Wine is the New Toilet Paper? Nooga Contributor Tackles Costco Strategy

 


Of the big-box stores which stand like giant ovens offering the latest in the world’s fresh-baked consumer goods, Costco is, perhaps, the king of them all. 
 
Tennessee news website Nooga recently featured an article in which contributor Michelle Richards said that, though the popular opinion is that Costco’s ham-fisted wholesale tactics aren’t suitable for wine’s finesse, the mega-retailer is actually a great source for affordable wines of good quality.
 
“The point of wine at Costco is not for it to age over time for wine geeks to find hidden gems. The business model of Costco is about moving serious inventory to make a profit,” Richards wrote. “But that doesn’t mean that the wines are bad at Costco. That is a common misconception.”
 
Richards said the retailer didn’t do itself any favors when leading wine buyer Annette Alvarez-Peters told CNN in 2012 that ‘“wine is no different than toilet paper.”
 
However, in the context of the company’s wholesale practices, wine is, in a unique way, like the toilet paper, plastic jugs of pretzels and three-packs of your favorite toothpaste for which the behemoth is known.
 
“As the largest importer of French wine in the world, Costco is about moving product,” she wrote. “Costco buys wine in bulk in order to pass along savings to their members and still have money in the bank.”
 
Richards spoke with Chattanooga-area wine educator Brian Leutwiler about Costco’s wine strategy. 
 
Leutwiler said the retailer is his go-to location for the basics.
 
“When I go to Costco, I am looking for the basic things such as an inexpensive sparkling wine, chardonnay, sauvignon blanc and fruitier red wines,” he said. “I don’t go to Costco to find variety or a special wine for a tasting. I look for the broad and the basic.” 
Richards defended the wholesale specialists, saying the cavernous wine haven is a great place for affordable dinner-party quaffers. 
 
“I have found wines at Costco that are delicious and under $25 a bottle,” she said. “These wines are great for everyday house wines or any parties you throw.”
 
Looking for a bottle of premium or ultra-premium wine? Looks elsewhere, she said. 
 
“There are a lot of high-end wines at Costco that many people ask me about,” she said. “The producers that they are buying from are fantastic – but I don’t know fi they are storing these high-end wines properly.” 
 
Richards went on to describe instances in which she bought high-end wines, only to find out they were plagued with bottle shock. 
 
“I personally would not take the risk again of buying higher-end wines at Costco,” she said. “Again, their business model is about moving inventory.”
 
Photo Credit: Pixabay

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