Will Costco change the face of Napa?

A long-awaited Costco store has opened in Napa, with the new branch housing the wholesaler’s “largest wine collection” yet. But what do Napa winemakers make of it? db reports.

According to local Napa press, people queued around the block to be among the first through the doors of the newly opened Costco store, which officially began trading on 18 October.

The new Napa store has the largest wine selection of any Costco store across the US, and also houses a selection of rare spirits, including bottles of whisk(e)y – both Bourbon and international – and premium Tequila.

“The wine selection is insane,” Tim Stone, Costco Napa’s general manager, told Napa Valley Features. “I came here from Lodi [another Californian city], and our wine selection had around 70 to 90 SKUs. Here in Napa we have over 174 SKUs, almost double of what we had in Lodi. There is a lot of wine.”

According to Costco wine steward Selman Medina, Napa’s Costco store has some “inviting” prices on Bordeaux wines, alongside a selection of domestic wines, including bottles from Stag’s Leap Wine Cellars, Far Niente and Shafer, which are not usually stocked at other Costco stores.

Mouths to feed

Speaking exclusively to the drinks business, Garen Staglin, owner of Staglin Family Vineyard said: “I believe most of us in the valley are happy with the Costco opening. Harvest time is one where we have a lot of mouths to feed daily for breakfast and lunch for our vineyard and winery staff. It’s an ideal place to buy quality food at volume and at good pricing.

“Most of the smaller family-owned wineries like us don’t sell (or don’t have enough wine to sell) to Costco. We do hope, however, that it will bring more consumers to the Napa Valley from neighbouring communities and more tourism and winery visits as a result.”

Napa’s winemaking community is not unduly concerned about the new Costco store negatively impacting the image of Napa Valley.

Speaking to db, Teresa Wall, senior director of communications for Napa Valley Vintners, revealed: “What I can say is that Napa residents have been shopping at Costco in neighbouring counties for years, so everyone I know is ecstatic to have a Costco here in town.”

Indeed, there are thought to be an estimated 27,000 Costco members in the city of Napa alone.

It’s not only bricks and mortar Costco stores that are doing well. In 2019, Costco knocked Amazon off the top spot to be crowned the United States’ favourite online retailer. The American Consumer Satisfaction Index surveyed 300,000 online shoppers across 46 different industries, to gauge levels of customer satisfaction, with Costco coming out top for online shoppers.

Rising spirits

Luxury spirits too are flying off the shelves at the new Napa Costco, with a 750ml bottle of Eagle Rare 20 Year Bourbon currently priced at US$2,399, a whiskey which resells anywhere from US$4,500 to $10,000.

Similarly, a 750ml bottle of US$1,999.99 Buffalo Trace Old Fashioned Cooper Bourbon can fetch upwards of US$5,000 on the secondary market, depending on the year.

Despite being known for its low prices, Costco stores around the world count fine wines among their inventories. Last year, db revealed that Screaming Eagle was found in a Costco store in Newark, California, priced at US$3,699.

In the UK, Costco was recently selling a six-bottle case of Château Lafite Rothschild Premier 2019 for US$£2,959.99 but it is now out of stock.

Still available in UK Costco stores are six bottles of Château Angelus St Emilion for £1,549, and six bottles of Château Lynch Bages Pauillac 202o for £529.99, among expressions from many other top producers.

No different than toilet paper

The retailer has come a long way since 2012 when Annette Alvarez-Peters, Costco’s director of wine buying at the time, caused uproar when she slammed wines as “just a beverage” and “no different than toilet paper.”

While many were irked by the comparison, one commenter on db’s coverage of the controversy highlighted the other side of the coin: “What each of you who are in an uproar fail to understand is that she is not badmouthing wine… She is simply stating a fact. Her responsibility to Costco is to buy the best possible wines for the best possible prices and to objectively perform her function,” wrote Mark J.

“The fact that she is not a wine enthusiast is a plus for her role in Costco. She is not a reason for wine costs to skyrocket as she buys objectively. I am happy she is in the position she is in, as it brings us the consumer, great wine for decent prices, and not inflated price levels. She gets it – and so do we if we shop for wine at Costco.”

 

 

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