Luxury cookies a recipe for success: health-oriented snacks take a back seat as brands look to chocolates to drive sales

DSN Retailing Today, July 25, 2005 by Debbie Howell

With last year's thrust toward healthier snacking alternatives unable to revive the stagnant cookie category, suppliers now appear to be redirecting their efforts to the opposite extreme--indulgence--while still maintaining commitments to wholesome options.

Sales in the $4 billion cookie category were flat during the 52-week period ending June 15, 2005, according to a Merrill Lynch investment report and Information Resources Inc., with segment leader Kraft bucking the trend to produce a gain of 1%. No. 2 cookie maker Kellogg took a hit, with sales down 6% during the period and flat for its last fiscal year.

Although Kraft pointed to innovation in some wellness-oriented cookie categories as driving sales--the successful launches of Nabisco 100-calorie packs and Honey Maid whole grain oatmeal cookies being noteworthy--locus has returned to promotion of more indulgent snacks, particularly of the chocolate variety. Recently launched new items include chocolate-covered Oreos and Double Stuf Oreo with peanut butter, although the company still is hedging its bets with healthier options such as Back To Nature cookies, Snackwell's cookie cakes and South Beach Diet cookies.

The recent entries of Hershey's and Masterfoods USA's Dove chocolate brand into the cookie category are bringing added attention to the chocolate segment. Hershey's cookies featuring the candy brands Hershey's, Reese's, Almond Joy and York launched in December, while six varieties of chocolate-dipped cookies from Dove came out in June.

"It's just another area for us to get into. We're a snack food company," explained spokeswoman Judy Hogarth regarding Hershey's cookie line of 99-cent single-serve and 7-ounce, $2.99 packages.

Dove features cookies positioned in the premium segment, somewhat similar to Pepperidge Farm. This line includes eight or 15 cookies per package at a retail price of $2.99.

"It was a natural progression for the Dove brand itself. The Dove brand is about indulgence and now we can extend our chocolate expertise into other snacking occasions for consumers to enjoy," said Timothy LeBel, vp of sales and strategy for Dove Chocolate.

Not to be outdone by these new competitors, Pepperidge Farm in June launched Whims, bite-sized cookies in varieties such as toffee chip wave, chocolate cashew crunch clusters and white chocolate pecan crunchy clusters. A miniature, on-the-go positioning is a key selling point in the line, which retails for $3.49 in a container that fits in vehicle cupholders.