Ferrero returns to the original recipe with Famous Amos after brand restructuring failed to gain traction

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When Nutella maker Ferrero spent $1.3 billion to buy several snack brands from Kellogg in 2019, Famous Amos, a nearly 50-year-old cookie, was one of the biggest brands.

But the chocolate chip cookie offering fell on hard times: sales were declining, household penetration was stagnating, and repeat purchases were falling sharply. The brand had not benefited from advertising for over a decade.

“That’s why we had to do something,” Rachna Patel, vice president of marketing at Ferrero, recalled in an interview.

Research has shown that consumers, especially millennials, are moving away from dry packaged foods and instead purchasing cookies from the bakery, deli or nearby specialty stores because they are perceived to be fresher and contain better ingredients.

Patel said Ferrero decided to further enhance the Famous Amos brand by increasing the chocolate content, making the chip the main ingredient, and using Belgian chocolate. The new cookie, launched in 2021, fared better in taste tests than the original recipe.

Ferrero has also added more biscuit flavours to the Famous Amos brand through its Wonders From the World line – Filipino coconut and white chocolate chips, Mediterranean hazelnut and chocolate chips and British salted caramel and chocolate chips – to cater to the interest of millennials who have a strong international palate.

The places where the cookies were sold in supermarkets also changed. Famous Amos no longer competed with brands like Oreo and Keebler, but instead entered into direct competition with other premium brands like Tate’s and Pepperidge Farm.

But Ferrero found that despite these changes, repeat purchase rates “slowed down” after an initial increase and sales “struggled” to surpass the old formula, Patel said. The company found that while many people liked the product, it cost more than they were willing to pay. A 7-ounce bag of Famous Amos Chocolate Chip Cookies, for example, cost $7.99 at Walgreens. Other consumers clamored for the original variety on social media.

Ferrero knew it had to act or risk damaging the brand’s value in the long term.

“We went back to the drawing board and started again,” recalls Patel.

Ferrero has decided to stop production of its “Wonders From the World” product line, which will be discontinued this year. The company has also returned to the original recipe of its legendary chocolate chip cookies and launched a sealable stand-up pouch for the first time, meeting customers’ need for freshness.

In addition, Ferrero increased the amount of cookies in the bag from 7 ounces to 9 ounces while lowering the price to $4.99 – moves that increased the cookie’s value with consumers and helped differentiate it from other food offerings that were more expensive. The product’s points of sale also changed again, with retailers again placing it alongside Oreo and other so-called everyday cookies.

The updated Famous Amos cookie shipped last November.

So far, it has been apparent that the changes have been well received by consumers. Since the relaunch, the repeat rate has increased by 5%. At some retailers, Famous Amos sales have reached or exceeded what the cookie was selling at five years ago when Ferrero bought it. “It’s doing phenomenal,” Patel said.

Still, the misstep has provided Ferrero with some valuable lessons. “There were things that needed to be corrected with Famous Amos,” Patel said, pointing to the company’s previous experience in elevating other brands such as Butterfinger in its portfolio. “We decided to fix the product rather than launch a branding campaign behind it, which might have been enough.”

After successfully reviving Famous Amos, Ferrero is now looking to the future of the brand – but this time more cautiously. A marketing campaign is planned for early next year that will promote the biscuit’s authenticity, history and homemade recipe.

Ferrero also plans to launch new products.