When Nutella maker Ferrero doled out $1.3 billion to purchase several snacking brands from Kellogg in 2019, one of the largest was Famous Amos, a nearly 50-year cookie.
But the chocolate chip cookie offering had fallen on hard times: Sales were declining, household penetration was flat and repeat purchases were moving sideways. The brand hadn’t benefited from any advertising in more than a decade.
“Because of that, we needed to do something,” Rachna Patel, a vice president of marketing at Ferrero, recalled in an interview.
Research showed that consumers, most notably millennials, were leaving the dry packaged goods space for cookies in the bakery, deli section or nearby specialty stores that were viewed as fresher and containing better ingredients.
Patel said Ferrero decided to further premiumize the Famous Amos brand by increasing the amount of chocolate to make the chip the top ingredient. It also used Belgium chocolate. The new cookie, which launched in 2021, resonated better than the original recipe in taste tests.
Ferrero also added other cookie offerings — Philippine Coconut and White Chocolate Chips; Mediterranean Hazelnut and Chocolate Chips; and British Salted Caramel and Chocolate Chips — to the Famous Amos brand through its Wonders From the World line to reflect interest among millennials who had a strong international pallet.
Where the cookies were carried in the grocery store was altered, too. Famous Amos moved from competing with brands like Oreo and Keebler to going head-to-head with other premium brands such as Tate’s and Pepperidge Farm.
But Ferrero found that despite these changes, repeat rates “tapered off” after an initial surge and sales “struggled” to surpass the older recipe, Patel said. The company discovered that while many people enjoyed the product, it cost more than they were willing to pay. A 7-ounce bag of Famous Amos chocolate chip cookies sold for $7.99 at Walgreens, for example. Other consumers clamored on social media for the original flavor.
Ferrero knew it needed to act, or risk hurting the brand’s long-term equity.
“We went back to the drawing board and started again from scratch,” Patel recalled.
Ferrero chose to discontinue its Wonders From the World line, which is being phased out this year. It also returned to the original recipe for its iconic chocolate chip cookie and debuted a sealable, stand-up bag that addressed shopper demand for freshness.
In addition, Ferrero increased the amount of cookies in the bag from 7 ounces to 9 ounces, while cutting the price to $4.99 — moves, the company said, that increased the cookie’s value among consumers and helped contrast it with other food offerings that were charging more. Where the product was carried in stories changed again too, with retailers moving it back next to Oreo and other so-called everyday cookies.
The updated Famous Amos cookie started shipping last November.
So far, the changes have proven to resonate with consumers. Since the relaunch, repeat rate has increased by 5%. Sales of Famous Amos at some retailers have matched or exceeded where the cookie was when Ferrero purchased it five years ago. “It’s doing phenomenal,” Patel said.
Still, the misstep has provided Ferrero with some valuable insight. “There were things that needed to be fixed” with Famous Amos, Patel said, noting the company’s prior expertise in premiumizing other brands like Butterfinger in its portfolio. “We chose to fix the product as opposed to putting a brand campaign behind it, which might have been enough.”
With Ferrero having successfully rejuvenated Famous Amos, the company is now looking toward the brand’s future — but moving more cautiously this time. It’s planning a marketing campaign early next year that touts the cookie’s authenticity, history and homemade recipe.
Ferrero also is planning new product launches.
Depending on how the brand performs in 2024, Ferrero could talk with retailers about carrying another Famous Amos cookie or two next year. If the core chocolate chip product needs more time, Ferrero could decide to wait another year. Patel declined to say what innovations are coming, but noted that many quick-service restaurants carry chocolate chip cookies along with some combination of oatmeal, sugar and peanut butter.
“We don’t want to go so quickly. We want to make sure that we do it one step at a time,” Patel said.
