Alberta craft whisky lands on Costco shelves as trade war looms

Craft producers of Alberta whisky are getting a boost ahead of their busiest sales season and a looming U.S. ban on Canadian alcohol, as Costco liquor stores across the province have begun carrying a selection of locally made whiskies.

Last week, the retailer started stocking eight products from seven small Alberta distilleries at its 15 liquor stores, from Medicine Hat in the south to Grande Prairie in the north.

“If you’re into Alberta whisky, you’re gonna see it’s slightly different at each Costco,” said Bryce Parsons, president of the Alberta Craft Distillers Association and co-founder of True Wild Distilling, whose liquor is being stocked at Calgary’s Heritage Costco location.

The liquor store at the Costco Tsuut’ina in southwest Calgary has whisky from Wild Life Distillery in Canmore, Bridgeland Distillery in Calgary, Anohka Distillery near Stony Plain in Parkland County, and Eau Clare Distillery in Diamond Valley.

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“People know what they want but this allows them to explore something new,” said Brian Lerner, manager of Costco Tsuut’ina liquor store, who said customers are increasingly interested in supporting locally made products.

“People want to buy things that have been made and produced with care from the people around us,” Lerner added.

Whisky from The Maligne Range distillery in Jasper and Burwood distillery in Calgary are also included in the Costco showcase.

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While all of the distilleries provided information for Costco staff to be able to educate customers about the products, representatives from participating producers have also been visiting stores to offer tastings and educate customers about Alberta-made whisky.

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“I think overall, people find it extremely exciting and very happy that someone like Costco — who has a great reach to Albertans — that they’re supporting an initiative like this, at this time,” Parsons said.

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Earlier this year, the Alberta government introduced the Alberta Whisky Act, which lays out the requirements on how products can qualify for the Alberta Whisky designation, similar to Canadian Whisky branding.

A Costco rep attended a party to unveil the association’s Alberta Whisky logo back in July, which Parsons said got the ball rolling.

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Getting a product into Costco is no easy feat.

Costco stores carry roughly 4,000 unique items, whereas standard big box stores like Walmart have over 100,000 different products.

Because the retailer is highly selective about what it will stock, suppliers have to be able to demonstrate their product delivers exceptional value to members, can generate strong sales, and can be produced and distributed reliably at the scale the warehouse demands.

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As a result, smaller brands often can’t produce the volume required to get their product a coveted space on a Costco shelf.

“I can’t imagine the challenges that some of these distilleries might have to meet — the kind of quantity requirements that we have in our buildings,” Lerner said.

He said it’s fantastic the local producers and the retail giant were able to come to an agreement.

“To get into our market, to put them on our shelves, to promote them the way that we like to promote them and provide that opportunity — it is only going to open the door for more and more of this to happen as time goes on.”

The rollout comes as the industry prepares for the United States’ planned ban on Canadian alcohol imports, scheduled to take effect Sept. 29.

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Canadian wine, beer and spirits producers sell the vast majority of their products within Canada, but the overwhelming majority of the small amount that is exported internationally is sent to the United States.

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“Whether we’re selling there or not, it’s quite important because all of us plan to sell in the U.S. So now there’s uncertainty,” Parsons said.

Inter-provincial trade barriers within Canada, coupled with Alberta’s very competitive liquor retail scene, add to the challenges for small producers.

“We have a very, very, very competitive province, our free-market nature has a lot of products in this province — which is great for the consumer, but makes it very hard for the producer here to stand out.”

The timing of the Costco deal is significant for Alberta distillers.

Parsons said the three-month period leading up to Christmas is typically the busiest season for spirits sales, making the expanded retail presence especially valuable for the province’s growing whisky industry.

“Teaming up with someone like Costco, who reaches out to Albertans very effectively, is incredibly important for us in helping that and giving us a revenue boost right when we need it.”

Despite the potential challenges posed by trade disruptions, Parsons said producers are focused on adapting.

“We’re not throwing in the towel based on trade,” he said. “We’re problem-solvers as well.”

Business leaders say the initiative reflects broader support for Canadian-made products.

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Ruhee Ismail-Teja of the Calgary Chamber of Commerce said consumers and businesses have increasingly rallied around buying local.

“This moment is one of the more unique ones that we’ve seen in the last several years where people are all rallying together,” she said. “Consumers are on the same page as large businesses and small businesses that we all really need to support Canada.”

According to the Government of Canada’s Trade Commissioner Service, Canada exported $1.36 billion in alcoholic beverages in 2023 and 90 per cent of those exports were sent to the U.S., with two-thirds being for spirits alone, including rye whisky, gin and vodka.