonder what the pricing is going to be?

Yeah...Funny I was thinking about picking up some of Trader Joe's Beer to try next time I was in there (another Gordon Biersch boutique Beer).

Trader Joes "2 Buck Chuck" brand of wines are really good and reasonably priced.

It's nice that their planning on doing something more than a generic bmc....I'll give the ale a try if I come upon it.
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Old 02-04-2008, 06:06 PM   #5
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Interesting that Costco is going this route with beer, but not suprising since just about everything under the Kirkland signature label is made by a big name company. I'll bet it will be decent beer.

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Old 02-04-2008, 06:07 PM   #6
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Originally Posted by Mutilated1
When I was a kid, I used to collect beer cans. I remember one can that I had was white with "BEER" in brown letters.
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Old 02-04-2008, 06:07 PM   #7
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Quote:
Originally Posted by Mutilated1
When I was a kid, I used to collect beer cans. I remember one can that I had was white with "BEER" in brown letters.
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Old 02-04-2008, 06:16 PM   #8
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^ lol


Maybe it will be good if it's Biersch?

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Old 02-04-2008, 06:18 PM   #9
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yep - thats it
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Old 07-23-2008, 05:06 PM   #10
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Not surprised at all.
Based on everything else I've seen at Costco I'm guessing this will be decent beer and probably not something that will compete directly with Bud and Miller. instead it will probably take sales from Sam's, Blue Moon and JW Dundee's. It might also steal more price conscious craft beer buyers. Especially given that beer prices are on the rise.

I'll try one if someone offers but I won't be buying a case.

Craig

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