Costco employs lead wine buyer Annette Alvarez-Peters, who is considered one of the most powerful wine buyers in the world and oversees the retailer's massive wine business. According to a 2012 report by CNBC, "Costco is the world's largest importer of high-end French wines."
Much like the liquors mentioned above, the Kirkland wines are usually just less-expensive versions of other well-respected wines.
Surprisingly, a wine lover's paradise...
As Costco's head of wine purchasing since 2003, Annette Alvarez-Peters is the most powerful person in the wine industry whom you've never heard of — and quite possibly one of the most powerful people in the wine industry overall. Alvarez-Peters is responsible for purchasing over $1 billion of wine for Costco every year.
That buys Alvarez-Peters and Costco a lot of influence and power, too.
Costco and Wine
Costco has 337 stores in 34 states. They don't sell wine in every store, but they do sell wine in a lot of them — and a lot of wine too, but there are only about 200 different wines that are sold in Costco. Annette Alvarez-Peters, who manage a team of 17 wine buyers in America and around the world, has the final word on which ones make the cut.
She also sets the prices, never more than 15% higher than cost. Given how much wine Costco buys, they are able to demand fairly low prices from their suppliers which they then pass along to customers. This also forces other wine sellers to keep their own prices low.
Annette Alvarez-Peters and Wine
Not everyone in the wine industry is happy with Annette Alvarez-Peters, and it's not because they think she has too much power. Discontent has developed because she has no previous experience in the wine industry (she used to work in Costco's auto parts and electronics division) and doesn't treat wine with the respect many people think it warrants.
During a CNBC special, "The Costco Craze: Inside the Warehouse Giant," Annette Alvarez-Peters made comments which have generated a lot of backlash:
Alvarez-Peters: "Is (wine) more special than clothing, is it more special than televisions? I don't think so."
CNBC's Carl Quintanilla: "Certainly it's different than toilet paper? Or different that tin foil?"
Quintanilla: "Because it's personal."
Alvarez-Peters: "People can look at it that way. But at the end of the day, it's just a beverage."
Wine as a Beverage
Obviously wine is a beverage, but the question is whether wine is justa beverage, no different from any other, and thus essentially no different from anything else a retailer might sell. This perspective might seem natural for a massive retailer like Costco which is responsible for buying and selling so much of a product.
Why wouldn't they view wine more casually than those who are more deeply involved in the industry? Nevertheless, it's certainly not necessaryto adopt such a perspective on wine. David Andrew, the Costco buyer whom Annette Alvarez-Peters replaced, was described as a "real wine lover."
Wine: for the Masses, from Costco
It's understandable if "wine lovers" object to wine being taken off of a pedestal. However, when the pedestal is raised too high it is raised beyond the reach of the average person. It's one thing to want to treat wine as special, given its place in culture and history, but quite another to make it so special that people turn away from it.
If treating wine like a regular beverage helps bring more people to wine — brings them to try new wines, to try more wine, to become more comfortable choosing different wines for different foods — then that attitude serves a valuable purpose. And if that bothers someone, then no one is compelling them to buy their wine at Costco, right?