Bend’s iconic Deschutes Brewery has struck a deal with Costco to sell its Helles-style lager under the Kirkland label on a year-round basis.

It’s good news for the brewery as guarantees sales to the big-box chain for the duration of the contract. Unlike other Kirkland products, the brewery’s name is also included on the labels.

Costco will also carry a Deschutes Brewery single-release vintage imperial stout under the co-branded Kirkland/Deschutes label.

Overall beer sales were down in the United States in 2023, and craft beer sales represented about 13% of the market, according to the trade group The Brewers Association. It’s a competitive market as craft beer competes with cocktails, mocktails and cannabis infused beverages.

“It’s a competitive market out there for craft producers and breweries are adapting by looking for growth in new ways from seeking new partners or re-considering their distribution strategy,” said Bart Watson, Brewers Association economist.

The brewing industry employs about 7,626 people in Oregon. There are 318 breweries in Oregon, according to the Brewers Association.

The Costco partnership is a big deal for Deschutes Brewery, which only this year began distribution in all 50 states, said Peter Skrbek, Deschutes Brewery CEO.

Deschutes Brewery went through a thorough vetting process, said Skrbek. While Skrbek couldn’t say how much the big-box chain purchased of the Helles-style beer and the single-release vintage beer, the brews are coming off the bottling line at the Bend brewery and being distributed to all 50 states.

“This is a really cool thing and it’s a big deal,” Skrbek said. “It’s something we’ve worked on for a long time. The single release product we talked with them about what could be possible.

“They had a super idea, a Kirkland lager. They are such a wonderful team to work with.”

Costco declined to comment for this story.

The Helles-style beer recipe is the brainchild of Robin Johnson, a brewer with Deschutes for a number of years. The German-style beer often is pale in color but full in body. The brewery earned a gold medal for the beer at the annual Great American Beer Festival in 2023. The beer will be available on Costco store shelves year round, provided the consumers buy it, Skrbek said.

Bend-based brewers adapt to consumer trends

Bend-based brewers adapt to consumer trends

Costco is selling a 12-pack of the Helles-style beer for $13.99, he said.

Deschutes Brewery invests in craft beer trend with non alcoholic IPA Fresh Squeezed

Deschutes Brewery invests in craft beer trend with non alcoholic IPA Fresh Squeezed

The vintage Kentucky bourbon-barrel aged imperial stout was designed to be a holiday offering, Skrbek said.

“This is the first time Costco has cobranded with a brewery and showing who produced it,” he said. “It’s really cool.”

Deschutes Brewery is among the oldest in Bend’s brewing community and has been brewing since founded in 1988 by Gary Fish. The brewery produces about 225,000 barrels of beer every year, according to its website.

“It’s a good win,” said Don Myll, Economic Development for Central Oregon Bend area director. “ It shows to me how Deschutes Brewery can increase their volume but still maintain its brand.”