The Popular Brand That Makes Costco's Yogurt

Costco hosts several attractions to lure customers in the door, like its hot dog combo that still costs only $1.50 in the food court, but its affordable price on frankfurters pales in comparison to the draw of its Kirkland Signature brand. Kirkland Signature boasts a plentiful portfolio of affordable merchandise, from diapers to batteries and even dog food. However, Costco doesn't actually produce these trademark products.

To avoid high distribution and production costs that would raise the price of its kaleidoscope of goods, Costco partners with various companies to manufacture products under its famous brand. Because of this, Kirkland Signature's coffee was once made by a nationally acclaimed brand, and even its vodka production is outsourced. Costco's 3-pound tubs of organic Greek yogurt have a supplier that is contracted out as well, and although no particular company has claimed to be in control of manufacturing Kirkland dairy, the truth may just be in the details.

In 2014, a press release from yogurt conglomerate Ehrmann Commonwealth Dairy indicated the business was releasing a new organic strained Greek yogurt to be distributed by Costco in San Francisco, with expanded distribution soon after. Peter Cohan, a businessman associated with Ehrmann, also spilled the beans in his book "Disciplined Growth Strategies" published in 2017, stating that the company sold Greek yogurt under private labels to several retailers. Costco was reportedly one such store.

Ehrmann has produced dairy products for over 100 years. The company was originally based in Germany, where it introduced cold-stirred fruit into yogurt for the German population in 1964. In 2011, Ehrmann built its first U.S. subsidiary in Brattleboro, Vermont. Today, Commonwealth Dairy operates as a joint venture between Ehrmann U.S.A. and Commonwealth Yogurt, owned by Lactalis Group of France — the self-proclaimed largest dairy product manufacturer in the world.

Commonwealth Yogurt mainly functions as a co-packer for private labels. The Vermont location (as well as another facility based in Arizona) produces yogurt and other dairy products for businesses such as Liebe and Green Mountain Creamery. Costco's Kirkland Signature trademark may also be on the list of brands that benefit from Commonwealth Yogurt's manufacturing expertise, but to date, neither entity has confirmed or denied the speculation.