The Brand That's Likely Behind Costco's Iconic Bacon

Costco is packed with incredible deals on everything from electronics and home goods to groceries and frozen food. But dedicated shoppers know the chain's Kirkland bacon is among the top values, excelling in both delicious taste and low prices. If it seems just as good as brand-name options at the grocery, that's not a coincidence.

There are some noteworthy signs that Costco bacon is, in fact, produced by cured and packaged meat giant Hormel. The relationship apparently began in the early 2000s, when Costco was struggling to find a supplier that made bacon that met its standards. That led them to reach out to Hormel, which is well-known for its various bacon products in grocery stores.

For a time, this relationship was about as obvious as it can get, with Hormel's name right on the package alongside traditional Costco and Kirkland branding. While that's no longer the case in the United States (though it may still be in the U.K. and Canada), it's unclear whether this is simply a packaging change or a sign they're sourcing their bacon elsewhere these days.

A tried-and-true Costco trick

While the arrangement might seem strange to some, it's really just another instance of white-labeling, a production technique that allows recognizable food companies and others to produce the "store brand" versions of a product using the same equipment and materials as the pricier brand name. The process allows stores to stock high-quality food for their affordable generic brands without building their own production facilities and producers to make extra money and keep their equipment and employees busy. 

Some other popular brands that produce food and beverages for Costco (either secretly or co-branded with Kirkland) include Starbucks, Ocean Spray, Bumble Bee, Jelly Belly, Diamond Pet Foods, and more. Like many other white-labeled products from famous food makers, Hormel's Costco bacon may not be identical to its traditionally branded bacon sold at supermarkets, with some shoppers on Reddit pointing out sometimes noticeable differences in texture. Some even argue some Kirkland brand products are better than the brand name original.

However, there's no arguing with the value, which can save thrifty shoppers several bucks per pound compared to name brands. And that's something bacon lovers everywhere can agree on.

Where the savings come from

But, how exactly does Costco bacon come at such a bargain cost? As anyone who's shopped there knows, selling in bulk is a critical part of Costco's business model. Traditional Kirkland bacon is sold in four, one-pound packs, while thick-cut versions come in two packs at a pound-and-a-half each. Rather than settling for meager profits on a single package or pound, Costco's bulk choices ensure it brings in more respectable earnings for each bacon purchase.

Another real reason Costco's bacon is so cheap is the volume it routinely sells and the opportunity this presents to partners like Hormel. Producers can afford to sell to Costco more cheaply than typical supermarkets because they know the large order sizes help improve their bottom line either way, and involve less stress on the shipping side than many smaller orders. These steady, long-term partnerships are a dream for many brands who participate in white-labeling.

It's also vital to remember that Costco's business model looks to deliver all Kirkland products at 20% less cost than comparable brand names without compromising quality or the store's desired profits. Simply put, Costco likely wouldn't offer bacon at all if it couldn't meet these strict standards, which explains part of how the store chooses its products and develops such dedicated loyalty from customers.

A bacon-filled history for Hormel

While supplying Costco is naturally a considerable account for any business, it's still just a part of the broader Hormel bacon and Hormel Foods family. In addition to Hormel's signature Black Label Bacon and bacon bits (known as "Real Bacon Toppings"), the company also produces a wide variety of cured and deli meats, canned food, and even tamales, sides, and other items.  However, bacon has been one of the company's core products since 1891, when founder George A. Hormel opened his first store in Minnesota. The company helped pioneer commercially available microwave bacon back in 1988, and Hormel even gave away novelty bacon-scented face masks during the height of the COVID-19 pandemic in 2020, with the motto "Don't just eat bacon. Inhale it." 

All of this is to say it's clear that Costco did its homework when picking its bacon partner. Customers continue to give it an A+, even if the specifics of the brand partnership might not be as easily confirmed as they once were.