Scope and Methodology

• Scope of Report
• Report Methodology

The Market


• Cookie Sales to Hit $7 Billion in 2006
• Table 1-1: U.S. Retail Sales of Cookies, 1997-2006 (dollars)
• Supermarkets Account for Bulk of Total Retail Sales
• Figure 1-1: Share of U.S. Cookies Market by Retail Outlet, 2001 (percent): 6 Retail Outlets
• Children and Cookie Consumption
• Line Extensions Are #1 Market Catalyst
• Grown-Ups Indulge Themselves with Premium Cookies
• Demand Shifts from Fat- to Sugar-Free Products

The Marketers


• Nabisco Dominates Ranks of Mass Marketers
• Private Label Controls 11% of Mass-Market Sales
• Big Cookie Marketers Acquired by Even Bigger Parents
• Competition Takes Two Forms
• Marketers Carry Competition into Nontraditional Retail Outlets

Marketing Dynamics


• Line Extensions
• Traceable Ad Expenditures at $102 Million in 2001
• Individual Promotions for Line Extensions
• Corporate Websites

Retail Dynamics


• Supermarkets Dominate Mass-Market Sales
• Cookie Buyers Average $40.10 in Category Spending
• Private-Label Cookies Lose Share in Supermarkets
• Competition from In-Store Bakeries
• Supermarkets Try to Meet Demand for Single-Serve
• Figure 1-2: Cookie Usage Levels by Number of Packages/Boxes Consumed Monthly, 2001 (percent): 6 Classifications

The Consumer


• 82% Penetration Level for Cookies
• Larger Households Are Key Consumers
• Downscale Skew to Heavy Users
• 30% Most Often Eat Sandwich Cookies
• 60% Draw for Nabisco

II. The Market

The Products

• Scope of Report
• Definition of Cookies
• Ingredients
• Cookie Classifications
• Hybrid Cookie Types
• Price Segments
• Demographic Classifications
• Healthful Cookies
• Packaging Materials
• The Stacking Approach
• The Loose Approach
• Holiday Butter Cookie Packaging
• Snack Size and Vending Machine Packaging
• Package Sizes
• Figure 2-1: Estimated U.S. Retail Sales of Cookies, 1997-2001 (dollars)

Market Size and Growth


• Methodology for Sales Estimates
• Cookie Market Exceeds $6 Billion
• Table 2-1: U.S. Retail Sales of Cookies, 1997-2001 (dollars) Supermarkets Account for Bulk of Total Retail Sales
• Mass-Market Sales Near $5 Billion in 2001
• Table 2-2: U.S. Mass-Market Sales of Cookies, 1997-2001 (dollars) Supermarkets Claim Four-Fifths of Mass-Market Sales
• Figure 2-2: Share of U.S. Mass-Market Sales of Cookies by Retail Outlet, 2001 (percent): Supermarkets, Mass Merchandisers, Drugstores 84% of Southern Households Use Ready-to-Eat Cookies
• Table 2-3a: Household Consumption of Cookies by Region: Users vs. Heavy Users, 2001 (percent): South, Midwest, Northeast, West African-American Households Comprise 16% of Heavy Users
• Table 2-3b: Household Usage of Cookies by Race/Ethnicity: Users vs. Heavy Users, 2001 (percent): White/Not Hispanic, Black, Spanish/Hispanic, Asian Key Age Bracket Is 35-44
• Table 2-3c: Household Usage of Cookies by Adult Age Bracket: Users vs. Heavy Users, 2001 (percent): From Age 18 to 75 and Over Children and Cookie Consumption
• Table 2-3d: Usage of Cookies by Household Size: Users vs. Heavy Users, 2001 (percent): One, Two, Three-Four, Five or More
• Table 2-3e: Usage of Cookies by Age of Children in Household: Users vs. Heavy Users, 2001 (percent): From Age Under 2 to 17 and No Children

Factors to Market Growth


• Line Extensions Are #1 Catalyst
• New Products Drive Growth Too
• American Consumers Love to Snack
• Cookies Offer Convenience to Busy Consumers
• Children and Families Love Cookies
• Grown-Ups Indulge Themselves with Premium Cookies
• Demand Shifts from Fat- to Sugar-Free Products
• Figure 2-3: Projected U.S. Retail Sales of Cookies, 2001-2006 (dollars)

Projected Market Growth


• Cookie Sales to Hit $7 Billion in 2006
• Table 2-4: Projected U.S. Retail Sales of Cookies, 2001-2006 (dollars)
• Mass-Market Sales of Cookies to Reach $5.6 Billion in 2006
• Table 2-5: Projected U.S. Mass-Market Sales of Cookies, 2001-2006 (dollars)

III. The Marketers

Marketer Overview

• Two Classes of Marketers Based on Price Segment
• Nabisco Dominates Ranks of Mass Marketers
• Keebler Foods Places Second
• Parmalat, Pepperidge Farm, McKee Foods Comprise Second Tier
• Four Secondary Mass-Market Players
• Smaller Mass Players Often Focus on Single Product
• Premium Import Marketers
• Natural and Organic Marketers
• Table 3-1: The U.S. Cookies Market: Selected Marketers and Brands, 2002 (33 Marketers)

Marketer and Brand Shares


• Methodology for Market Share Estimates
• Nabisco Controls More Than One-Third of Mass-Market
• Keebler Places Second
• Parmalat Captures Third Place
• Pepperidge Farm Is Fourth
• McKee Foods Ranks Fifth
• Ralcorp Places Sixth
• Table 3-2: Marketer and Brand Shares of U.S. Mass-Market Sales of Cookies, 2000 vs. 2001 (dollar and percent): 9 Marketers/21 Brands, All Other, Private Label
• Three Marketers Earn an Approximate 1% Share Each
• Private Label Controls 11% of Mass-Market Sales
• Figure 3-1: Marketer Shares of U.S. Cookies Market, 2001 (percent): 5 Marketers, Private Label, All Others
• Oreo Is #1 Brand of Cookie
• Table 3-3: Brand Shares of U.S. Mass-Market Cookie Sales, 2000 vs. 2001 (percent): 10 Brands, Private Label, All Others
• Figure 3-2: Brand Shares of U.S. Cookies Market, 2001 (percent): 4 Brands, Private Label, All Others

Competitive Overview


• Big Cookie Marketers Acquired by Even Bigger Parents
• Ralcorp Holdings Grows Through Acquisition
• Competition Takes Two Forms
• Marketers Carry Competition into Nontraditional Retail Outlets
• Competitors Promise Convenience to Consumers
• Private Label Becomes Increasingly Upscale

Competitive Profile: George Weston Ltd.


• Largest Canadian Supermarket Operator
• Acquisition of Bestfoods in 2001
• Sales of Bestfoods Cookie Brands Continue to Drop
• Table 3-4: U.S. Mass-Market Sales of Bestfoods Cookies, 1997-2001 (dollars)
• Grupo Bimbo Buys Baking Rights in 2002

Competitive Profile: Keebler Foods Co.


• #2 U.S. Cookie Maker
• Kellogg Acquires Keebler in 2001
• Keebler Enjoys Cookie Sales of $756 Million in 2001
• Figure 3-3: Brand Shares of Keebler Cookie Sales, 2001 (percent): 7 Brands, All Others
• Chips Deluxe Is #2 Chocolate Chip Cookie Brand
• Table 3-5: U.S. Mass-Market Sales of Chips Deluxe Cookies by Variety, 2000 vs. 2001 (dollars and percent): 3 Varieties, All Chips Deluxe Varieties
• Rainbow Chips Deluxe Available in Seasonal Varieties
• Fudge Shoppe Sales Near $128 Million in 2001
• Table 3-6: U.S. Mass-Market Sales of Fudge Shoppe Cookies by Variety, 2000 vs. 2001 (dollars and percent): 4 Varieties, Other Fudge Shoppe, All Fudge Shoppe Varieties
• Keebler Mini Cookies Debut in 2001
• Sales of Sesame Street Cookies Nearly Double
• Former President Baking Co. Brands Account for 25% of Keebler Sales
• Murray Sugar-Free Caters to Diabetics
• Table 3-7: U.S. Mass-Market Sales of Murray Sugar-Free Cookies, 1997-2001 (dollars)
• Keebler Continues to Develop Tasty Sugar-Free Cookies

Competitive Profiles: McKee Foods Corp.


• Largest Independent U.S. Bakery
• McKee Enjoys Cookie Sales of $229 Million in 2001
• Table 3-8: U.S. Mass-Market Sales of Little Debbie Cookies by Variety, 2000 vs. 2001 (dollars and percent): 10 Varieties, All Little Debbie Varieties
• Seasonal Cookies Experience Strongest Growth
• Many Single-Serve Little Debbie Entries Available
• Mini Little Debbie Cookies Appear in 2001
• McKee Introduces Little Debbie Big Snack Vend Packs in 2001
• McKee Enters into Agreement with Little League

Competitive Profile: Mrs. Fields’ Original Cookies, Inc./ Nonni's Food Company


• Mrs. Fields Stores Are #1 Retail Outlet for Cookies
• Nonni’s Takes Mrs. Fields’ Brand to Supermarkets in 2001
• Mrs. Fields Brand Equity Boosts Mass-Market Launch
• Nibblers Is Mrs. Fields’ Bite-Sized Entry
• Nonni's Famous for Biscotti

Competitive Profile: Nabisco Biscuit and Snacks Group


• Kraft Acquires Nabisco in 2000
• Targeting Nontraditional Retail Outlets
• Many Cookie Brands Make Nabisco #1
• Figure 3-4: Brand Shares of Nabisco Cookie Sales, 2001 (percent): 7 Brands, All Others
• Oreo Is #1 Cookie Brand
• Table 3-9: U.S. Mass-Market Sales of Oreo Cookies by Variety, 2000 vs. 2001 (dollars and percent): 8 Varieties, All Oreo Varieties
• Sales of Mini Oreo Increase 81% in 2001
• Seasonal Oreo Varieties Also Perform Well
• Chocolate Crème Oreo Debuts in 2001
• Chips Ahoy! Is #1 Chocolate Chip Cookie
• Table 3-10: U.S. Mass-Market Sales of Chips Ahoy! Cookies by Variety, 2000 vs. 2001 (dollars and percent): 4 Varieties, All Chips Ahoy! Varieties
• Chips Ahoy! Candy Blast and Peanut Butter Debut in 2001
• Newtons Sales Falter
• Table 3-11: U.S. Mass-Market Sales of Newtons Cookies by Variety, 2000 vs. 2001 (dollars and percent): 6 Varieties, All Newtons Varieties
• Sales of SnackWell’s Continue to Decrease
• Table 3-12: U.S. Mass-Market Sales of SnackWell’s Cookies, 1997-2001 (dollars)
• Sugar-Free Varieties Boost SnackWell's Line
• Kraft and Nabisco Launch Joint Back-to-School Promotion

Competitive Profile: Newman’s Own Organics


• Newman’s Own Offspring
• Sales of Newman’s Own Organics Cookies Soar
• Table 3-13: U.S. Mass-Market Sales of Newman’s Own Organics Cookies, 1997-2001 (dollars)
• Fig Newmans Are Company’s Top Seller
• Champion Chips Follow Fig Newmans
• Sandwich Cookies and Alphabet Cookies Also Available

Competitive Profile: Parmalat North America


• Subsidiary of Parmalat Finanziaria
• Parmalat Acquires Specialty Foods and Salerno in 2000
• Specialty Foods Acquisition Makes Parmalat #3 Cookie Marketer
• Figure 3-5: Brand Shares of Parmalat Cookie Sales, 2001 (percent): 4 Brands, All Others
• Archway Family Packs Receive Smaller Packaging in 2001
• Parmalat Launches Disney Atlantis Cookies in 2001
• Premium Ghirardelli Cookies Debut in 2000

Competitive Profile: Pepperidge Farm


• Mass-Market Cookie Sales of $255 Million in 2001
• Many Factors Explain Pepperidge Farm's Growth
• Distinctive Line Is Pepperidge Farm's Top Seller
• Distinctive Cookies Target Adults Rather Than Children
• Popular Milano Available in Many Varieties
• Chocolate Chunk Sales Are $57 Million in 2001
• Upscale Dessert Bliss Cookies Appear in 2002
• Spritzers Debut in 2000
• Pepperidge Farm Launches First-Ever National Tour in 2002

Competitive Profile: Ralcorp Holdings, Inc.


• A Leading Marketer of Private-Label Foods
• Ralcorp Grows through Acquisition
• Lofthouse Acquisition Makes Ralcorp a Major Cookie Player
• Table 3-14: U.S. Mass-Market Sales of Lofthouse Cookies, 1997-2001 (dollars)
• Lofthouse Cookies Available in Wide Variety
• Cascade Acquisition Provides Access to In-Store Bakeries
• Ralcorp Acquires Ripon Foods in 1999
• Ralcorp Looks to Increase Its Private-Label Business

Competitive Profile: Voortman Cookies Ltd. (Traditional Baking)


• A Canadian, Family-Owned Business
• Mass-Market Sales at $58 Million in 2001
• Table 3-15: U.S. Mass-Market Sales of Voortman Cookies, 1997-2001 (dollars)
• Voortman Offers Many Cookie Varieties
• Voortman Expands to Southwest in 1989
• Traditional Baking Expects Traditional Brand to Grow

Competitive Profile: Walkers Shortbread, Inc.


• Premium Imported Shortbread from Scotland
• Available Through Gourmet Shops and Internet Boutiques
• Walkers Is Renowned for Its Tins
• Duchy Originals Is Walkers' Organic Line
• U.S. Division Imports Other European Cookies
• Mass-Market Sales of Walkers Dip in 2001
• Table 3-16: U.S. Mass-Market Sales of Walkers Shortbread Cookies, 1997-2001 (dollars)
• New U.S. Varieties Since 2000

IV. Marketing Dynamics

Marketing and New Product Trends

• Line Extensions
• Bite-Sized, Single-Serve Snack Cookies
• Indulgent Cookies
• Imported Premium Cookies
• Indulgent Chocolate Cookies
• Good-For-You Cookies
• Sugar-Free Cookies
• Licensed Cookies
• Table 4-1: The U.S. Cookies Market: Selected New Product Introductions, 2001-Spring 2002

Advertising Expenditures


• Traceable Ad Expenditures at $102 Million in 2001
• First-Place Nabisco Spends $61 Million
• Keebler Foods Places Second with $21 Million
• Third-Place Pepperidge Farm Spends $20 Million
• Two Cookie Marketers Spend $10-$12 Million

Advertising Positioning


• Integrated Campaigns Capitalize on Brand Strengths
• Individual Promotions for Line Extensions
• Indulgent Positioning

Consumer Promotions


• Coupons
• Cross Promotions
• Licensing Agreements
• Seasonal Campaigns
• Corporate Websites
• Online Shopping Considerations
• Examples of Consumer Promotions

Trade Advertising and Promotions


• Trade Advertisements Focus on Bottom-Line Potential
• Free Displays and Marketing Aids
• Trade Promotions Are Standard

V. Retail Dynamics

Retail Trends

• Mass-Market Outlets Account for 80% of Total Retail Sales
• Figure 5-1: Share of U.S. Cookies Market by Retail Outlet, 2001 (percent): 6 Retail Outlets
• Supermarkets Dominate Mass-Market Sales
• Figure 5-2: Share of U.S. Mass-Market Cookie Sales by Retail Outlet, 2001 (percent): Supermarkets, Mass Merchandisers, Drugstores
• Cookie Buyers Average $40.10 in Category Spending
• Average Supermarket Cookie Price at $2.75 a Pound
• Supermarket Cookie Price Segments
• Table 5-1: Representative Supermarket Prices of Selected Cookie Brands: By Price Per Pound, 2001
• Cookie Shelf Space in Supermarkets
• Special Supermarket Cookie Displays
• Cookie Marketers Often Provide Displays
• Private Label Plays Important Role in Supermarkets
• Private-Label Cookies Lose Share in Supermarkets
• Table 5-2: U.S. Supermarket Sales of Private-Label Cookies, 1997-2001 (dollars)
• Supermarkets Expand Private-Label Selection to Remain Competitive
• Competition from In-Store Bakeries
  • Cookies Account for 8% of In-Store Bakery Sales
  • In-Store Bakeries Capitalize on “Freshness”
  • Seasonal Products Contribute to In-Store Bakery Sales
  • Positioning Cookies in In-Store Bakeries
  
  
• Supermarkets Try to Meet Demand for Single-Serve
• Mass Merchandisers and Supercenters
• Private-Label Cookies Sell Well in Mass Merchandisers
• Drugstores Compete on Convenience Front
• Convenience Stores
• Vending Machines Deliver Single-Serve Convenience
• Warehouse Clubs
• Natural Food Stores
• Getting Direct

VI. The Consumer

• Figure 6-1: Cookie Usage Levels by Number of Packages/Boxes Consumed Monthly, 2001 (percent): 6 Classifications

Consumer Overview

• Note on Simmons Market Research Bureau Data
• 82% Penetration Level for Cookies
• Larger Households Are Key Consumers
• Downscale Skew to Heavy Users
• Table 6-1: Demographic Characteristics Favoring Household Consumption of Cookies, 2001 (U.S. Adults)
• Table 6-2: Demographic Characteristics Favoring Heavy Household Consumption of Cookies, 2001 (U.S. Adults)

Consumer Focus: Demographic Patterns by Cookie Type


• 30% Most Often Eat Sandwich Cookies
• Cookie Preferences and Household Composition
• Cookie Preferences and Social Status
• Nut Cookies Show Most Disproportionate Minority Draw
• Table 6-3: Usage Rates for Selected Cookie Types: By Types Eaten Most Often, 2001 (percent and number): 10 Classifications
• Table 6-4: Demographic Characteristics Favoring Household Use of Cookies by Type Most Often Eaten: Sandwich Cookies, 2001 (U.S. Adults)
• Table 6-5: Demographic Characteristics Favoring Household Use of Cookies by Type Most Often Eaten: Regular (Crunchy) Chocolate Chip Cookies, 2001 (U.S. Adults)
• Table 6-6: Demographic Characteristics Favoring Household Use of Cookies by Type Most Often Eaten: Soft Chocolate Chip Cookies, 2001 (U.S. Adults)
• Table 6-7: Demographic Characteristics Favoring Household Use of Cookies by Type Most Often Eaten: Bite-Size Cookies, 2001 (U.S. Adults)
• Table 6-8: Demographic Characteristics Favoring Household Use of Cookies by Type Most Often Eaten: Soft Cookies Other than Chocolate Chip, 2001 (U.S. Adults)
• Table 6-9: Demographic Characteristics Favoring Household Use of Cookies by Type Most Often Eaten: Vanilla (No Chips) Cookies, 2001 (U.S. Adults)
• Table 6-10: Demographic Characteristics Favoring Household Use of Cookies by Type Most Often Eaten: Fudge-Covered Cookies, 2001 (U.S. Adults)
• Table 6-11: Demographic Characteristics Favoring Household Use of Cookies by Type Most Often Eaten: Fruit-Filled Cookies, 2001 (U.S. Adults)
• Table 6-12: Demographic Characteristics Favoring Household Use of Cookies by Type Most Often Eaten: Nut Cookies, 2001 (U.S. Adults)
• Table 6-13: Demographic Characteristics Favoring Household Use of Cookies by Type Most Often Eaten: Chocolate (No Chips) Cookies, 2001 (U.S. Adults)
• Table 6-14: Demographic Characteristics Favoring Household Use of Low-Fat Products by Type Most Often Eaten: Cookies, 2001 (U.S. Adults)

Consumer Focus: Demographic Patterns by Cookie Brand


• 60% Draw for Nabisco
• Distinctive Profile for Pepperidge Farm
• Younger Adult Skew for Nabisco Chips Ahoy
• Children's Indices of 200 Plus for Grasshoppers and Dunkaroos
• Hispanic Index High for Mother’s Cookies
• Regional Indices of 300 Plus for Mother's, Stella D’oro, and Entenmann's
• Table 6-15: Household Usage Rates for Use of Selected Cookie Brands: By Brands Eaten Most Often, 2001 (percent and number): 25 Classifications
• Table 6-16: Demographic Characteristics Favoring Household Use of Cookies by Brand: Nabisco (Overall), 2001 (U.S. Adults)
• Table 6-17: Demographic Characteristics Favoring Household Use of Cookies by Brand: Keebler (Overall), 2001 (U.S. Adults)
• Table 6-18: Demographic Characteristics Favoring Household Use of Cookies by Brand: Pepperidge Farm (Overall), 2001 (U.S. Adults)
• Table 6-19: Demographic Characteristics Favoring Household Use of Cookies by Brand: Nabisco Oreo, 2001 (U.S. Adults)
• Table 6-20: Demographic Characteristics Favoring Household Use of Cookies by Brand: Nabisco Chips Ahoy Regular, 2001 (U.S. Adults)
• Table 6-21: Demographic Characteristics Favoring Household Use of Cookies by Brand: Keebler Chips Deluxe, 2001 (U.S. Adults)
• Table 6-22: Demographic Characteristics Favoring Household Use of Cookies by Brand: Store Brand, 2001 (U.S. Adults)
• Table 6-23: Demographic Characteristics Favoring Household Use of Cookies by Brand: Little Debbie, 2001 (U.S. Adults)
• Table 6-24: Demographic Characteristics Favoring Household Use of Cookies by Brand: Nabisco Fig Newtons, 2001 (U.S. Adults)
• Table 6-25: Demographic Characteristics Favoring Household Use of Cookies by Brand: Nabisco Chips Ahoy Chewy, 2001 (U.S. Adults)
• Table 6-26: Demographic Characteristics Favoring Household Use of Cookies by Brand: Archway , 2001 (U.S. Adults)
• Table 6-27: Demographic Characteristics Favoring Household Use of Cookies by Brand: Keebler Pecan Sandies, 2001 (U.S. Adults)
• Table 6-28: Demographic Characteristics Favoring Household Use of Cookies by Brand: Nabisco Nilla Wafers, 2001 (U.S. Adults)
• Table 6-29: Demographic Characteristics Favoring Household Use of Cookies by Brand: Keebler E.L. Fudge Sandwich, 2001 (U.S. Adults)
• Table 6-30: Demographic Characteristics Favoring Household Use of Cookies by Brand: Entenmann’s, 2001 (U.S. Adults)
• Table 6-31: Demographic Characteristics Favoring Household Use of Cookies by Brand: Nabisco Chips Ahoy Chunky, 2001 (U.S. Adults)
• Table 6-32: Demographic Characteristics Favoring Household Use of Cookies by Brand: Keebler Fudge Shop, 2001 (U.S. Adults)
• Table 6-33: Demographic Characteristics Favoring Household Use of Cookies by Brand: Vienna Fingers, 2001 (U.S. Adults)
• Table 6-34: Demographic Characteristics Favoring Household Use of Cookies by Brand: Mother's, 2001 (U.S. Adults)
• Table 6-35: Demographic Characteristics Favoring Household Use of Cookies by Brand: Keebler Rainbow Chips Deluxe, 2001 (U.S. Adults)
• Table 6-36: Demographic Characteristics Favoring Household Use of Cookies by Brand: Nabisco Fruit Newtons, 2001 (U.S. Adults)
• Table 6-37: Demographic Characteristics Favoring Household Use of Cookies by Brand: Nabisco SnackWell’s, 2001 (U.S. Adults)
• Table 6-38: Demographic Characteristics Favoring Household Use of Cookies by Brand: Nabisco Fat-Free Newtons, 2001 (U.S. Adults)
• Table 6-39: Demographic Characteristics Favoring Household Use of Cookies by Brand: Hydrox, 2001 (U.S. Adults)
• Table 6-40: Demographic Characteristics Favoring Household Use of Cookies by Brand: Pepperidge Farm Distinctive Collection, 2001 (U.S. Adults)
• Table 6-41: Demographic Characteristics Favoring Household Use of Cookies by Brand: Keebler Grasshoppers, 2001 (U.S. Adults)
• Table 6-42: Demographic Characteristics Favoring Household Use of Cookies by Brand: Grandma’s Rich'n Chewy, 2001 (U.S. Adults)
• Table 6-43: Demographic Characteristics Favoring Household Use of Cookies by Brand: Nabisco Fudge-Covered Oreo, 2001 (U.S. Adults)
• Table 6-44: Demographic Characteristics Favoring Household Use of Cookies by Brand: Stella D’oro, 2001 (U.S. Adults)
• Table 6-45: Demographic Characteristics Favoring Household Use of Cookies by Brand: Dunkaroos, 2001 (U.S. Adults)

Appendix I: Examples Of Consumer And Trade Advertising

Appendix II: Addresses Of Selected Marketers