SAN LEANDRO, CALIF. — It was nearly 40 years ago that Ken Rawlings smelled fresh baked cookies in a Fox Hills mall in Los Angeles and decided that a chain of cookie shops would be a good idea. With his 12-year-old daughter’s help — she coined the name “Otis Spunkmeyer” — Mr. Rawlings quickly found out that it was more than just a “good” idea, opening up cookie shops under the Otis Spunkmeyer name across California.
By 1983, Mr. Rawlings had opened 20 Otis Spunkmeyer stores in California, but amidst industry change, he made the switch from retail to manufacturing and distributing frozen cookie dough to food service accounts. Otis Spunkmeyer started distributing its frozen cookie dough by opening small depots or “sales centers” all across the United States. Otis Spunkmeyer trucks operated from each sales center to service local customers directly. By the end of the 1980s, Otis Spunkmeyer had 40,000 accounts across the country. Otis Spunkmeyer has been the sole supplier of cookie dough to Subway restaurants for many years and also includes Burger King among its accounts.
The brand grew into the No. 1 selling food service cookie dough in the United States and the No. 1 selling cookie dough in fundraising. By 1990, the company was offering retail frozen cookie dough sold in grocery stores. John Schiavo, chief executive officer of Otis Spunkmeyer, joined with private equity firm Code Hennessy & Simmons in a management buyout of Otis Spunkmeyer in 2002, and in 2006, Otis Spunkmeyer was sold to IAWS Group P.L.C. for $561 million. IAWS subsequently was merged with Hiestand to form Aryzta in 2008. Two years later, in 2010, Otis Spunkmeyer and Fresh Start Bakeries (FSB) combined FSB’s Pennant Foods and Sweet Life business units with Otis Spunkmeyer. Now, Aryzta is hoping to make yet another bold move for Otis Spunkmeyer as the brand looks to again take on the retail market in a broad expansion effort.
“While Otis Spunkmeyer has focused on food service operations for the past 35 years, our company actually originated as a chain of retail cookie stores in California,” said Kristina Dermody, brand president, Aryzta. “We are thrilled to be the No. 1 selling food service cookie dough in America, and given this positive reaction to our baked goods and cookies, we have been waiting for the optimal opportunity to expand our business back into the retail space. We have the capability and decided now was our time to have our sweet baked goods in grocery, club and convenience stores across the country for everyone to enjoy.”
The launch of Otis Spunkmeyer products will be expansive, Ms. Dermody said, and will include “everywhere food is sold,” including grocery, club and convenience stores across the country.
The new retail line will begin hitting shelves in early 2016 and will go beyond the cookies and muffins the company long has been known for.
“We pride ourselves on making food — cookies, cakes — sweets of all kinds vs. referring to our line as products,” Ms. Dermody said. “That said, we have something for everyone. While we are best known for our delicious cookies, the new line for retail will offer 20 foods that include loaf cakes, snack cakes, muffins, cookies, cupcakes, Danish, cinnamon rolls, brownies and donuts. With distribution in grocery and club stores especially, we are looking to appeal to loyal Otis Spunkmeyer fans who have grown up with our beloved food along with a new generation of food lovers.
|Kristina Dermody, brand president, Aryzta|
“We are using classic flavors in our food, which keeps the nostalgia of our brand, while also allowing us to give the snack food shopper exactly what they are looking for from their favorite treats. With that, we know shoppers are savvier than ever, which is why we knew we had to develop a food line that was truly different and appealed to all consumer’s health and wellness needs. The Otis Spunkmeyer grocery line is guaranteed to have ‘No Funky Stuff.’ That means our delicious food is made without artificial flavors or colors, high-fructose corn syrup or partially hydrogenated oils. Our commitment to ‘No Funky Stuff’ ensures that the Otis Spunkmeyer line of sweets is delivering on a superior tasting treat that people love.”
The new Otis Spunkmeyer baked foods will range from $3.99 to $6.99, she said.
Ms. Dermody said Aryzta did not need to add capacity to handle the move into retail.
“We have the capabilities and felt now was the right time to expand into the retail channel,” she said.
As to whether the decision to get back into retail will change the company’s approach to the food service market, Ms. Dermody responded, “Many people know Otis Spunkmeyer, and we are certainly known for the great taste. What they haven’t known is where to buy Otis Spunkmeyer, so we are really excited to re-launch to consumers at retailers. With our new path, we have worked tirelessly to develop a line of sweets consumers know and love.”
To help get the Otis Spunkmeyer name back out into the retail market, Aryzta has hired ad agency Nail Communications. The campaign will build off Otis Spunkmeyer’s famous heritage of renowned and tasty warm cookies and will include television, print, outdoor, social and digital.“It’s always wonderful to get the opportunity to reintroduce an iconic brand like Otis Spunkmeyer to America,” said Jeremy Crisp, managing partner, Nail Communications. “We’re looking forward to seeing the campaign come to life across the country later this year.”