Milling & Baking News - August 25, 2020 - 7

Editorial

Signs of life in slumbering cookie business

here was a time Keebler Co. seemed a solid merger was celebrated as a "winning combination for
No. 2 competitor in the cookie-cracker catego- consumers, customers and shareholders." The cookie
ry. Propelled by aggressive marketing efforts business began struggling within the first couple of
featuring Ernie the elf and magic ovens baking prod- years, and management said the segment would be
uct in the Hollow Tree, Keebler would almost nip at given greater attention. Exactly what Kellogg did to
the heels of market leader Nabisco, Inc.
bolster the cookie business never was clear, but afThat was a long time ago. The decline of Keebler ter acquiring Pringles from Procter & Gamble Co. in
and several other erstwhile significant cookie players 2012, it became clear cookies would not be the focus
has allowed a core segment of the category to fade.
of the Kellogg snacks business.
Against this backdrop, efforts by Ferrero Group,
Nabisco's cookie business was five times larger
Keebler's new owners, to inject vitality into the brand than Keebler's in 1995, and though Keebler later
are welcome. With a focus on reformulation, packag- acquired Sunshine Biscuit, Mondelez International
ing and marketing, Ferrero believes Keebler has great, (heir to the Nabisco business) cookie sales are eight
long-slumbering potential.
times larger than Keebler's now, acEfforts by Ferrero
Natalie Hagstrom, general mancording to Information Resources Inc.
Group, Keebler's
ager of cookies for Ferrara Candy Co.,
Oreo Double Stuf cookies alone, with
new owners, to inject
a Ferrero business, recently told Food
sales of $345 million, are not too far
vitality into the brand
Business News (sister magazine to Millbehind Keebler's total sales of $435
are welcome.
ing & Baking News) the potential for
million. Keebler is no longer the secKeebler stands ready to be tapped.
ond largest US cookie company. It is
"You start with storied, iconic brands that have now fourth, eclipsed also by Pepperidge Farm, Inc.
really high household awareness, and it's really just and McKee Foods Corp.
returning them to their iconic status," Ms. Hagstrom
Changes described by Ferrara are hardly radical
said. "They've been starved of resources and invest- - including the removal of high-fructose corn syrup
ments in product, packaging and messaging to the and a switch to natural vanilla. New packaging was
consumer."
developed to increase quality and freshness, featurA look back at Keebler's ownership history certain- ing modern and unifying designs across the Keebler
ly validates Ms. Hagstrom's narrative of neglect.
cookie brands. The products will be available in an
Established in 1853 in Philadelphia, Keebler was on-the-go format and variety packs to meet consumer
acquired in 1974 by United Kingdom-based United snacking behaviors.
Biscuits Holdings PLC. After struggling to generate
The company has launched a comprehensive margrowth and sustain profitability in the late 1980s and keting campaign to showcase the ingredient changes
early 1990s, the business was sold in November 1995 and brand story through digital and social channels
to a 50-50 joint venture owned by Flowers Industries, and in-store displays. It's the same playbook Ferrero
Inc. and Invus Group Ltd.
used when it acquired the US chocolate business of
Flowers and Invus engaged a talented new man- Nestle SA. Sales of brands like Butterfinger and Baby
agement team, led by Sam K. Reed, but the buyers' Ruth have responded, posting double-digit gains.
principal focus was on cost cutting rather than injectA few ingredient changes won't magically make
ing resources necessary for long-term growth into Keebler's aging portfolio on trend, and time will tell
the business. Flowers described the transaction not whether the acquired brand will gain and sustain moin strategic terms but as a "classic leveraged buyout" mentum. Still, after so many years in which such efand focused on the need to quickly fix what was "out forts were lacking, the seriousness with which its new
of line on the cost side" of Keebler.
owners are pursuing the market is a promising sign not
Kellogg Co. acquired Keebler in 2001, and the just for Keebler but for the entire cookie industry. MBN
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