Costco brews up an innovative new brand
Monday, February 16th, 2009
A substantial brand shock is about to hit the frothy world of Anheuser-Busch, MillerCoors and other US beer makers whose business is driven largely by media campaigns. They’re about to receive a hard lesson in hops and malt from a new line of high-quality and extremely affordable craft beers, a line that will require virtually no advertising itself.
These new microbrews will come from a national retailer precisely geared for high volume sales. And did we mention that this retailer already has enormous brand loyalty–built from the ground up over decades of direct brand experience?
Raise a glass to Kirkland Signature craft beers
Yep, it’s a line of craft beers from one of the today’s best brand innovators: Costco. Costco’s brand strategy is to push the price/quality envelope beyond the reach of conventional marketing approaches. Those approaches typically view brands as stylized sales stimulants, as commodity wraps to help boost sales. They rarely innovate to deliver new value–and that’s where Costco shines.
Tastes great, less billing
Costco will initially be offering Kirkland Signature pale ale, amber ale, hefeweizen and lager beers. A 24-pack will set you back $17.99. The SF Chronicle says that’s about what you’d pay for 12 bottles of a premium microbrew at Safeway. The Costco beers are said to be brewed by Gordon Biersch, a well-known maker of craft beers.
Bud and Miller: reaping what they’ve sown
Truth is, while Bud and Miller were focused on brewing ad campaigns, American beer drinkers developed a taste for beers with character–in the beer itself, not on the tube. The result was a flourishing microbrew revolution, and–ultimately–a barrel-sized opening for Costco in the fast-growing microbrew segment.
From one observer:
It is increasingly obvious to a substantial segment of the population that neither Bud nor Miller tastes great. The production of high volume, high quality Costco-branded beer will only magnify that realization and could be a serious challenge to the market dominance the large breweries have enjoyed for several decades.
And another:
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’s next step: some design innovation
At some point, Costco will have to come up with a more refined Kirkland Signature mark for premium lifestyle products such as Kirkland Signature wines and craft beer. The current blocky mark is fine for utilitarian goods, but when you pour or drink an outstanding wine or beer the label is part of the experience. Design-wise, it should captivate the eyes, stimulate the palate, and go down smoothly.
Image: Costco
