Over the past two decades, Costco has become one of North America’s largest wine and spirits retailers. Between 2010 and 2020, Costco’s liquor sales more than doubled and they continued to grow at double-digit rates.
Remarkably, the average Costco store only carries about 220 alcoholic beverage SKUs. About 50 of these drinks are spirits and the rest are made up of wine, beer and RTDs. Costco is generally the largest US retailer of the wine and spirits brands it carries.
In 2020, Costco sold approximately $5.5 billion worth of alcoholic beverages. Their sales in 2021 exceeded $6 billion. Wine now accounts for around 50% of their beverage sales, spirits around 30%, and beer and RTD sales around 20%.
Like many other retailers, Costco has an exclusive brand: Kirkland Signature. The brand is named after the town of Kirkland, Washington, where Costco’s headquarters are located.
About 20 of the 50 brands of spirits sold by Costco carry the Kirkland Signature brand. The selection of spirits tends to vary considerably throughout the year. Certain brands of Kirkland spirits are only offered in the fourth quarter. Costco also offers 150 different wines, 30 of which carry the Kirkland Signature brand, and about 16 beer references, one of which is exclusive.
The chain has 810 stores, as of July 2021, including 559 in the United States. Of these stores, 337 stores sell liquor (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 “members club” and requires customers to be registered to shop at their stores. In 14 states, however, including Texas, California and New York, it is illegal to require membership to purchase alcoholic beverages. In these states, you can buy alcoholic beverages at a Costco without being a member.
Currently, Costco offers two vodkas, three tequilas, a rum, and a cognac expression under the Kirkland Signature brand. It also offers 10 whiskey expressions under the same brand: four Scotch whiskeys, three bourbons, one Irish whiskey, one Canadian whiskey and one Tennessee whisky.
Historically, Costco has generally not disclosed the producers of Kirkland brand spirits; a practice that has given rise to endless speculation among consumers about what liquid is actually in the bottle.
Keep in mind that exclusive spirits brands often purposely try to mimic the flavor and taste profile of market leaders. If Kirkland Blended Scotch Whiskey tastes a lot like Dewar, that doesn’t mean it’s Dewar in Kirkland Signature packaging (although it could be), it could just mean that the producer sought to mimic the taste of Dewar’s – the best-selling blend. Scotch whiskey in the United States.
Ultimately, where the spirit is produced doesn’t matter. What matters is if you like the taste and if you think the price represents good value. If you like the spirit and its price, usually exceptional value at Costco, it’s worth buying.
Costco sells three different expressions of Tequila: a Tequila Blanco, a Tequila Reposado, and a Tequila Añejo.
Blanco tequilas are unaged, although they may rest for 30 days or more in a steel tank before being bottled. They do not undergo any aging of the wood. Tequilas Reposado are usually aged in oak barrels for 2 to 12 months. Añejo tequilas are aged in oak barrels for a period of one to three years. Anything over three years old is classified as Extra Añejo.
All Costco Tequila Expressions are produced from 100% Blue Agave (Agave tequilana) and must be bottled in Mexico. 174 distilleries in Mexico are authorized to produce tequila. Under Mexican law, a Tequila distillery is not permitted to produce spirits other than Tequila from that facility.
The Mexican government assigns each Tequila distillery an identification number called NOM. Mexican regulations require that each bottle of Tequila bear the NAME of the distillery where it was produced. If the producer changes, then in the future the NAME on the bottle will also change to reflect the current producer.
Costco used several distilleries in Mexico to produce its Tequila. Currently, Kirkland Signature Tequila uses Corporate Distillery Santa Lucia, SA de CV, (NAME 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 takes place in stainless steel vats. The producer uses either stainless steel pot stills or a column still to distill the Tequila. The aging is done either in ex-bourbon barrels, or in virgin American or French oak barrels.
Prior to shifting production to Santa Lucia, Costco used La Madrileña in Tototlán in the Jalisco Highlands (NOM 1142). You can still find Tequila with this NAME in Costco stores.
Costco also used Fabrica de Tequilas Finos in the city of Tequila. Costco is a high-volume retailer of Tequila, so presumably the contract to produce Tequila for Costco is very competitive and highly sought after by distilleries.
While changes over the past few years may have been motivated solely to achieve lower costs, it appears that Costco has been modernizing toward distilleries that offer larger capacities and more production options.
All of these distilleries produce multiple brands for different Tequila companies. That doesn’t mean it’s the same Tequila, just packaged in different bottles.
There are about a dozen major decision points and several dozen minor decision points in the tequila production process – from which agave to use, to how to cook it, to crush it, to ferment it and distill it, among other things. 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 different companies at the same distillery.
Below are tasting notes on the three expressions of Tequila offered by Costco. All three expressions sell for around $20/bottle, depending on condition. Note that Blanco Tequila comes in a 1.75 liter bottle while 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, accompanied by a noticeable aroma of alcohol and a slight medicinal note. The Tequila is floral and fruity with notes of apple and pear and a slight vegetal/cut grass aroma.
Cooked agave and fruity notes linger on the palate, along with vegetal and earthy notes. There is a noticeable sweetness. The finish is medium, sweet and fruity with a peppery persistence.
The aromas of cooked agave, herbs and vegetables as well as the sweet, fruity and floral notes are typical of an unaged Tequila.
At an effective price of around $7 for a 750ml bottle equivalent, Costco Kirkland Signature Tequila is the best value, 100% agave tequila, available.
Although smooth, with a good finish, it’s a little light on the mid-palate and overall lacks the nuanced complexity you look for in a sipping tequila. It will work wonders for mixed drinks, and it’s an exceptional value. If you’re looking for a Tequila to sip, however, there are more interesting expressions, albeit more expensive.
Kirkland Signature, Tequila Reposado, 100% Puro de Agave (NOM 1173), 40% ABV, 1 liter.
On the nose, there is a slight aroma of alcohol, as well as hints of cooked agave and freshly cracked black pepper. There are aromas of citrus fruits and tropical fruits as well as a slight vegetal note, as well as hints of vanilla, well-seasoned oak wood and a hint of caramel.
On the palate, many of the same aromas as on the nose carry over. There are fruity notes of orange and lemon zest, as well as tropical fruit notes of melon, mango and a bit of pineapple. There are additional vegetal notes, typical of the raw agave aroma, as well as vanilla and a bit of caramel. The finish is medium to long, with a sweet fruity note and a pronounced and persistent pepperiness.
Kirkland Signature Añejo Tequila, Extra Agave 100% Agave (NOM 1173), 40% ABV, 1 Liter.
On the nose, there are pronounced aromas of caramel and vanilla. These are more forward than the typical añejo. It could be all natural or maybe these flavors have been 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, as well as hints of cooked agave, earth and dried orange peel. There are also spicy notes of black pepper and cinnamon.
On the palate, the Tequila is fat with a noticeable weight in the mouth and a coating quality in the mouth. It’s creamy, which when combined with the pronounced vanilla flavors gives it an almost custard/crème brûlée quality.
There are pronounced notes of caramel, as well as oak wood, baked agave, cinnamon and pepper. The earthy note is more pronounced on the palate adding a white pepper quality to the Tequila. There is also a lingering herbaceous note of dried herbs or tobacco leaves.
The finish is long, sweet, with a pronounced and persistent note of vanilla and caramel.
At an average price of around $20 per litre, this is a very good value Tequila añejo. It will work great in mixed drinks. You can definitely sip it. On rocks it will sink fairly easily, but overall it doesn’t have the complexity you’d want in a sipping tequila.
Of the three expressions rated above, I would say Tequila Reposado 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 great in mixed drinks and for that purpose you would be hard pressed to find a better value.
If you fancy sipping Tequilas, neat or on ice, these three expressions will definitely work, and they are all very economical and inexpensive alternatives. There are, however, more drinkable tequilas, although they are several times more expensive. Nonetheless, however you intend to use them, all three tequilas should have a place in your home bar.