27 Years Ago, Costco Made One Hell of a Smart Business Decision

A look at the Costco Kirkland Signature brand's history and rise to fame.

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To spot Kirkland Signature brand batteries, wine, toilet paper, cereal, Kirkland Signature anything in another person’s home is to acknowledge that they are part of a special club. For years I would look upon the white, black, and red logo enviously. Even though I wasn’t a card-holding Costco member, I knew that label a mile away, a testament to the strength of the megastore’s branding. So how did Kirkland become America’s biggest consumer packaged goods brand? And why is it so successful? According to a CNN Business report, simplicity may be the key.

Think about your other favorite stores, like Target for example. You grab your Good & Gather foods, your up & up cleaning supplies, your Boots & Barkley pet products, your Wild Fable clothing—you get the picture. While the avid shopper might recognize those as Target finds, there’s not necessarily a connecting thread between them that screams “Target!” At Costco, on the other hand, you know a Costco item when you see one—Kirkland Signature is essentially synonymous with the brand.

The decision to slap that label on everything (groceries, booze, household goods, even the clothing) came about in 1995. Costco’s co-founder and CEO at the time, Jim Sinegal, tells CNN Business, “The conventional wisdom said that you had to have a different name for every class of product that you had—a la Sears Roebuck with the Kenmore appliances and the DieHard batteries and the Craftsman tools . . . We looked at it and we said, you know, we’re in so many countries and we have such a wide array of products we’ll have a room full of attorneys that are doing nothing but trying to clear these names.”

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Once the name “Kirkland” was cleared in every country and every product category the store would have, it became the one-brand-fits-all for everything from diapers and tires to, most recently, hard seltzers and furnace filters.

But it’s not just for legal ease—the single recognizable brand cuts down on choice paralysis. As a Costco newbie, I can attest that walking into the store feels overwhelming and chaotic. Those black, white, and red labels are tiny beacons of hope throughout the store, promising in most cases the best deal from a brand you know and love, just grab the Kirkland and go.

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CNN Business points out that putting all your eggs in one basket (or in this case putting your eggs in the same basket as your wrenches and slippers and garbage bags) is always a huge risk. But considering that Kirkland raked in $58 billion in sales in the last fiscal year, it seems it’s a risk that’s paying off big time for Costco.

If you have opinions about what the best Kirkland product is, you know we want to hear them.