KANSAS CITY — Amid the stresses and at-home lifestyle of the COVID-19 pandemic, consumers turned to their favorite sweet treats in droves — cookies included.

But most consumers have since returned to their regular day-to-day activities, spending less time at home snacking away on their favorite treats. This, coupled with high inflation, has taken a bite out of the category’s momentum.

“Cookie sales will likely return to traditional slow-volume growth patterns as consumers increasingly shift food consumption back to away-from-home eating, but inflation-fueled higher prices will boost dollar sales at least through 2022,” explained Jennifer Christ, manager, food and beverage research, Packaged Facts.

This is reflected in the cookie category’s recent performance, with unit sales falling 3.8% to 2.8 billion and dollar sales rising 7.7%, to $8.6 billion, according to IRI data for the 52 weeks ending Sept. 4, 2022.

Lower in-stock rates are another reason for declining unit sales, noted Sally Lyons Wyatt, executive vice president and practice leader, IRI.

“Consumers may want to buy them, but they’re not finding them on shelves all the time,” she explained. “The benchmark is a 95% in-stock rate, and cookies were 11 points below at 84% year-to-date through August 2022.”

Certain category segments, however, including assorted multi-packs and perimeter traditional cookies, are driving sales with significant unit and dollar growth.

“The perimeter in general is where you get a lot of traffic, and it’s where consumers can also pick and choose what they want. They don’t necessarily have to get a full package; they can mix and match flavors,” she explained. “This growth shows an opportunity for cookie manufacturers to provide lower-priced, midsize or smaller packages, so consumers can stay in the category yet not have to pay today’s inflated price.”

While cookies weren’t always going to enjoy the unprecedented demand they saw early in the pandemic, recent industry challenges have pushed cookie makers to regain momentum.

A cleaner cookie

One challenge facing the category is growing consumer adoption of diets that are less than friendly toward traditional cookies, Ms. Christ noted, including the keto diet and others that have shoppers avoiding sugar.

To stay relevant with these consumers, brands are introducing cookies packed with a variety of health benefits — to great success.

Reduced-sugar, low-calorie, low-cholesterol and high-protein claims are all increasing in unit and dollar sales, Ms. Lyons Wyatt said. Emerging claims include sodium-free, heart healthy, potassium and made with prebiotics and antioxidants.

“Cookie manufacturers are getting really smart around ‘What are the needs of consumers today?’ ” Ms. Lyons Wyatt said. “ ‘What are those needs, and what can we do with our portfolios that are going to align with that?’ ”

Catalina Crunch, Wilmington, Del., offers 100% plant-based sandwich cookies made with pea protein and prebiotic fiber, providing 3 grams of fiber, 5 grams of net carbs and just 1 gram of sugar per cookie.

“Our cookies are perfect for folks who love sandwich cookies but don’t want all the sugar loaded in a typical sandwich cookie,” said Krishna Kaliannan, founder and CEO of Catalina Crunch. “Better-for-you (BFY) options are lining shelves, whether they are low or no sugar or cater to a different interest. Consumers are demanding it.”

To meet this demand, Park City, Utah-based Kodiak Cakes entered the category earlier this year with its Thin and Crispy cookies. Available in Chocolate Chip Walnut and Oatmeal Raisin, the cookies are made with 100% whole grains and contain 5 grams of protein per serving.

“We really tried to add just the right level of nutrients to feel a little bit better about that cookie while not sacrificing taste at all,” explained Brandon Porras, vice president of marketing for the company.

Adding these nutrients is critical to creating a quality BFY cookie, noted Caroline Ponsi, sales director for Mmmly, New York.

“In our category, you’ll find a lot of ‘free from’ brands: products that are taking out all the bad ingredients,” she said. “But where we create a difference is putting great ingredients that actually have wellness and health benefits back into the product.”

Mmmly’s cookies are vegan, gluten-free, and high in protein and healthy fats that come from its proprietary mix of almond flour, hazelnut meal and tigernut flour, a root vegetable that’s high in prebiotics and good for gut health.

Vegan and gluten-free cookies are especially popular, growing 65% and 68%, respectively, over the past four years, according to Datassential’s 2022 Cookie Inspiration report.

San Francisco-based Renewal Mill’s cookie mixes and ready-to-eat cookies hit both of these marks and are made with upcycled flour, created from the leftover pulp of oat and soy milk production that would otherwise be thrown away.

“We’re trying to unseat those cookies that are full of preservatives and a ton of bad ingredients, but are an indulgent treat,” said Caroline Cotto, co-founder and chief operating officer of Renewal Mill. “If you’re going to reach for a soft-baked packaged cookie, this is something you can feel good about doing.”

Renewal Mill is one of a growing number of environmentally conscious, upcycled cookies. From Q1 2021 to Q1 2022, sales of Upcycled Certified products grew 1,046% in the natural channel, according to the Upcycled Food Association.

Love + Chew, San Francisco, recently launched its Peanut Butter Chip cookie, made with upcycled oat flour, in partnership with Renewal Mill. The cookie is also low in sugar and offers 10 grams of protein from chickpea protein powder.

“I’m very passionate about the environment; that’s the main reason why I’m vegan, so I wanted to incorporate upcycled ingredients,” said founder Lauren Chew.

Simple Mill’s new Sweet Thins cookies are the first in the category made with watermelon seed flour, which helps prevent soil erosion by providing ground cover and allowing growers to diversify their crop rotations, said Katlin Smith, founder and CEO of the Chicago-based company.

“We have always placed an importance on personal health, but last year, we evolved our mission to include planetary health as an equally critical commitment,” Ms. Smith said. “We use coconut sugar to smartly sweeten our Nut Butter Stuffed Sandwich Cookies and Sweet Thins. It’s unrefined, so better for our bodies, and coconut sugar comes from perennial trees, which can help build healthy soil by keeping living roots in the ground year-round.”

Here to indulge

While BFY and environmentally conscious cookies are more popular than ever, taste remains the main predictor in whether consumers will come back for more. This means brands still need to prioritize the flavor and indulgence people expect from a cookie.

Last Crumb, for example, has made premium indulgence the center of its brand. The Los Angeles-based luxury cookie company uses a unique drop model in which cookies are released on a weekly basis to customers on an exclusive list. The cookies, which are handmade using a three-day dough preparation process, include inventive flavors such as The Donkey Kong (banana cream pie), The James Dean (Oreo milkshake), and Netflix and Crunch (Cinnamon Toast Crunch).

“We continue to see demand from consumers looking to treat themselves with elevated experiences, such as Last Crumb,” said Alana Arnold, the company’s co-founder and director of operations.

Just as important as indulgence are flavors that induce a sense of nostalgia with consumers, Ms. Ponsi said.

“Peanut butter that reminds consumers of a Nutter Butter, for example, or a blueberry shortbread that reminds someone of the taste of a decadent blueberry muffin — the more you can provide an image for someone visually, paired with the idea created within your mind when you hear that product, the better,” she said.

Love + Chew has capitalized on the nostalgia trend with its Banana Bread cookie, which Ms. Chew says is the brand’s top seller by far.

And Chicago-based Mondelez International’s Oreo brand has expanded its portfolio with nostalgic and innovative varieties, including Toffee Crunch, Java Chip, Carrot Cake and even a limited-edition Tiramisu flavor.

The brand’s outside-the-box offerings have driven enduring excitement and demand for the iconic cookie, helping make it the eighth-fastest growing food brand globally in 2022, with a 47% increase in brand value, according to Brand Finance Food and Drink.

Unique flavors like these are created to pique consumer interest and can find great success, but they will still often be outshined by classics like chocolate chip, sugar and peanut butter, at least in sales, Ms. Lyons Wyatt pointed out. In fact, more than a third of cookie dollar sales in 2022 came from the top two chocolate flavors: Chocolate Chip and Chocolate, IRI reported.

These traditional fan favorites can still be spiced up, however, and cookie makers are enhancing their staples to win over consumers.

“We try to elevate our flavors in the ways we can,” Ms. Cotto said. “It’s not just a peanut butter cookie we offer, it’s a salted peanut butter cookie, and we think it gives it a little more of that premium-ness.”

The Campbell Soup Co.’s Pepperidge Farm brand, Norwalk, Conn., continues to succeed with its indulgent take on classic offerings, including its European-inspired Chessman Butter cookies and Double Dark Chocolate Milano cookies. Pepperidge Farm is the second most popular center-store cookie brand behind Nabisco in terms of dollar sales, according to IRI.

“Flavor and premium quality, which you can find in all Pepperidge Farm cookies, will continue to be a focus across the cookie category, as well as our business,” said Danielle Brown, vice president of marketing, cookies and crackers, Campbell Snacks. “Keep an eye out for exciting new flavors in our portfolio as we continue to keep up with consumer demand and the flavor trend landscape.”

Other brands are putting an entirely new spin on their iconic cookies. Chicago-based Ferrara’s Keebler brand introduced Fudge Stripe Dip’mmms, pairing dippable marshmallow frosting with mini versions of its classic Keebler Fudge Stripes.

A cookie for every occasion

In addition to plenty of new flavors, brands are maintaining relevancy by introducing more special occasions throughout the day to enjoy cookies.

“Thinking about those occasions across the day, and the different consumer groups across the day, you can mine that to find opportunities for growth,” Ms. Lyons Wyatt said.

Mmmly markets its cookies as an anytime snack that reinvents when it’s OK to enjoy indulgent treats, which many people see strictly as a dessert or reward they have to “earn the right” to eat, Ms. Ponsi said.

“Our mission is to reshape that idea that you need to limit yourself, or you can only have something after you’ve done something else,” she said. “We have developed these products as an anytime snack because we want to change that perspective. They’re something that actually fuels your day and can give you the energy to go for a workout or to sit down and crank out a big project.”

Brands are also broadening cookie occasions by marketing them in different areas of the grocery store. Renewal Mill has found success merchandising their cookies in the deli area, as well as grab-n-go sections, for example.

“It’s like, ‘Oh, you’re picking up a sandwich for lunch and a bag of chips. Throw in a packaged cookie,’ ” Ms. Cotto said. “We definitely emphasize being a midafternoon slump kind of snack, or a pick me-up or on-the-go snack.”

Another opportunity is promoting new flavors and limited-time offerings (LTOs) throughout different times of the year. Oreo has a variety of LTOs centered around holidays and seasons, including Gingerbread, S’Mores, Easter Egg and Neapolitan flavors.

And earlier this year Keebler launched limited-edition Mario Kart Fudge Stripes Rocky Road, capitalizing on the classic combo of gaming and snacking, in addition to new LTO flavors for Valentine’s Day and Easter.

These offerings are just a few of the many ways brands are refreshing the category to keep consumers’ cookie cravings going strong.

“Listening to consumers’ ever evolving needs and desires is key for growth,” said Alicia Mosley, vice president of marketing for Keebler Brands. “It fuels our innovations and inspires us.”

Cookies cross the channels

While unit sales of cookies have fallen year-to-date, the online channel is a different story, with packaged cookie unit sales growing 6% and dollar sales jumping 16%, according to IRI.

This growth reflects the overall emergence of online grocery shopping, with IRI predicting e-commerce will make up at least a third of total grocery industry sales by the end of 2023.

This is a huge opportunity for emerging cookie brands, many of which are already making a name for themselves in the online space.

Luxury cookie brand Last Crumb, for example, uses an online drop model, releasing its cookies to consumers who join the brand’s exclusive list. The direct-to-consumer strategy centered on luxury and exclusivity is working — the brand sells out of its cookies in less than a minute every week.

Last Crumb is also winning in the ever-important world of social media with its daring content, amassing more than 100,000 followers on both TikTok and Instagram. In one of its most viewed TikToks, a Last Crumb ice cream sandwich is rolled in shards of broken glass before viewers are told to “eat glass.”

“We are always looking to create unexpected, buzz-worthy moments for consumers that align with the long-term vision for the brand,” said Alana Arnold, the company’s co-founder and director of operations.

While Last Crumb has grown rapidly with its unique direct-to-consumer (DTC) model, other brands are employing a more varied strategy.

Catalina Crunch, Renewal Mill, Mmmly and Simple Mills are available on online platforms like Fresh Direct, Thrive Market and Amazon, in addition to brick-and-mortar stores and through DTC. These brands have established a presence on Instagram and TikTok as well.

Katlin Smith, founder and CEO of Simple Mills, said it’s critical to meet consumers where they are, which is more online than ever.

“E-commerce has been a big platform over the last few years in terms of where consumers shop as technology not only advances, but one-stop shopping continues to grow,” Ms. Smith said.