Category Insight

Tough Cookies

BY ANNIE HOLLON

Whether in dough form or their fully baked state, cookies remain staples in the baking industry. But as consumer tastes evolve, indulgence increases and franchises see a surge of popularity, bakers behind these sweet treats are facing their own challenges.

From supply chain issues to the ongoing COVID-19 pandemic and beyond, the “whatever it takes” mentality takes hold for Rebecca Abel, CEO and founder of luxury cookie brand D’Vine Cookies, as she keeps her operation running.

“Our two major challenges are staffing and supply chain,” she said. “Staffing is always a challenge because even when we’re fully staffed, there’s just continuous outbreaks.”

Despite all employees wearing masks within the facility, members of Abel’s staff have already had COVID-19 three to four times, which has directly impacted operations. With staff out with COVID, she has had to wear all the hats, sometimes stepping away from R&D and into the mixing station. In addition to illness induced by the pandemic, the conflict of finding new staff is a notable challenge across the industry that’s impacting businesses like Abel’s luxury cookie company.

“For the most part, we made it out relatively unscathed, but we’ve been very flexible to have enough back-up product so we can afford to shut down when we have an outbreak,” she said. “We’ve had a couple of instances over the past two years where we’ve had to close down our operation for a few days, so that’s obviously difficult to have to stop production.”

The Ferndale, MI-based bakery continues an uphill battle with supply chain issues that has led Abel to seek out third or fourth tier suppliers for ingredients, a major issue for a brand reliant on inclusions to create its indulgent goods.

“Every month, it seems like there’s a different shortage on a different ingredient,” Abel said.

Similarly, Orem, UT-based Crumbl, an emerging cookie giant known for its rotating weekly menu of limited-time offer cookies, also faces its fair share of challenges amid supply chain issues. With the company planning weekly lineups several months in advance, preparation eases the pressure on its franchises, which now span 500 locations.

“We try to plan out our menu as far in advance as possible,” said Katie Dunn, Crumbl’s senior director of procurement. “We’re always working with R&D to come up with backups and make sure we’re prepared and can pivot quickly if challenges arise. We’ve had to do that a few different times with different cookies.”

Working around these shortages means learning to be limber with product offerings to accommodate for supply chain troubles. Crumbl’s R&D team handles challenges by keeping pace and staying nimble and on top of consumer trends.

D’Vine Cookies relies on multiple tiers of supliers to get through supply chain shortages.

Abel uses the same strategy; when facing shortages on a certain item, she creates flavors with whatever is coming in that can get around the bottlenecks in the supply chain.

“We’re really a team with our suppliers,” Abel said. “They know what we need and they’re giving us forewarning. We’re hearing two or three months in advance with some ingredients that they hear down the pipeline that there’s going to be issues.”

Communication has served as a critical resource for Abel and her suppliers, working together in the face of shortages and uncertainty in the supply chain.

Additionally, the Crumbl R&D and procurement teams also focus on communicating with their suppliers, which enables the company to plan for backup flavors and support their franchises when needed. “We constantly want to make the best cookies in the world, and that requires a bit of flexibility, especially with all of the craziness in the industry and supply chain,” said Chelsea Currier, VP of R&D at Crumbl. “We have lots of incredible partners and vendors that we work with. They understand our needs, they understand the standards that we have for our cookies and they’re able to quickly turn around. Between those important relationships that we have with our vendors, we’re able to create some really great quality cookies.”

With the need to adjust to backup ingredients, D’Vine is in a constant state of R&D. Abel, who does much of the research and flavor development herself, said that because of supply issues they’re in need of new backup flavors and other ways to make cookies.

In Greg Toufayan’s case, it’s the simplest yet most crucial ingredients that have

troubled his cookie manufacturing lines. The CEO of Toufayan Bakeries — which produces Goodie Girl, a gluten-free cookie line, and Sophia’s Cookies, which ranges from sandwich crème cookies to animal crackers and more — shared that to avoid shortages in critical ingredients like sugar, the bakery had to purchase contracts at higher prices.

“In response to just being concerned about getting and having difficulties, even this year, with getting some materials in house on time, we bought long at historically higher prices covering all of 2023,” he said.

To keep his cookie lines running, Toufayan and his team have had to take a lot of problems like delays, fuel surcharges and more on the chin. At one of Toufayan’s bakeries in Florida, the plant manager went down to the rail yard on a Saturday, cookies and fresh bread in tow, to ask workers to move railroad cars blocking cars filled with flour that needed to be transferred to a truck to avoid the bakery running out of flour.

On top of the internal issues in the bakery, consumer requests and demands make things difficult for bakeries like D’Vine to keep up with demand.

“We’re just doing the best we can, giving some longer lead times to certain clients and explaining the predicament that we’re in, and for the most part people are understanding,” Abel said. “It’s about open communication with our customers about what our issues are and that we are always trying to do the best that we can for them, but there’s times that we can’t deliver exactly what’s needed.”

Consumers’ ability to communicate with bakers through avenues like social media has changed the game for tracking and understanding trends. In what the company called “the Great TikTok Boom of 2021,” Crumbl found itself in a unique position to receive direct consumer feedback via user-generated content on the popular video app. When #CrumblReview, where consumers taste-tested the weekly lineups online, went viral, the company seized the opportunity not only to grow a substantial social media following — 5 million followers on TikTok and more than 2 million on Instagram — but also to gain direct consumer feedback in an unprecedented way.

“Feedback is something we hold in the highest regard, and people are always commenting, ‘Tell us when this cookie’s coming back,’ or, ‘You guys should try this kind of a cookie,’” Currier said. “Those are the things we’re always taking into account. When it comes to the creation of cookies, there’s always a number of factors that go into it and feedback is one of those.” In addition to online comments, Crumbl’s R&D team runs a testing program at 30 of the brand’s retail locations to collect live consumer feedback. This is part of the rigorous process each of these flavor varieties goes through, in addition to a strict set of guidelines, before a flavor is put on the menu.

According to the company, the top flavors and inclusions among consumers include candy and fruit. Between the company’s LTO structure and ongoing issues with the supply chain, forecasting for ingredients and inclusions for flavors that only come out once or twice a year presents a unique challenge for R&D and procurement.

“Because we have so many locations, the sheer size of that kind of an order for candy bars and fruit requires months, sometimes even years, of lead time to procure the quantity needed for these cookies,” Dunn said.

Cookies with candy and fruit inclusions are among the most popular flavors for Crumbl consumers.

As working with her suppliers to forecast flavors has helped keep business moving at D’Vine, Abel also noted that equipment needs and automation have become imperative to keeping the business running as staff shortages and labor recruitment struggles challenge her company’s production operations.

“We’re partially automated, and we have a lot of equipment,” she said. “But when we’re short on people, I’m thinking, ‘Gosh, if I had one particular machine, this would make this much quicker today,’” Abel said. “It’s making the demand for automation higher and higher when we’re dealing with staff shortages and challenges finding employees.”

Technological advances have improved operations for Toufayan Bakeries, which runs two to four cookie lines of cookies for up to 60 different SKUs.

“Our oven from Reading Bakery Systems has been working very well to help us with our quality, our consistency and overall production,” Toufayan said. Abel is moving D’Vine toward further automation.

As the holiday season quickly approaches, Abel has focused on finding more staff and more equipment, especially as the company prepares to move into a new commercial facility with hopes of having up to six production lines in the new space. The fifth move in four and a half years, this transition has been long awaited and necessary for D’Vine. Abel anticipates growth for the company in the coming years.

“We’re hoping we can utilize the space for three years before we outgrow it,” she said. “I went much bigger than our current production model with anticipation of accounts that we have starting next year so that we won’t run into this space issue a year later.”

Despite the challenges facing the category, cookies continue to hold their own within the baking industry, and cookie producers are holding their own in keeping up. CB

He noted that his company’s partnership with Combi Packaging Systems works to reduce labor getting cookie packs in cases and those cases stacked onto pallets. Toufayan’s other partnerships aid in the amount of labor needed in his bakeries to stack and wrap the cookies, with some solutions lessening labor needs by three people on a given shift.

D’Vine is on the rise and growing quickly, which means Abel’s equipment needs have changed too. With the growth of her cookie business, she’s looking to add additional flowwrappers, waterwheels, multihead depositors and more to ease operational and labor needs.

“We recently sourced another panner so that instead of having an operator take the cookies from the Vemag conveyor belt onto the pan, we get them to go right to the pan,” Abel said.

With the use of flowwrappers from Syntegon, as well as an indexing conveyor and a partnership with Reiser for sourcing depositing equipment,