Milling & Baking News - September 2, 2014 - 25

Cookies Update



Getting creative drive growth cookies
with
New flavors, different eating occasions help

uccessful flavor innovations are
helping prop up the U.S. cookies
category. In the 52 weeks ended July
13, dollar sales of the U.S. cookies category totaled $7,688,924,160, up 1.75% from
the same period a year ago, according to
Information Resources, Inc., a Chicagobased market research firm. Unit sales
also were stronger, advancing 1.9% to
3,419,763,968.
Mondelez International, East Hanover,
N.J., is far and away the category leader,
with sales of more than $3 billion. Yearover-year dollar sales were up 7% in the
52 weeks ended July 13 on an 8% increase
in unit sales, according to I.R.I. Mondelez
benefited from continued strength in its
Oreo and Chips Ahoy! brands, where
dollar sales increased 11% and 10%, respectively, during the period.
To help support its priority cookie and
cracker brands and product platforms,
Mondelez earlier this year said it would
invest more than $130 million in new biscuit manufacturing technology and capabilities in its U.S. network. The investment will focus on bakeries in
Fair Lawn, N.J., and Richmond,
Va. Consolidating its U.S. biscuit manufacturing footprint
on the East coast will result in
the closing of the Philadelphia
bakery in 2015.
Mondelez also continues to
see strong demand for its belVita brand. The company expanded the belVita brand with
the launch of soft baked breakfast biscuits last fall, and the introduction has belVita on the fast
track to becoming a $200 million brand.
In the 52 weeks ended July 13, dollar sales
of belVita cookies totaled $183,741,488,
up 95% from the same period a year ago,
according to I.R.I.
Growth in biscuits, driven by new belVita Soft Baked breakfast biscuits and
Reese's Peanut Butter Cup Oreo cookies, contributed to 2.7% growth in North
America at Mondelez in the second quarter ended June 30.
Pepperidge plays vital role
While Pepperidge Farm Inc.'s 4.8%
share of the cookies market pales in
comparison to Mondelez's 40% share,
the Norwalk, Conn.-based subsidiary
of Campbell Soup Co. is an important
player, particularly for its ability to be
a trend setter.
"Our cookies have continued to grow,
bakingbusiness.com / world-grain.com

the brand's target consumers, women
ages 25 to 44, need a "Milano moment,"
a few minutes just for themselves. The
company plans to feature the advertising campaign again in fiscal 2015 on digital television platforms. This fall, Pepperidge will launch its first fall Milano
flavor: pumpkin spice.

driven by smart, relevant marketing, successful flavor innovation and focused execution in merchandising," Irene Chang
Britt, president of Pepperidge Farm, said
during Campbell's July 21 investor day
conference. "In addition, the introduction
of our Dessert Shop range of large, soft
cookies has attracted new consumers to the
portfolio and delivered incremental sales."
Inspired by what Ms. Britt described as
"America's love for traditional desserts,"
the Dessert Shop line of cookies
feature limited-edition seasonal
cookie versions of cheese cakes
and pies.
"The range has proved popular and delivered incremental
growth to our sweet cookie
portfolio," she said. "This year
we will continue to innovate
with flavors such as blueberry
cobbler and chocolate brownie,
and rotate seasonal variations
such as pumpkin cheesecake."
Pepperidge also is grabbing hold of
the opportunity to create cookies for the
morning daypart.
"You see, over 25% of the cookie category volume is eaten before noon as
consumers like to either start the day
with something to go with their hot
beverage or punctuate mid-morning
with a little pick me up," Ms. Britt said.
"So we leveraged our soft cookie baking expertise to create treats tailored to
this consumer occasion. This new range
called Coffee Shop cookies reimagines
café favorites such as cinnamon bun
and banana nut, and we just launched
them this month (July)."
Pepperidge Farm's core Milano range
posted sales of $127,617,376 in the 52
weeks ended July 13, according to I.R.I.,
up 18% from the same period a year ago.
Ms. Britt attributed the brand's success to
advertising built around the insight that

Keebler maintains share
Dollar sales at Kellogg Co., Battle
Creek, Mich., fell 2% in the 52 weeks ended July 13, according to I.R.I. However,
John Bryant, chairman and chief executive officer, noted during a July 31 conference call with analysts to discuss secondquarter earnings that the Keebler cookie
brand maintained share in the quarter.
"The Chips Deluxe line saw good
growth as the new cookies co-branded with M&Ms continue to do well,"
Mr. Bryant said. "However, we posted
lower consumption and shipments in
our 100-calorie packs, and we actively
reduced s.k.u.s (stock-keeping units) in
the segment. We have some new products that recently launched, including
Keebler Smalls and a new variety of our
successful Simply Made cookies, which
will have a positive impact on results.
However, the effect of reductions in the
number of s.k.u.s in the tail will continue
for the balance of this year and into early
next year."
Identifying other occasions
General Mills, Inc. may not rank among
the leading wholesale cookie
makers, but the Minneapolis-based company is
making its mark in the category. The company last
year launched Pillsbury
soft cookies in C-stores,
and company executives
noted they are already
turning in the top third
of their category. Available in chocolate chip
and snickerdoodle, the
cookies are available
in a 3-oz bag for $1.49.
General Mills is
currently in about
50,000 C-stores across the country
and will continue to increase distribution
and strengthen its portfolio. To that end,
the company is partnering with Crossmark Brokerage to enter an additional
50,000 convenient store locations. MBN
- Eric Schroeder
Milling & Baking News September 2, 2014 / 25

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Milling & Baking News - September 2, 2014

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