Costco’s New Packaging Requirements and the Impact to Brands

Costco, a retail behemoth, wields significant power in the business world. With over 124.7 million members worldwide and $237.7 billion in annual sales, Costco’s impact reaches far beyond its warehouses. For brands who sell in this influential channel, aligning retail displays and product boxes with Costco’s current packaging requirements is more than just a business move—it’s a strategic necessity that can significantly affect your ability to have product on display in the store.

This article will inform you what’s new in Costco’s 2023 packaging guidelines, their latest commitment to sustainability, and how The BoxMaker can help you meet the new requirements for all your Costco projects.

An Overview: General Updates

Display-Ready Packaging

Costco aims to reduce costs by minimizing extra packaging, handling, and corrugated waste whenever feasible so they can continually provide their members with goods at the lowest possible prices. To reflect this goal, they are stating that all packaging must be display-ready, with minimal to no handling required.

For example, this affects the package design for Costco’s display trays. Stacking tabs are no longer allowed outside of the produce section and must not exceed 0.75’’ in height, and a minimum of two-ply tabs is required. Furthermore, tear-away front panels, tray covers, and blocking dividers are no longer allowed.

Package Performance Requirements

The packaging's appearance is not the only consideration; its performance in various environments is equally emphasized. Costco's updated requirements specify that packaging must be engineered to withstand different conditions, such as:

• Enduring long-haul transfers covering distances of up to 500 miles without sustaining damage.
• Surviving in high-humidity conditions ranging from 80% to 90%.
• Allowing for a minimum storage period of 4 weeks.

Furthermore, Moisture Resistant Adhesive (MRA) is a mandatory requirement for all refrigerated products and is also recommended for non-refrigerated products. As for e-commerce, the packaging must be structurally robust because the goods will be stacked upon themselves and be stored for up to one year to support online orders.

Performance Testing is Strongly Recommended

While performance testing isn't mandatory, Costco strongly recommends it so that your packaging can withstand the challenges of transit, delivery, and storage within Costco's network.

Organizations like the International Safe Transit Association (ISTA) provide great solutions as they offer pre-shipment test procedures, indicating the likelihood of a product reaching its destination safely.

Although ISTA testing helps predict packaging suitability for the supply chain, it doesn't guarantee damage-free shipments. To fully ensure your packaging can withstand their supply chain handling process, Costco recommends suppliers work with a dedicated packaging engineer of their choice.

Costco’s Sustainability Initiatives

Costco is ramping up their sustainability efforts for 2023 and beyond. For paper-based packaging materials, suppliers should use responsibly sourced paper fibers, such as certified paperboard and recycled content. Costco has a strong preference for Forest Stewardship Council (FSC) certification, but also accepts Sustainable Forestry Initiative (SFI) and Programme for the Endorsement of Forest Certification (PEFC).

In terms of plastic, all packaging materials should be recyclable, certified compostable, or biodegradable where the product is sold. Costco encourages all supplier to optimize recycled content. 

Read our guide to learn how to get started with sustainable packaging.

Your Costco Packaging Experts

Navigating Costco’s detailed packaging requirements demands expertise and experience. At The BoxMaker, the members of our award-winning Structural Design team serve as your dedicated Costco packaging experts, ready to support all your packaging needs for Costco projects. If you’re interested in the details, you can access the original document outlining Costco’s updated packaging requirements here.

When you’re ready, our Packaging Advisors are here to help and ensure that your packaging meets Costco’s standards. Contact our team to get started today.