Napa Costco Opens: Where Wine Is No Different Than Toilet Paper

Napa Valley just got its first Costco—stirring up excitement, debate, and, I’ll admit, a tinge of loathing from me. This is no ordinary warehouse; it’s a 160,000-square-foot Costco boasting the largest wine collection of any location in the country. For Napa residents, winemakers, and wine lovers, it’s a mixed bag of enthusiasm and skepticism. On October 18, locals queued up to browse shelves stocked with everything from Bordeaux to bottles of Shafer and Stag’s Leap, while some in the wine industry wondered what Costco’s 'value-driven' wine strategy might mean for Napa’s treasured terroir and the boutique wineries known for their carefully crafted bottles and intimate tasting rooms.

To understand the excitement—and the tension—around this new Costco opening, let’s rewind to 2012. That year, Costco’s wine buyer, Annette Alvarez-Peters, made waves by suggesting that wine is “just a beverage,” no different from “toilet paper.” For some, her comments underscored Costco’s mission: to commoditize wine by securing bulk deals that allow it to offer lower prices, often sidestepping the traditional three-tier distribution system that allows wineries, distributors, and retailers to share the profits. Costco’s strategy, which focuses on high volume and value pricing, has made it a powerful player in the wine market, but it’s also led to tension with smaller producers who worry that their wines could be outpriced and overshadowed.

And yet, not everyone sees Costco’s expansion into Napa as a threat. Many in the valley, like Garen Staglin of Staglin Family Vineyard, welcome the arrival, noting that it’s a convenient and cost-effective option for food and supplies during the busy harvest season. Costco’s potential to bring more tourists and new consumers to Napa Valley is also seen as a positive. Teresa Wall, senior director of communications for Napa Valley Vintners, remarked, “Everyone I know is ecstatic to have a Costco here in town.”

For Napa wine enthusiasts, the Napa Costco is a treasure trove of bargains on premium wines. Costco’s new collection includes everything from accessible bottles of Stag’s Leap Wine Cellars to high-end spirits like Eagle Rare 20-Year Bourbon, listed at a “value” price of $2,399 (a fraction of its secondary market price). In some ways, Costco’s presence in Napa mirrors its nationwide appeal: affordable luxury. The American Consumer Satisfaction Index ranked Costco as the top U.S. online retailer in 2019, reflecting its reputation for quality at unbeatable prices.

But for local Napa wineries, the Costco model raises critical questions about the future of fine wine. Costco’s strategy, anchored in the notion of wine as a commodity, is a departure from Napa’s traditional focus on craft and provenance. The three-tier distribution system that Napa’s wineries rely on may not compete with the price-slashing potential of Costco. And although many smaller, family-owned wineries in Napa don’t supply to Costco, some worry that the convenience and pricing of Costco wine could shift sales from their unique, small-batch offerings.

For now, Napa’s new Costco is a landmark because we all need to buy hot dogs in bulk. The ultimate source for emulsified beef and pork trimmings invites customers to enjoy high-quality wines at discounted prices while underscoring a shift toward wine as an everyday commodity. As more residents and tourists flock to the store, primarily for toilet paper because that is in fact their top selling product, the Costco effect in Napa Valley will reveal itself, bottle by bottle. Whether this will spark greater accessibility for Napa wines or commoditize a region that rivals Bordeaux and Burgundy for vinification (Steven Spurrier understood) —but one thing is certain: the Costco in Napa is open for business.