Indulgence in, inexpensive alternatives out
September 6, 2011
by Eric Schroeder
A year ago in this publication’s update on cookies, private label garnered attention as a key driver in the category. Year-over-year dollar sales in the 52 weeks ended Aug. 8, 2010, were up 8% for private label cookies, while unit sales rose nearly 10%, according to SymphonyIRI Group, a Chicago-based market research firm.
Fast forward to August 2011 and a different picture has emerged in the segment. Private label cookie dollar sales were up only 0.16% in the 52 weeks ended Aug. 7, 2011, while unit sales fell nearly 2%, according to SymphonyIRI. The lower growth numbers have come even as the overall cookie category appears to be back on solid footing.
In the 52 weeks ended Aug. 7, dollar sales in the cookie category rose 1.8% to $4,685,054,000, while unit sales increased 2.1% to 2,200,020,000, according to SymphonyIRI. Leading the way was Kraft Foods Inc., Northfield, Ill., which through its Nabisco brand was able to grow dollar and unit sales 4% and 7%, respectively, in the period.
Kraft’s Oreo brand over the past year was able to overtake the company’s Chips Ahoy! as the top selling cookie brand, according to SymphonyIRI. Dollar sales of Oreo jumped 8% on an 11% gain in unit sales, while Chips Ahoy! dollar and unit sales rose 3% and 10%, respectively.
In mid-August, Kraft announced the nationwide launch of the Triple Double Oreo. The cookie has a layer of vanilla creme, a layer of chocolate creme and three chocolate wafers.
“Our fans’ passion and enthusiasm has challenged us to raise our game,” said Jessica Robinson, associate director of consumer engagement for Kraft Foods. “With the Triple Double Oreo cookie, we set out to take Oreo to another level by adding a new twist. We are looking forward to engaging with Oreo fans as they share their twisting, licking and dunking moments with the new Triple Double Oreo cookie.”
It won’t be the first time Kraft has taken Oreo to a “third level.” In 2006, the company introduced Triple Stuf Oreos in certain cities for a one month promotional trial before permanently discontinuing the product. Triple Stuf Oreos had three times the normal amount of white cream filling, making it slightly different from the most recent launch of Triple Double Oreo.
The second-largest branded cookie company, Keebler Co., a division of Battle Creek, Mich.-based Kellogg Co., also performed well dur-ing the past year. Although the company’s top-selling Keebler Chips Deluxe cookies sustained a 13% drop in dollar sales and 15% dip in unit sales during the 52 weeks ended Aug. 7, the company’s overall cookie dollar and unit sales rose 2% and 3%, respectively, behind several initiatives and indulgent innovation.
“We successfully launched the Keebler Master brand initiative (during the second quarter), which aligns cookie pricing, packaging and scale behind the Keebler brand,” John Bryant, president and chief executive officer of Kellogg, said during a July 28 conference call with analysts. “The shift caused a reduction in activity during the second quarter, which impacted our merchandising results. However, our base sales were strong and outpaced category-based sales growth.
“Keebler Fudge Shoppe continued to perform well, and we had strong innovation with Coconut Dreams, Jumbo Fudge Sticks and Mint Crème Middles.”
With its expansive line of decadent cookies, Norwalk, Conn.-based Pepperidge Farm, Inc., struggled through a difficult few years as consumers turned to private label products. But over the past year, the company is on the rebound as dollar sales gained 3% to nearly $300 million on a 3% increase in unit sales.
Dollar sales of Pepperidge Farm Milano cookies climbed 1% to $95,176,540 in the 52 weeks ended Aug. 7, according to SymphonyIRI.
Pepperidge earlier this year added another indulgent cookie to the line that it hopes will fuel more growth.
Milano Melts, introduced in early May, feature a crisp cookie filled with chocolate crème. The cookies are available in two varieties: Dark Classic Crème and Chocolate Dark Classic Crème.
“One insight we’ve gained is that creamy fillings provide a highly appealing alternative to both traditional and new Milano consumers,” said Pat Callaghan, president of Pepperidge Farm, in a July 12 conference call with analysts. “Another simple insight is that if you keep your Milano wafers separate and use them for an open-faced treat, there is almost an endless potential for delicious topping combinations. Plus, we have developed the technology in our plants to provide both of those delicious variations.
“The Milano Melts and Milano Slices are the two recent offerings of these compelling insights. Milano Melts was launched last February, and has already proved to be a hugely popular and incremental addition to the brand. And the Milano Slices concept was actually developed by a team of employees at one of our employee innovation fairs and is shipping in October after a successful test in the last holiday season.”