Many cookie sales come from "cookie monsters," the 15% of people who eat 65% of the cookies sold.
2005 was a very good year for fresh-baked cookies and the bakers who sell them. In Modern Baking’s biennial 2005 Retail Bakery Survey, cookies posted the largest sales gains of all bakery categories, 12 percent of total sales, up from 9 percent in 2003. Cincinnati-based Busken Bakery is a perfect example of the popularity of cookies. “[Our] cookie sales are up 10 to 15 percent just this last year. That’s for all of our cookie types. Cookies are our highest volume product, and they have the highest profit margin as well,” says Dan Busken, vice president, manufacturing and distribution of Busken Bakery.

On the flip side, I.R.I., a grocery sales tracking firm, is reporting that grocery aisle cookie sales, that is, the bagged cookies sold on the grocery shelf (not the in-store baked products) are on the decline. For the 52-week period ending November 27, 2005, cookie dollar sales were down 1.6 percent versus the same period last year, and cookie unit sales were down 3.1 percent.

According to the bakers polled for this story, the popularity of retail bakery cookies is being driven by customers’ preference for freshness, plus the perception that bakery cookies are wholesome snacks that are fun and exciting in ways that grocery shelf cookies can never be.

Cookie monsters
Page Busken, C.E.O. of Busken Bakery, believes that one factor in the popularity of cookies is “cookie monsters.”

“I remember reading a study that said 15 percent of the people who eat cookies eat 65 percent of the cookies made. There are just people who eat lots of cookies,” he says. He believes that the driving forces for “cookie monsters” are freshness, uniqueness and variety. “The perception is that if the cookies are from a retail bakery, they’re fresher,” he adds.

Other bakers agree. According to Jim Milano, co-owner, with wife, Nilda, of Nilda’s Desserts in Poughkeepsie, N.Y., cookies are an “easy” comfort food. “The price point isn’t bad. It’s not like you have to buy a whole pie for $6 to $8 to get a slice out of it. And it’s a comfort food that has no [seasonal] boundaries, unlike ice cream. It’s winter here in Poughkeepsie. Nobody’s going to go out and get a sundae today. [But] cookies sell twelve months a year.”

In business since 1989, Nilda’s Desserts currently sells a million cookie SKUs a year, through foodservice, counter sales, convenience stores and gas stations, proving that cookies are definitely a comfort food.

Operators say customers perceive oatmeal cookies as wholesome treats.
Milano believes customers find a reassuring wholesomeness to cookies, especially Nilda’s best-selling oatmeal cookie variations, that overrides more traditional nutritional considerations. “I think we make a very wholesome cookie, not a good-for-you cookie. Our first ingredient, if we put our sugars together, would probably be sugar,” he says. “[But consumers are saying,] ‘If you’re going to eat a cookie, you might as well eat an oatmeal cookie.’ A lot of people tell us they eat our oatmeal cookies for breakfast, and they refer to it as ‘something wholesome in the morning.’”

Size matters
While some may think of cookies as “something wholesome”, they don’t necessarily want something bigger. Page Busken has found that smaller cookies are considered a smaller nutritional sin, which makes them a bigger seller. “Cookies are small enough that you don’t feel bad about eating more of them. We’ve learned this by making different sizes of our most popular cookie, which is an iced cookie. Right now it’s an iced Christmas tree. We sell tubs of mini-trees,” he says. “People eat the minis because they feel better about eating six to eight of those instead of the big ones. And we sell more of the smaller ones now than the big ones.”

Consumers also want a good quality cookie without a lot of chemicals, says Scott Blackwell, president/C.E.O. and founder of the Immaculate Baking Company in Flat Rock, N.C. “Cookies are, at the end of the day, a snack. I think that the market in general has grown with more healthy alternatives. And I think that people are becoming more aware and more scared of unknown ingredients and chemicals. And because of that, your trans-fat loaded, what-used-to-be-a-popular-cookie isn’t looking so healthy anymore,” Blackwell says.

That, he adds, is what probably hurts the grocery aisle cookies. “Let’s face it, if you’ve read a label lately, you’ve found 50 ingredients and you recognize only two of them: flour and sugar. And you wonder why those other ingredients are in there?”

Another factor is that grocery aisle packaged cookies don’t have the same eye appeal and freshness factor of bakery-fresh cookies, Blackwell adds. For irresistible, unmatched eye appeal, Immaculate Baking has American folk artists create unique works as labels for each type of cookie. That attention to freshness and packaging is working. Blackwell reports that his wholesale cookie bakery has grown 35 percent in the last year.


Immaculate Baking Co. reports a 35% increase in sales of its cookies, here being deposited through a wire-cut machine.
Another kind of fresh
Freshness means more than time spent out on the shelf. Attention to the way cookies are packaged, decorated and displayed gives bakeries an unbeatable edge over their grocery aisle competition.

Ten years ago, Mark Atwood, owner of Atwood’s Bakery in Alexandria, La., had an a-ha! moment. “Somebody walked in and looked at my showcase,” Atwood says. “I was buying the shaped design cookies from [a finished cookie supplier] then, and she said, ‘Huh. That looks exactly like the ones they have over at Wal-Mart.’”

So, he bought an imprinting machine and developed his own unique cookie imprints and designs. Now, no one has cookies like his, especially grocery stores, and Atwood frequently changes his packaging and product combinations. For example, this past holiday season he was extremely successful with combination cookie/chocolate candy trays featuring three dozen Christmas cookies and 1 lb. of assorted candies or five dozen cookies and 2 lbs. of candy. Cookies represent 15 percent of total sales, Atwood states, and sell for $4.94 a dozen up to $35.75 a dozen.

To keep things fresh, Atwood also attends trade shows to find unique packaging, such as a three-part Santa box that the bakery fills with cookies, chocolates and salted nuts. He also found ornate, high-end cookie jars ($42 each at wholesale) that he fills with 2 1/2-in. tall gingerbread men and gift wraps.

“You’re not just getting a $4 purchase of gingerbread, you’re selling them three dozen cookies, plus you’re making a little on the jars. And then, hopefully, they’ll come back to refill the jars through the year,” Atwood says.

Another important factor to Atwood’s success with cookies is his ability to keep introducing new varieties. “We do a lot of R&D. Through the year, we pick up formulas. And then in the summertime, when it’s slow, we test bake a lot of new formulas,” he says. Traditionally, the bakery rotates about 15 percent of its cookie varieties every year.

Flexible cookies
Retail, specialty wholesale and in-store bakers have another advantage over their grocery aisle counterparts, which is the ability to tailor cookies to current trends. “You can tailor a cookie to the latest trend, whether it’s a two-week trend or a two-month trend, and you can produce them overnight with very little start-up involved,” says Dan Busken.

Page Busken concurs. “With our Cincinnati Bengals football team winning for the first time in 15 years, we’ve reintroduced a cookie we sold the heck out of 15 years ago. It’s a cookie with Bengal stripes on them, orange with black stripes. We know that’s going to fly out of here as we get closer to the playoffs. The retailer can do that. Whereas, the wholesale guy, by the time he gets approval to manufacture it, it’s all over.”