Ever driven to Costco just to get a mouthwatering rotisserie chicken? At just $4.99, it’d be stupid not to – even when you factor in the cost of gas. But when you next chow down on one of these bargain birds, consider this: there’s a big price being paid. And you eventually may be the one having to cover that cost.
You won’t be confronted with that price at Costco, of course. Rotisserie chickens have remained at a steady $4.99 there since 2009. And plenty of the birds are flying – although not literally! – out of the doors. We know this because a Costco boss spilled the beans.
In a 2018 interview with NPR, Costco head of external affairs Jessica Kolterman revealed something astonishing. At that time, the big-box store was selling about 60 million chickens each year in the U.S. alone. That’s a whole lot of birds! And it means either the retail giant is missing a trick when it comes to profits – or it’s gone to extreme lengths to secure this price.
But despite growing concern about the brand’s birds, they have become somewhat of a cult item. They even have their own Facebook page with over 18,000 followers! Not everyone is so smitten, though, and that could be because they know how Costco secures such a plentiful flow of chickens on demand.
It’s weird, too, that Costco is adamant about keeping the cost of its chicken down. Many members wouldn’t quibble about paying an extra dollar or two on top of that $4.99. We bet sales wouldn’t be much affected, either. So, could the whole thing be an error? And is it Costco that’s having to pay the price?
As one of the largest retailers in the world, Costco has its price points all figured out. That means the low cost of the chicken definitely isn’t an error! It’s been carefully analyzed, and $4.99 is the amount the company is sticking at.
Even more puzzlingly, as competitors have continued to gradually increase their prices, Costco hasn’t budged. And it’s this decision that hints at a darker truth. If Costco isn’t having to eat the cost of the chickens, who is?
Obviously, Costco isn’t making all its profit through the chickens alone. How can it when the birds are so cheap? Maybe there’s something else that Costco is buying low and selling high to make up the shortfall. Maybe it’s the producers of that item who are paying the big price.
Well, you’d be surprised! According to Costco CFO and executive vice president Richard Galanti, there’s no secret weapon in the company’s arsenal. In fact, the store is losing a lot of money by selling the chickens. And we mean a lot of money.
It turns out that the rotisserie chickens have been setting Costco back somewhere between $30 and $40 million each year. And even after divulging this staggering sum, Galanti remained blasé about the company’s decision to stick with its $4.99 price, saying, “That’s us, that’s what we do for a living.” But what exactly is it that they’re doing?
According to Galanti, the firm’s finance supremo, Costco has consistently been willing to “eat” close to $40 million in revenue. This is supposed to reflect the business’ commitment to good value for its customers. Sounds kind and caring, right? But there’s a sinister truth behind those cheap birds.
In 2019 the non-profit Food & Water Watch left a scathing review of the retailer’s controversial approach. In an article on its website, the group claimed, “Costco has been plotting to… wreak havoc on Midwest agriculture so they can keep their hot ticket item cheap.” Pretty bold statement!
Food & Water Watch essentially suggested that Costco is exploiting someone somewhere down the line. And it probably won’t surprise you to learn that remaining firm on that $4.99 price point could actually be benefiting the company.
Let us explain! The scrumptious rotisserie chickens likely work as a lure for customers – or a ‘loss leader.’ By keeping the rock-bottom price artificially low, the highly popular chicken is guaranteed to be in hot demand. And luckily for Costco, that risky move seems to be paying off. According to figures in a 2014 edition of The Seattle Times, sales come in at close to one bird each for every one of the 78.7 million Costco members.
And by setting itself apart from its competitors by pricing low, Costco guarantees a higher footfall in its stores. So, despite losing out on a few dollars per chicken, the company makes up for it with customers’ other purchases once they’ve stepped through the doors. Makes sense, right? How many times have you gone into a supermarket with just one thing in mind, only to be enticed into buying more than you needed?
It’s the same deal with the chickens. By placing the coveted birds at the very back, Costco hopes that consumers will be tempted by other products along the way. But this merely scratches the surface of the company’s sneaky tactics.
Take the taste of Costco’s chicken, for example. It’s not bland, meaning the company must have some special flavoring secret at its disposal. But as this costs money Costco doesn’t have, what gives? Well, the answer lies with an injection that takes place before the birds have even made it to store.
Each bird is pumped with 460 milligrams of salty liquid. That’s close to a third of your recommended daily intake of sodium, according to the American Heart Association. Yup, if you’re partial to eating a chicken all by yourself, you may find yourself over the salt limit. And that makes us wonder what else Costco is willing to disregard to turn a profit.
The real secret? Costco’s had to make a controversial business move to sell its popular chickens. You see, according to the USDA, the number of whole birds sold has fallen from 50 percent in the 1980s to just 15 percent today. And so to get the amount of chicken it needs, the big-box store has had to take things into its own hands.
Over the last 50 years, birds have been bred larger and larger to supply the growing appetite for portioned cuts of meat. Unfortunately for Costco, though, these chickens aren’t a good fit for the rotisserie. And with the global supply chain no longer an option, the wholesaler had to return to the drawing board. Its approach has caused a real furor, too.
Basically, Costco needed to think fast and think big. And its solution to not compromising on price was this: an entirely new company, a total overhaul of its business model, and a staggering $450 million investment. Not dramatic at all!
In order to maintain an ample stock of chickens that were all the right size, Costco decided to monopolize the chicken production process – right down to the hatching of the eggs. The monumental business venture came to life in Fremont, Nebraska, and it didn’t materialize without backlash from the local community, who have proudly farmed the area for generations.
Ultimately, this business was set to provide a staggering 40 percent of Costco’s annual chicken supply. That’s about 100 million chickens every year! And the threat of such an imposing plant – all 400,000 square feet of it – was certainly felt by the people living nearby.
The company formed to deal with Costco’s mammoth move into farming, Lincoln Premium Poultry, had its potential sites positioned on the border of Iowa and Nebraska. But that’s a place already brimming with factory farms. As of August 2018, in excess of 10,000 of these facilities were already functioning in the area. No wonder the locals fought back.
Ruth June had relocated to Nebraska in 1962 with her late husband Bob, and she had always loved the peace in her neck of the woods. In a 2018 interview with Nebraska Public Media, she said, “This is a nice, quiet neighborhood. Nice people. Everybody gets along.” Until Costco got involved, that is. She predicted, “Now, we’re going to be shut up in our houses because we can’t stand the smell outside?” Fair point.
And Kolterman didn’t do much to dispel Ruth’s concerns about lingering odors, “I’m not going to sit here and tell you you’re never going to have a smell in the course of this operation. It’s a farm… That’s just the nature of agriculture,” the Costco boss replied. But a bad stench in the air isn’t the worst issue.
There’s the environmental impact to consider, too. Randy Rupper was part of the local group Nebraska Communities United, and he was concerned about the grim reality of all that manure. In 2018 he claimed that “millions of pounds” of the stuff would cover the surrounding fields. Unfortunately, manure means chemicals, which equals a whole lot of nitrogen and phosphorus making its way into local waterways. And that’s very bad news.
It’s all known as farm runoff, and it’s usually caused by rainfall or irrigation. On farms, though, there are potassium or nitrogen from fertilizers, pesticides, and even certain metals. And you may have already guessed what can happen when these chemicals enter our water sources.
Yep, you guessed it – pollution. And it’s one reason why Food & Water Watch was particularly opposed to Costco’s mammoth new plant. According to the non-profit, the area was already crippled by what it described as “severe pollution” from intense industrial agriculture in the Midwest. Apparently, over 1,000 miles of streams and rivers had already been harmed as a direct result of factory farming. But it doesn’t end there.
The adverse effects of farm runoff have also been seen at several state park beaches. Food & Water Watch found that in 2017, the advice at 37 bathing spots was ‘Swimming Not Recommended.’ And according to the National Water Quality Inventory, this form of pollution was one of the leading causes of contaminated water in 2000. Worryingly, this is still true more than 20 years later.
But it’s simple, right? Just don’t swim in those waters, and all will be okay. Not quite. Iowa – which is right next to Costco’s sprawling new poultry facility – has already felt the effects of factory farming on its drinking water supply.
The Des Moines Water Works is Iowa’s largest facility for treating drinking water, and it’s revealed the disturbing effects of industrial-scale farming on the surrounding community. In 2015 nitrate pollution surpassed federal limits in 11 of the state’s water supplies. And in certain conditions, that can be extremely dangerous. It’s no wonder that Nebraskans feared the effects of mass farming in their own region.
Due to the volatile way that nitrates can react once they’ve been ingested, this type of water pollution has been linked with certain birth defects and certain types of cancer. But for the citizens of Fremont, that wasn’t the only bone they had to pick with Costco.
Costco’s choice of location for its state-of-the-art poultry farm wasn’t made by sheer chance. The company knew that Nebraska is one of the U.S.’ biggest farming states. And for its new business to prosper, the huge chain would have to get the local farmers on side.
Seeing as one in four jobs in Nebraska are agricultural, this shouldn’t have been too hard a task. But while Costco was offering 15-year contracts to participating farmers, there were still widespread concerns that they would be exploited by the mega-firm. Basically, these deals could trap folks in an unfavorable position.
A young farmer in the area, Marshall Lutjens, raised a concern that was shared by many. In 2018 he told NPR, “My biggest thing is if something ever happened to the company, who’s going to fill the barns? Because you’re putting a lot of money down for barns.” In other words, should any unforeseen circumstances crop up, there would be little to no compensation offered to the farmers. And with the livelihoods of so many farmers hanging in the balance, it’s clear that Costco’s low prices really do come at a cost.
These honest, hard-working folks could be left high and dry – and it would make barely a dent in Costco’s profit margins. But there’s a more obvious threat posed by the intruding company. And it’s all to do with Nebraska’s time-honored farming system of family ownership.
Here’s the deal. After the Costco project was launched, a North Carolina investor applied for ownership of a staggering 132 chicken houses. A generous investment, right? Seems great. The only issue is that North Carolina is more than a thousand miles away from Nebraska. And locals are concerned about these absentee owners for good reason.
Andrew Tonnies lives in Dodge County, and he was worried that people investing from out of state would be less likely to have the best interests of the community at heart. In 2019 he told the website Food and Power, “These people coming in… are they just interested in the economics of extraction?” And he has a point. Before the plant was even being built, local farmers were reportedly already being pushed out of their right to farm ownership by wealthy folks with their eyes on the prize.
So it seems the true cost of Costco’s rotisserie chickens is a far cry from their bargain price tag. Only time will tell whether the farmers involved in the project will be exploited, or whether the local landscape will be drastically impacted by pollution. For now, though, let’s take Lincoln Premium Poultry at its word and hope it will stick to its seemingly sound code of ethics.
And if you ever come across a chicken with a Lincoln Premium Poultry label, at least you know where it was raised and who raised it. Those Kirkland products you see at Costco, though? We’ll let you into a little secret. Some of them are actually secretly produced by big-name brands. Yep, you can pick up premium goods for cheap if you know where to look – and we have all the deets.
Once upon a time, the supplier of Kirkland Signature bourbon was apparently none other than Jim Beam. Nowadays, though, Costco sells a Tennessee straight bourbon whiskey that may come from another famous brand. Yes, while it hasn’t been confirmed, those in the know believe that George Dickel produces the liquor for the big-box store.
Crystal Creamery acquired California-based Humboldt Creamery in 2009 and kept the brand afloat – meaning it could manufacture frozen sweets for other labels. So, while it’s not confirmed, it’s likely that Humboldt makes the Kirkland Signature vanilla ice cream. That’s despite the fact that the firm’s own-label products sometimes appear in their own packaging at Costco.
When you just need a handful of jelly beans, Costco is there with four-pound containers of the snackable sweets. These come in 49 different flavors – all kosher and sans fat. And if this all sounds familiar, you could be on to something. Yes, it turns out that the Kirkland-brand candy is actually from Jelly Belly, the famous maker of gourmet jelly bean flavors.
Costco makes it a mission to supply its Kirkland Signature 100% Local Raw Unfiltered Honey from, well, local beekeepers. Not every state has the producers to make the amount that the big-box retailer needs, though, meaning the company sometimes has to create a blend from bees across the U.S. And if you live close to Colorado, your Costco jar may come from Rice’s.
You can find some Ocean Spray-branded products at Costco – like the dried cranberries, for example. But you can get more from the company than just a sweet salad topping if you know where to look. Grab Kirkland Signature Ocean Spray Cranberry Premium 100% Juice, and you actually have a sugar- and-preservative-free product from the trusted brand.
Kimberly-Clark is the company behind a slew of trusted diaper brands – Huggies included. It also makes Kirkland Signature Diapers, as confirmed by Costco’s financial chief, Richard Galanti, in 2017. During the same interview, Galanti similarly divulged that Procter & Gamble – the makers of Pampers – had turned down a deal with the big-box store.
Money-savvy shoppers find that Kirkland Signature White Albacore Tuna is ever so slightly cheaper than the Bumble Bee brand. Well, guess what? Bumble Bee supplies Costco’s tins of tuna, too, so you can save cash by picking up the big-box store’s version and get the same tasty catch of the day.
No need to clean your contacts – you’re seeing this right. Incredibly, the Kirkland Signature contact solution has identical ingredients to name-brand option Biotrue. That’s how people came to realize that the budget version was actually produced by the same company for Costco.
Costco tries to hide the identities of the manufacturers that make products for its in-house brand Kirkland. But sometimes an unfortunate situation will reveal the truth. In 2019 Townsend Farms had to take some of its fruit off supermarket shelves – coincidentally enough at the same time that Costco recalled its Three Berry Blend.
A product can only be called “Balsamic Vinegar of Modena” if it comes from the Italian region and meets local production guidelines. And Kirkland Signature Aged Balsamic Vinegar of Modena has earned its title because Acetum, a century-old manufacturer in the city, produces its bottles. This isn’t exactly a huge secret, though, as it’s printed on Costco’s containers.
Here’s a little tidbit that may make you want to jump on a plane to Europe: there’s a region in Italy known for making the best Prosecco. If you can’t make a cross-globe journey, however, head to Costco and grab a bottle of its Kirkland Signature Asolo Prosecco. It comes from the famous Veneto area, and it’s cheap considering it’s a bona fide Italian bottle.
Look closely at the label, and you’ll find the secret producer of Kirkland Signature Full Synthetic SAE 5W-30 Motor Oil through the words “Manufactured by Warren Distribution, Inc.” Warren is one of the preeminent makers of lubricant in the U.S., and it sells its products globally under a slew of different names – including Kirkland.
When you’re frazzled after a long day at work, putting a frozen pizza in the oven for dinner seems like a no-brainer. If you’re a fan of Kirkland Signature pies, though, you should know that they’re not an in-house production. Palermo has been making these pizzas since 2012, and apparently Costco is the brand’s largest wholesale customer.
Ti Point winery shares its name with the part of New Zealand that hosted its very first vineyard. Since then, the producer has broken ground on a few more grape-growing outposts. And over the years, it’s sent many of its bottles to the United States, where some of them bear a slightly different name: Kirkland Signature Ti Point Marlborough Sauvignon Blanc.
Want a little cheese to go with all of the wine on this list? Well, you’re in luck, as Costco’s dairy selection is often just as thoughtfully sourced. Take the Kirkland Signature Isigny Ste-Mère Brie, for instance. It comes from a Normandy-based maker with the same name, meaning it meets exacting French standards. And in the States, you can get this premium cheese at a Costco bargain price.
Bolthouse Farms products – which include salad dressings, drinks and bagged carrots – come from a family-run farm in California. And they too hide under the Kirkland Signature label. Yep, that bottle of carrot juice in your cart is a very good deal. Bolthouse gathers, prepares and juices the veggie in a 24-hour span, making fresh blends for its own brand and for Costco.
Have you ever used a box of Kirkland Signature’s 1-Day Disposable Lenses? If so, you’ve really bought contacts from CooperVision. Just make sure you do a price check before opting for the Costco version, as savvy shoppers have noted that the name brand is actually sometimes cheaper than its big-box alternative.
Kirkland Signature Rosé gives away its real producer almost immediately, as that origin story is right on the bottle. Its supplier is…drum roll… none other than veteran winemaker Olivier Sumeire. And Sumeire should know his stuff, too, as members of his family have been in the Provence, France, wine trade since the 1200s.
Costco used to make it clear that it entrusted Mission Foods to produce its store-brand tortilla chips, as the manufacturer’s logo was emblazoned across its Kirkland bags. And while this emblem has since disappeared – leading some to believe that Mission is no longer involved – nothing has been confirmed one way or another. That means your Costco chips could still be from the Mexican food experts – and at a bargain price, too.
Starting your morning with green tea gives you a relatively gentle jolt of caffeine – only a fraction of what you’d get from drinking a cup of coffee. And if you snap up Kirkland Signature Japanese Green Tea, you should know that you’re actually getting it from Japan-based company Ito En – one of the planet’s biggest manufacturers of the beverage.
Tequila can’t be as mysterious as some of the other items on this list. That’s because all varieties of the liquor come with ID numbers that reveal their true sources. So inquiring minds have done the legwork, tracing Kirkland-brand tequilas back to the Mexican liquor and winemaker La Madrileña. And although this partnership with Costco hasn’t been confirmed, the ID numbers probably don’t lie.
Ehrmann is the manufacturer behind such beloved dairy products as LACTO Zero and Yoginos. And it may also be the maker of Kirkland Signature Greek Yogurt if businessman Peter Cohan’s account of the company’s partnerships is to be believed. In his 2017 book Disciplined Growth Strategies, Cohan claimed that Ehrmann had supply deals for private-label retailers – including Costco.
Along with selling cheap food in bulk, Costco provides medical screenings at great prices. You can even get your hearing tested for free. And if you find that your ears aren’t working as well as they once did, you can pick up the Kirkland Signature (KS9) 9.0 Digital Hearing Instruments with confidence. They’re actually made by Sonova, a Swiss firm focused on “innovative hearing care solutions.”
Rumors have swirled that Diamond Pet Foods may be the brand behind Kirkland Signature Dog Food. And the gossip was all but confirmed in 2012, when a recall for Diamond’s products included Kirkland-brand puppy chow. Costco buyers have stuck with the store’s own-label stuff, though, and it remains in-demand with those who have four-legged friends in their homes.
Alexander Murray’s CEO and president, Stephen Lipp, confirmed Costco’s long-standing partnership with the brand in 2016 – nine years after it started making the Kirkland Signature Blended House Whiskey and Single Malt Scotch. If you buy a bottle of the booze, you’ll find the Alexander Murray label printed on it as further confirmation.
You can’t plan a house party without putting red plastic cups on your shopping list. But, luckily, you won’t sacrifice on quality by picking up the Kirkland Signature variety, as they’re made by the trusted disposable tableware maker Chinet. The company has been churning out one-time-use plates, cutlery and cups for nearly a century now, meaning they must be doing something right.
Perhaps you can’t drink from your tap, or maybe you prefer the taste of spring water. Either way, you buy bottled H2O. And by picking up Kirkland Signature water, you can rest assured that you’re getting a high-quality beverage. That’s because Costco sources its bottled water from Niagara Bottling, which sells its eponymous brand in other stores.
Name-brand hair care will cost you – unless you have a Costco membership, where a trusted shampoo-and-conditioner set hides behind a Kirkland wrapper. Yes, the store’s Signature Moisture products are supposedly made by L’Oréal’s Pureology. And while there’s not much evidence to link the two brands, user reviews often compare them. The bottles look rather alike as well.
Costco used to source its baby formula from Abbott Laboratories, which produces Similac. But a change in packaging clued parents into the fact that the Kirkland brand was no longer an Abbott product. Instead, the store’s Signature Pro-Care Infant Formula is now made by Perrigo, which openly shares this information on its website.
Rumor has it that the country’s divided when it comes to Costco beer. On the East Coast, customers can supposedly snap up Kirkland products made by New York’s Matt Brewing. West Coasters, on the other hand, are reportedly getting beer produced by Gordon Biersch. And while none of this has been confirmed, both companies have made requests to the Alcohol and Tobacco Tax and Trade Bureau registry for Kirkland labels – meaning it seems likely.
You can’t call just any old cheese Parmesan. Yep, we’re looking at you, weird can of pre-grated. You see, Italy has a strict set of standards that cheese must live up to to bear the name Parmigiano Reggiano. And you can find a certified block under the Kirkland label. This is actually made by Formaggi Zanetti, which exports Italy’s finest cheeses around the globe.
Costco’s magazine, The Costco Connection, revealed in 2013 that the retailer has worked with Blommer Chocolate Company to source the store’s selection of sweet stuff. But that isn’t all. Together, both Costco and Blommer have collaborated to ensure that they’re responsibly sourcing their chocolate from Ivory Coast-based farmers. You can feel good about snacking on Kirkland-brand products, then, as they help fund the wages of overseas suppliers.
The decision to make Hormel Costco’s bacon supplier wasn’t an easy one. Apparently, a corporate buyer looked at a whopping ten different plants before selecting the trusted brand. But you won’t get the exact same cut of meat. Costco opted to make its bacon a little chunkier, meaning it differs slightly from Hormel’s traditional offerings.
Does a chocolatey-yet-fruity wine sound good to you? Of course it does. That’s what you get from Kirkland’s Côtes du Rhône Villages – a wine produced in France for Costco. If you grab a bottle, you’ll find this information printed on the label. There’s also the name of the winemaker responsible for the tasty pour: Patrick Lesec.
Costco doesn’t do much to hide its ties with Reynolds, as you’ll find the latter brand’s logo on the box of the Kirkland Signature Foodservice Foil. That said, this particular product is bigger than regular aluminum foil, meaning it generally costs more than the Reynolds-brand stuff.
Neither Persil nor Costco will speak about any partnership, but there’s speculation that the famous name brand is behind Kirkland detergent. Why? Well, Henkel, Persil’s producer, acquired Huish – Unilever’s laundry-detergent department and the one-time maker of Costco’s store-brand formula. That could mean Henkel has taken over the job of producing for the private label.
If you’re purchasing batteries, you want to make sure they’re long-lasting. But while you may usually dismiss store-brand varieties, you don’t have to do that at Costco. Duracell – a trusted battery brand – is responsible for the Kirkland-labeled product, as confirmed by the company’s CEO in 2016.
Costco’s bargains don’t start and end with food, as you can get budget-friendly home goods there, too. And you don’t have to sacrifice on quality when purchasing a mattress at the big-box retailer. Stearns & Foster manufactures the Kirkland Signature version, which combines gel and memory foams to make one comfy place to rest your head.
This supplier hasn’t been confirmed, but researchers appear to have found links between Kirkland Signature Vodka and the top-shelf Grey Goose brand. Both liquors are supposedly made with water from France’s Cognac region, for one. You should know, though, that Grey Goose has previously rebuffed rumors of any ties to Costco. And, surprisingly, the big-box store’s vodka has trumped the more expensive option in blind taste tests.
Need your Starbucks fix? Head to Costco, where you can get coffee from the Seattle-based chain. In fact, you’ll find a label that reads “Custom roasted by Starbucks” on the back of some bags. The ones to look out for are Kirkland’s Signature Espresso Blend Dark Roast, House Blend Medium Roast and Decaf House Blend Medium Roast.