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Animal Welfare

Animal welfare is part of Costco’s culture and responsibility, calling us to serve as stewards of the animals, land, and environment entrusted to the company. Costco is committed to a global approach to Animal Welfare and is working toward a uniform program in all countries/regions where it operates, while respecting that each country may have its own regulatory and social requirements in place. More information can be found in the examples of Recognized Global Standards.

Mission Statement

Costco Wholesale is committed to the welfare, and proper handling, of all animals that are used in the production of products sold at Costco.

This is a long-standing commitment. Costco pledges its diligence in working with industry and academia in the pursuit of new and improved technologies and methods to further enhance animal well-being.

This is not only the right thing to do; but it also is an important moral and ethical obligation we owe to our members, suppliers, and most of all to the animals we depend on for products sold at Costco.

Costco supports the Five Freedoms of Animal Well Being as guiding principles for its Animal Welfare policies. Originally articulated by a committee of the British government in the 1960s (the Brambell Committee), it has been more recently espoused by Dr. Temple Grandin, a recognized expert on animal welfare. The five freedoms are:
  • Freedom from fear;
  • Freedom from discomfort (right environment, shelter and a place to rest);
  • Freedom from thirst and hunger;
  • Freedom to exhibit natural behavior; and
  • Freedom from pain and suffering.

Collaboration with Experts & Suppliers

In order to stay abreast of new technologies and methods and to try to harmonize various standards from around the world, Costco:
  • Meets with experts from the fields of industry and academia to review, consult, and help implement our programs
  • Participates in activities with organizations such as PAACO, American Humane Association, the National Pork Board, the American Dairy Science Association, the National Chicken Council and the Center for Food Integrity

Animal Welfare Task Force

Costco’s Animal Welfare Task Force is made up of members from fresh meat buying, corporate and regional buying, animal welfare auditing, and global food safety. This past year the Animal Welfare Task Force worked on the following areas:
  • Continuing to identify key global target goals and exploring practical implementation procedures through harmonization with global animal welfare laws and regulations
  • Continuing to benchmark with other industry groups to review best practices
  • Participating on the Coalition for Responsible Antibiotic Use being led by the Center for Food Integrity
  • Reviewing each animal welfare incident involving any Costco supplier. Audits of these facilities are immediately conducted and all supplier corrective actions are reviewed by the Animal Welfare Task Force and actions are taken accordingly

ANTIBIOTICS

Costco Wholesale's goal is to control the use of antibiotics medically important to humans in its meat and poultry supply chains, consistent with protecting the health and welfare of our members and of poultry, hogs and cattle in our supply chains. Our policy is to limit application of these antibiotics to therapeutic use for the prevention, control, and treatment of disease and not, for example, for purposes of growth promotion or feed efficiency, and only under the supervision of a licensed veterinarian in a valid Veterinary Client Patient Relationship.

In 2019, we began working with our suppliers and producers to develop and apply protocols for assessing compliance with this policy, which may include (by way of example):
  • requiring the provision of certificates or affidavits by producers;
  • reviewing audits commissioned by producers and suppliers;
  • reviewing audits commissioned by Costco Wholesale; and
  • testing products.
On or before December 2020, we will:
  • Set a target date by which compliance with the policy will be mandatory and monitored.
  • Assess the feasibility of eliminating the routine use of medically important antibiotics for prevention of disease among supplier farms.
Application of this policy will be guided by our interpretation of Food and Drug Administration Guidance 209 and 213 Veterinary Feed Directive, which discontinues the use of medically important antibiotics for growth promotion and requires veterinary oversight of all medically important antibiotics. Review the September 2019 Update here. As of December 15, 2019, according to Lincoln Premium Poultry none of the birds in the flocks that supply the LPP complex have been treated with antibiotics medically important to humans.

Animal Welfare Audit Program

Costco utilizes recognized audit standards and programs conducted by trained auditors and look at animal welfare both on the farm and at slaughter. The purpose of an audit is to gather current and accurate information concerning the overall welfare of animals.

This information is shared with members of the Costco food safety and technology group and buying staff. The audit results are used to determine what areas, if any, need improvement to meet the animal welfare criteria, for both existing and potential suppliers. The buying staff also uses this information to help make sound purchases for members.

Audits apply to:
  • On‐farm audits. These inspect the welfare of live animals on the farm in their living environment. Currently these are conducted for the following species: chicken (egg‐laying hens); dairy cows; pork; poultry (chicken and turkey); and veal.
  • Slaughter audits. These take place at the plant where animals are slaughtered and processed for these species: beef, pork, poultry (chicken and turkey), and veal.
Audits can be conducted by Costco auditors, suppliers, and/or third parties. Audit type, frequency and intensity can vary across suppliers and species. Costco requires all animal welfare auditors to be certified. This requirement applies to all species and all audits.

Organic certification in certain respects also includes animal welfare components. Costco sells large quantities of organic items derived from animal products, and these items are required to be certified organic in accordance with the law.

Beef

Beef

  • Costco requires animal welfare audits at slaughter in accordance with the American Meat Institute Recommended Animal Handling Guidelines.

Dairy

  • Costco requires animal welfare audits at the farm level. Costco works primarily with third-party audit providers; but continues to work with the Dairy Quality Center to implement second-party dairy audits. The mission of the Center is to establish a third-party veterinarian, outcome-based program that recognizes sustainable practices in place and guides change on the dairy through training, sound protocols, and a valid Veterinary Client Patient Relationship.
  • Costco works with larger cooperative suppliers that utilize the FARM Program to increase the frequency of third‐party verification. The National Dairy FARM Program (Farmers Assuring Responsible Management) seeks to provide consistency and uniformity to best practices in animal care and quality assurance in the dairy industry.
  • Costco does not support tail docking and has actively sought to use suppliers who do not allow this practice. Current suppliers do not practice tail docking.
  • Costco requires its suppliers to implement standards regarding age and pain management as it relates to dehorning practices.
  • Costco strongly supports advances in dairy farming practices to include the use of genetic breeding programs to promote polled cattle (naturally hornless). Costco believes this will benefit the welfare of the cows and of the farmers who care for them by eliminating the need for dehorning. Costco recognizes that through the years its suppliers have embraced new ways to improve the welfare of the animals in their care. Costco expects suppliers to continue to seek improvements that promote good animal health and well‐being.

Veal

  • Costco has a specific veal policy to promote calf welfare.
  • All Costco veal is completely traceable to the farm level and all farms are 100% inspected for compliance to the requirements.
Cage-Free Eggs

Cage-Free Eggs

Costco is committed to procuring cage‐free eggs and continues to increase the percentage of cage-free eggs its sells worldwide, as indicated below:

Cage-Free Eggs
FY France, Iceland, Mexico, Spain & United Kingdom United States Australia Canada South
Korea		 Japan China &
Taiwan
2018 (Unreported) 89% (Unreported) (Unreported) (Unreported) (Unreported) (Unreported)
2019 100% 94%* 74.2%* 22%* 9.3%* 1%* In Process*

*In process and our progress is dependent upon local available infrastructure and appropriate food safety practices

In addition, Kirkland Signature™ Liquid Eggs are 100% cage-free. The transition to cage-free eggs will continue to increase with added availability and capacity of cage-free production.

Poultry

  • Costco requires animal welfare audits at slaughter in accordance with the National Chicken Council (NCC) Recommended Animal Handling Guidelines.
  • Costco also audits hatchery and grow‐out facilities.
  • Costco implements animal welfare audits for laying hens.
    • Audits can include American Humane, Certified Humane and UEP Audits.
    • Audits now extend in varying degrees to conventional cage, cage‐free and organic housing systems.
  • Costco has introduced the Costco Hen House Audit in the U.S. This audit tool promotes a sense of responsibility and accountability to the supplier, and provides a means for annual barn evaluations.
    • Suppliers are required to audit each house twice a year using the Costco Hen House app platform. The results are automatically transmitted to Costco upon completion.
    • The app-based system gives pictorial examples for how to score each question when needed.
    • The app also requires the supplier to submit photo documentation for each question along with the answer when applicable.

OUR VERTICALLY INTEGRATED POULTRY FACILITY

In 2019, Costco began selling chicken produced in our new, vertically integrated facility located in Fremont, Nebraska, which is described in more detail in our Kirkland Signature™ pages. Animal welfare is a critical component that has been integrated into all aspects of the chicken supply chain, from the hatchery to the grower barns to the processing facility.

The design of the buildings, equipment and corresponding programs to handle the chickens had animal welfare as a key component and includes the following:
  • The latest technology for poultry processing has been incorporated into the hatchery, feed mill and processing facility.
  • The farmer-owned barns for the pullet, breeder and broiler chickens are state-of-the-art in design and equipment.

The animal handling processes also incorporate strict animal welfare programs and a summary of some of these policies include the following:
  • Stocking density is limited to allow birds more space
  • All barns have tunnel ventilation to improve bird air quality
  • Apollo Gen 2 automatic harvesters are used to more humanely collect our broilers
  • Broiler transport includes trailer curtains to keep animals sheltered
  • Broilers are unloaded inside a lairage area, to protect them from the weather
  • Lairage area can hold a 3-hour inventory to allow birds to rest
  • State-of-the-art 5 stage Controlled Atmosphere Stunning (CAS) system
Down and Feathers

Down & Feathers

Costco has committed to responsible down sourcing. Costco now requires a certification to be present with all Costco production of down and feather products. Costco accepts certifications from IDFL (International Down and Feather Lab), Downpass or RDS (Responsible Down Standard).

Compliance to these standards ensures ethical sourcing of down and feathers through the verification of supplier traceability systems, general animal welfare, risk assessment and other important best practices.

Pork

Pork

  • Costco implements the Pork Quality Assurance Plus program. This is a producer‐driven program that farmers can use to ensure that pork products are of the highest quality, are safe, and animals are cared for in a way that ensures their well‐being.
  • Costco has a Gestation Crate Policy that asks suppliers to phase out gestation crates for pregnant sows in favor of group housing. The goal is a complete transition by 2022. Approximately 80% of Costco’s U.S. suppliers have completed this process, and many more will finish ahead of this target date.
Risk Factors
*Costco also recognizes that the subject of animal welfare is significant for a number of its members and investors. See below for full text
*In addition to focusing on animal welfare because it is the right thing to do, Costco believes failure to do so would create risks for the business and its shareholders. Costco and businesses like Costco face risks relating to animal welfare in the supply chain. To address these risks, Costco has adopted measures to mitigate animal abuse problems and believe these are being dealt with appropriately. Nevertheless, issues will arise and Costco is committed to correcting problems it learns of. A significant percentage of Costco sales is from food, including food and sundries, fresh foods, service delis, and food courts. Key components of these categories are animal proteins, notably beef, chicken and eggs, pork, and lamb. The failure to provide adequately for the welfare of animals throughout Costco’s supply chain could have significant adverse effects on the business and operations of the company and its investors. These effects could occur whether the abuse was to occur under the auspices of Costco’s supplier of record or other points upstream in the supply chain. These abuses could take a variety of forms, including (without limitation) cruelty or mistreatment by employees, inhumane conditions of confinement, inappropriate use of animal controls or medications or antibiotics, and inadequate feed or water. Prevention of abuse can require extensive, complicated, and expensive controls and procedures. For example, in the context of poultry, standards can require, among other things, extensive animal rights training, regular extensive animal rights audits; alarm systems and generators in the hatcheries; sanitation procedures in the hatchery; temperature monitoring, housing, and ventilation standards; chick injury reporting, feed, and drinking programs; veterinary care; minimum cage space; and proper handling procedures in the plant. Different species have varying requirements to assure animal welfare. Controls and procedures designed to assure or improve animal welfare can lead to increased costs and lower supply or untimely supply of merchandise. It is possible that animal abuse could result in suppliers selling Costco items derived from those animals that are unsafe or otherwise unsuitable for consumption by members or their pets. Although Costco employs food safety testing systems designed to prevent the sale of such items, it cannot guarantee that those systems will always be effective. Selling unsafe products could result in illness or injury to members and their pets, harm Costco’s reputation, and subject the company to litigation. If food and prepared food products for human and animal consumption do not meet or are perceived not to meet applicable safety standards or members' expectations regarding safety, Costco could experience lost sales, increased costs, and be exposed to legal and reputational risks. Costco suppliers are generally contractually required to comply with applicable product safety laws, and Costco is dependent on them to ensure that the products Costco buys complies with all safety standards. While Costco is subject to governmental inspection and regulations and works to comply with applicable laws and regulations, it cannot be sure that consumption or use of products will not cause a health-related illness or injury or that Costco will not be subject to claims, lawsuits, or government investigations relating to such matters resulting in costly product recalls and other liabilities that could adversely affect the business and results of operations. Even if a product liability claim is unsuccessful or is not fully pursued, the negative publicity surrounding any assertion that Costco products caused illness or injury could adversely affect its reputation with existing and potential members and the corporate and brand image, and these effects could be long term. Costco suppliers (and those they depend upon for materials and services) are subject to risks should they not assure animal welfare that could limit their ability to timely provide Costco with acceptable merchandise. For these or other reasons, one or more Costco suppliers might not adhere to its quality control, legal or regulatory standards. These deficiencies may delay or preclude delivery of merchandise to Costco and might not be identified before Costco sells such merchandise to members. This failure could lead to litigation and recalls, which could damage Costco’s reputation and brands, increase costs, and otherwise adversely impact business. Costco and some of its suppliers and sub suppliers face pressure from animal rights groups to require conformity with standards developed or advocated by these groups. Failure to make the changes sought by these groups, whether or not Costco believes the changes to be desirable for animals or business, creates risk that Costco will be subject to pressures from these groups, including public campaigns that seek to damage the company in the eyes of members, investors, and the general public. These campaigns could cause Costco to incur higher costs to provide appropriate responses and also could divert management resources, to the detriment of the business. These groups may be able to coordinate their actions with other groups, threaten boycotts or enlist the support of well-known persons or organizations in order to seek to increase pressure to achieve their stated aims. Changing procedures and infrastructure to, in certain cases, conform to these guidelines or seeking to cause or suppliers and/or sub suppliers to change procedures and infrastructures can result in additional costs for Costco suppliers and the costs of items that Costco purchases. Campaigns and publicity concerning animal abuse, whether in the company’s supply chain or elsewhere, also could lead to legal and regulatory changes that impose more stringent requirements concerning animal welfare, which could have the effect of reducing available supply and raising prices, increasing costs for Costco. While Costco may pass some of the increased costs on to members, there is no assurance that Costco can do so and profitability could suffer accordingly. Individuals or organizations can use social media platforms to publicize inappropriate or inaccurate stories or perceptions about the food production industry or Costco. Such practices could cause damage to the reputations of Costco or the food production industry in general. Animal welfare abuses in our supply chain could lead to individuals choosing not to become Costco members and to current members canceling their membership or purchasing less merchandise, adversely affecting revenue. All of the factors above arising out of the failure to assure animal welfare in the supply chain, singly or potentially in combination, could adversely affect Costco’s business, financial condition and results of operation.
Last Updated: December 2019