Costco has become synonymous with "buy in bulk." If you're looking to buy a large quantity of something on the cheap, it's hard to beat this mega-store's prices. What may surprise you, though, is that Costco isn't just selling three-ton packs of paper towels and ninety-pound tubs of butter. They're also one of the largest suppliers of organic foods in the United States.
The trouble, it seems, is that they were having trouble keeping up with the organics demand. According to The Hearty Soul, Costco CEO Craig Jelinek told investors that they weren't able to "get enough organics to stay in business day in and day out."
The solution? They've decided to "buy" farmland in order to meet demand and continue supporting the organic movement.
To start this process, Costco loaned money to organic farmers. The farmers used this money to buy 1,200 acres of land in Mexico (specifically, Baja California) and farming equipment.
Loaning money to farmers is a move that's been done on other occasions, but the added wrinkle of organic consciousness is one that's both relatively unexplored and incredibly exciting.
"The reason retailers encouraging suppliers to go organic is so rare in the food industry is because it can take many years and lots of money to transition from conventional to organic farming. Land that is needed to grow organic food is scarce and usually very expensive, making Costco's initiative even more impressive," says The Hearty Soul.
On that note, just because there's an increase in demand doesn't mean that there's enough viable land to support that demand. When supply can't meet demand, businesses start losing support and traction (even though consumers' appetites continue to steadily increase). In order to keep themselves afloat, Costco's been making a short, but impressive list of environmentally conscious moves.
One of those moves has to do with organic beef. According to The Seattle Times, "in the last year, Costco bought cattle and is contracting with owners of organic fields in Nebraska to have ranchers there raise the livestock to ensure supply for its organic ground-beef program."
While loaning money to farmers and securing organically raised cattle are great starts, it will be interesting to see if Costco can keep this trend up.
With land supply dwindling, only time will tell if other companies will be able to follow in this store's organic footsteps.