On Wine: Price is just one reason for Costco’s booming wine biz

According to the  Seattle P-I, “Costco Wholesale, the Seattle-area-based discount shopping club, is now the largest retailer of wine in the country. With 290 stores in the United States, 400 worldwide, Costco has become the $600 million wine gorilla loved by consumers and suppliers and feared by other retailers.

“To put that figure into perspective, Canandaigua, the world’s second largest wine company (behind E.&J. Gallo) had to produce and then sell 45 million cases of wine to create sales of $863 million and profits of $110 million during its past fiscal year. Costco hit its mark with eight regional wine buyers led by one global wine director. With margins conservatively at about 10 percent, it’s easy to see how important wine has become to the retail behemoth.

“Primarily due to its pricing, Costco has always been a formidable wine retailer. But things changed dramatically in September 1998 when David Andrew, a native of Scotland with wine experience in Europe, met with top management to discuss creating a corporate position to oversee all wine operations. “It was one of those once-in-a-lifetime circumstances when the timing was just perfect,” says Andrew, who got the top job.”

Read the rest of the article.