You go for your daily coffee run — but what about your daily cookie run?
Turns out, a sugar rush may not be as popular a habit.
Two big cookie chains are struggling, and experts are pointing to three things: customer habits, fads and over expansion. And that may mean a change in your favorite cookie shop.
On Friday, Chip City Cookies announced the closure of the last of its locations. Meanwhile, Crumbl co-founders Sawyer Hemsley and Jason McGowan stepped down from their roles in May, and Entrepreneur reported that August sales were 70% lower than the previous two years, with 57 store closures this year and company layoffs. With these challenges, business experts think the cookie industry could be changing.
While a once huge empire is seemingly crumbling,
it's not a huge surprise to business experts.
Why Crumbl and Chip City are struggling
The cookie industry isn't the easiest business model, experts say.
Cookies are more of an occasional splurge rather than a habit, said Janet Helm, MS, RD, a food trends expert and former global foods and associate director of food and drink for Mintel, a marketing intelligence and consulting firm based in London.
People might buy coffee or breakfast every day, but it's hard to build a habit around a $5 specialty cookie. So when Crumbl's success brought dozens of lookalike chains, Helm said, the market got overbuilt.
Cookies became the latest fad, like frozen yogurt and cupcakes.
"It's not surprising at all that the cookie bubble is bursting. We see this over and over again: when a specific restaurant concept gets hot, a bunch of locations and brands start to flood the market," said Mike Kostyo, the vice president of food and beverage consultancy Menu Matters and an expert in the food industry trends field for over a decade. "The same thing happened with pizza fast casuals, poke chains, dirty soda brands, cupcake bakeries, and frozen yogurt operators."
Do we really want cookies every day?
Maeve Webster, the president of Menu Matters who has a Le Cordon Bleu culinary degree, an MBA and owned an award-winning café, said that with these crowded markets, you'll likely see fallouts with places that grew too fast without showing what's makes their cookie business stand out in a crowded market.
It isn't just about the cookie business model, either. It's about whether we really want cookies every day.
It's hard to justify paying for one specialty cookie rather than a whole package for the same price at the store, said Helm. And that choice gets easier when people are avoiding sweet treats in general, because of the rise of weight loss medications.
While some chains are struggling, that doesn't mean cookies are out of style.
"Consumers haven't given up treats. They're becoming more intentional about them. The brands that succeed will offer smaller portions, more transparency, and a reason to choose them beyond the shock factor," Helm said.
What Chip City and Crumbl changes mean for you
So cookies aren't going away, but experts expect some noticeable changes in how they're sold.
Helm said Chip City might be a "warning sign" for the viral-cookie model, but it doesn't mean it's a "death sentence" for other cookie brands like Crumbl. This may show that novelty, like a rotating menu, matters less than repeat purchases.
Helm expects there to be smaller cookies, mini formats and fewer weekly flavors in some cookie businesses. She also expects more functional ingredients in cookies, like protein, along with global flavors to bring in new customers.
Salar Sheik, founder of Savory Hospitality Restaurant Consulting with over 20 years of experience in the food and beverage industry, also believes that with these closures, businesses might simplify menus, adjust portion sizes or introduce bundles and smaller, more affordable options.
Kostyo agreed.
"These shops grow very fast and get a lot of attention," he said. "But it's hard to maintain that same momentum, particularly as people move on to the next big thing."
This article originally appeared on USA TODAY: Crumbl and Chip City are closing stores. What the changes mean for you
