FOOD NEWS
What Is 'White-Labeling' At Costco And How Does It Affect Your Wallet?
By Elias Nash
Costco offers a much narrower selection than most supermarkets, as it usually only offers the private-label brand Kirkland instead of multiproduct brands. Brands like Kirkland seem like alternatives to name brands, but in reality, they are often the same product with different packaging, a practice known as ‘white-labeling.’
Products sold under brands like Kirkland are made by third-party manufacturers who produce these items in bulk and sell them to retailers. This ‘white-labeling’ practice means that multiple retailers are selling you the same product while giving the impression that they are different.
While it may seem deceptive, it’s much more efficient and reliable for Costco to contract specialized manufacturers, as this increases the profit margins for retailers, who can create long-term, bulk-order contracts. White-label goods are made by the same big-name companies that consumers think they are passing up, but house brand products typically sell for far less than name brands.
It can be difficult to determine which manufacturers supply stores like Costco since both parties keep these deals secret; for example, Kirkland batteries are made by Duracell. It would be nice to see more transparency from these brands, but ultimately, white-label products are a boon to customers, who can get the same products at a lower price.