June Mason, a lab technician in the test kitchens at Keebler’s headquarters in Elmhurst, has been experimenting with toppings for a peanut butter-and-chocolate cookie.
“I make prototypes for whatever they have in mind,” she said. “Sometimes they let me go hog wild.”
And yes, occasionally it is part of her job to taste samples.
Mason researches cookies with food scientists in Keebler’s 9-year-old development building. While their effort may not be the most noble of all scientists’ work, it is vitally important to Keebler, which continues to battle for a greater share of the cookie market. Its fiercest competitor is Nabisco, which runs the world’s largest bakery on Chicago’s Southwest Side.
The rivalry between the nation’s two biggest cookie-makers is just part of Chicago’s competitive cookie industry. For cookie-makers and sellers of all kinds and sizes, the business is a serious one.
And there is no better place to base a cookie operation, many say, than Chicago, which some industry people call the nation’s cookie capital.
“Geographically, this area is probably one of the top, if not the top, producers of cookies,” said Ray Lahvic, editor emeritus of Bakery Production & Marketing magazine.
Although Chicago ranks just above the national average in cookie consumption-Albany, N.Y., ranks first-Chicagoland is one of the most important cookie-producing centers in the country, with nearly 20 cookie-making plants, Lahvic said.
Nabisco each year makes about 192 million pounds of cookies at its Chicago plant alone. Those include Oreos, its flavored Newtons and Chips Ahoy!, three of the best-selling cookies in the country.
Not long ago, Nabisco was talking about leaving Chicago. But late last year, the city made a deal to keep the cookie- and cracker-maker’s 2,400-employee plant here. During a year of negotiating with the city, Nabisco reiterated that it was considering a move. But the company also made it clear that it would like to stay in Chicago because of its central location in the nation and proximity to sources of its most important raw material, wheat.
Nabisco also did not want to leave behind its experienced Chicago workers. Nabisco knew that it would be far more expensive to build a plant than to retool its current one.
So the company held out and the city struck a deal. In December, the city agreed to offer up to $90 million, mostly in tax savings, so that the baker would pursue the $300 million to $500 million upgrading.
“This was extremely important because of the magnitude and size of the operation, one of the largest industrial sites in the City of Chicago,” said Greg Longhini, spokesman for the city planning office. “It was extremely complicated. Cookies are very important to this city. We are known as a cookie city, and how can we be a cookie city without the Nabisco plant?”
Nabisco has about 40 percent of the cookie market, up from 35 percent in 1992, thanks in part to the introduction of the fat-free Newtons that year, said Mark Gutsche, Nabisco senior spokesman.
Keebler has about 13.8 percent of the market. In early 1993, its owner, United Biscuits of Great Britain, ever wary of consumer eating habits, aggressively moved to boost cookie-market share. Frustrated by consumers turning to cheaper, generic cookies, United Biscuits purchased Bake-Line, a private-label cookie company based in Des Plaines, for about $70 million. Private-label companies make cookies primarily for grocers such as Jewel and Dominick’s, a part of the market that has been hot recently. Bake-Line has about 25 percent of the nation’s private-label cookie market.
Stuart Greenblat, a Keebler spokesman, said that during the last two or three years, sales of the “non-branded” cookies, as well as other products, have skyrocketed. “The proliferation of private-label (products) has occurred not just in our area but all over the supermarket,” he said.
R.W. Frookies, creator of fruit-sweetened cookies and crackers, recently purchased 9-year-old Delicious Cookies, also of Des Plaines, an ambitious upstart in the cookie business. Dealmakers said the merger could increase fourfold the target market of both companies.
“Our companies are two that are philosophically pretty similar,” said Phil Roos, president of Delicious. “There was just a lot of synergy there.”
Delicious operates through contract baking at 15 sites, and its products are distributed independently. One of its latest endeavors is a line called Big Brand “co-branded” cookies, which are made in partnership with other food labels, namely Skippy, Heath, Land O’ Lakes, Welch’s, Musselman’s, Butterfinger and Raisinets.
The company decided to pursue co-branded cookies after a 1989 venture in which Delicious had obtained the rights to selling Teenage Mutant Ninja Turtles cookies. For a while, Turtles cookies, thanks to the Turtles marketing blitzkrieg that had hit the U.S., were enough to double profits at Delicious.
“But that kind of stuff doesn’t last forever,” Roos noted.
So as the popularity of the Turtles cooled, the company looked for marketing marriages that would endure. Now it plans to release several more co-branded labels and is preparing to announce more joint ventures between the two companies.
Delicious is one of the smaller cookie outfits in this area that seems to have found its niche. Other cookie-makers, however, have come and gone.
Longtime local baker Schulze and Burch Biscuit Co., which still operates a 600-employee plant at 35th Street and Racine Avenue, stopped producing cookies in the mid ’80s, a time industry leaders call the days of “cookie wars.” Company President Pat Boyle said cookie-making was simply no longer “cost effective.”
“There is a tendency for the non-majors to concentrate on a few things that they do well,” he said.
For Schulze and Burch, that meant granola bars, toaster pastries and crackers. And for now, “the economics are not there” for the company to even consider making cookies again, Boyle said.
Ed Lee, editor of the trade journal Modern Baking, said that some of the most notable recent growth in the cookie industry had been with freshly baked cookies, such as those made from scratch in grocery store bakeries, or specialty premium cookies made by such companies as Mrs. Fields.
He said the growth of that sector began during the ’80s, “when people had that discretionary dollar to walk up and down the mall and spend on a cookie.”
Mrs. Fields now has about 10 locations in Chicago and more in shopping malls across the suburbs. Company President Larry Hodges said that since the beginning of the year, Chicago has been Mrs. Fields’ No. 1 market, displacing Southern California. Hodges said, “It’s hard to tell what accounts for the change.
“We depend on mall traffic. But no one gets in their car and goes down to the mall for a Mrs. Fields cookie. We’re not really a destination. Our sales are good when retail sales are up, when sales are good in general.”
In addition, neighborhood Chicago bakeries still claim a share of the market, though it’s not so large as it once was.
“I think that we remember growing up with all the neighborhood bakeries, a lot of bakeries that you used to be able to find on every corner, especially certain ethnic neighborhoods in Chicago,” said Dennis Stanton, operations manager for Swedish Bakery, 5348 N. Clark St. “We really tap on that memory of the cookies that Mom used to make that you would eat fresh out of the oven.”
He said cookies account for about 10 to 20 percent of the bakery’s sales.
But giants such as Keebler and Nabisco consider retailers of freshly baked cookies fairly inconsequential in the overall market. The real battles for the majority of cookie dollars are waged on supermarket shelves, they say.
“The cookie is a part of the eating experience,” said Keebler’s Greenblat. “It is a staple in America’s grocery carts.”
