Costco hits pause on Kirkland product members want | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

There’s a reason so many people enjoy shopping at Costco and are willing to pay a membership fee to get in the door.

Joining Costco means gaining access to a host of perks. You can get new tires at Costco, book a vacation, or purchase insurance for your car, home, or pet.

But many members will tell you that the main benefit of joining Costco is getting huge savings on everyday grocery products and household staples like tissues and toilet paper.

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Costco is able to offer members such incredible savings by keeping its inventory on the small side and negotiating great deals with its suppliers.

And if Costco can’t find a great product to offer at an affordable price, there’s another solution — Costco can simply opt to produce its own version under the Kirkland label.

Costco hits pause on Kirkland product members want.

Image source&colon; Costco

Costco’s Kirkland label tends to mean savings and quality

If you roam the aisles of Costco, you’re apt to notice the Kirkland name on a host of food and household products.

Named after Costco’s original headquarters in Kirkland, Washington, the company has a unique strategy with its store brand, and it’s to put the Kirkland Signature label on every product made exclusively for members.

Other retailers, like Target, have different brand names for different product lines.

Costco, however, intentionally produces all of its products under the Kirkland name because it believes in the label’s reputation.

Sometimes, when you pick up the store brand of whatever it is you’re buying, you have to worry a little that the taste will be off or the quality will be sub-par. That’s not the case with Kirkland, though.

Costco members who buy Kirkland products know they’re getting items that are not only competitively priced compared to national brands, but also high in quality.

Costco hits pause on in-demand Kirkland product in development

Because Costco has such high standards for its Kirkland brand, it can take a while for a new product to end up on the shelves.

As Costco CEO Ron Vachris told The Wall Street Journal, with Kirkland products, the company aims for “a little bit of extra differentiation from the national brand” as well as a better price.

That’s a lot of pressure, though, especially in the context of everyday grocery items.

It’s not all that difficult to produce a bakery product that really stands out. It’s a lot harder to do that with something like a condiment.

It’s for this reason that Costco has not been successful in launching its Kirkland Signature mayonnaise.

Costco tried enhancing its mayo by adding omega-3 fatty acids to its recipe. That would’ve allowed the company to promote its version as a healthier mayo.

But adding those omega-3 fatty acids made Costco’s mayo destabilize. As a result, Costco had to pull the product altogether. The company wasn’t willing to simply go with a tried-and-true recipe because that wouldn’t be special enough to offer members added value.

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All told, it’s a disappointment to see Costco fail in the mayo game, since it’s a staple item so many people use regularly. And it would be nice for members to be able to stock up on the cheap.

But there’s a huge silver lining here.

By pulling its mayo, Costco has proven its commitment to quality Kirkland products. That’s something members should feel good about.

Maurie Backman owns shares of Costco.