After six years under Krispy Kreme ownership, Philadelphia-based Insomnia Cookies is starting over with new owners. While Krispy Kreme aims to focus full-time on doughnuts, Insomnia Cookies hopes that its new owners, Verlinvest and Mistral Equity Partners, will help grow the 20-year-old brand to 1,800 stores in a decade -- more than six times the brand’s current portfolio of 295 stores, which are located mainly in urban markets and near college campuses.
Over the past six years, the dessert and indulgence landscape has changed, and has become one of the most competitive categories in foodservice to date, with oversized cookie concepts (led by Crumbl), doughnuts, and cakes leading the way with customers and franchisees who appreciate the low cost of operations. Under Krispy Kreme’s leadership, Insomnia Cookies more than doubled its footprint, and is the second-fastest growing dessert concept, after Crumbl, boasting nearly 18% sales growth and just under 15% unit growth in 2023, according to recent Technomic data.
“I've watched so many indulgence brands come and go over the last 20 years, from frozen yogurt to cupcakes and other dessert fads,” Seth Berkowitz, cofounder and CEO of Insomnia Cookies, said. “What makes Insomnia both unique and enduring is the community. It’s a late-night craveable dessert that's delivered to your door incredibly quickly…. I don't like to speak poorly of the rest of the industry, but [many other cookies out there] are heavily caloric, and they feel more like a cupcake in my head than that classic chocolate chip cookie.”
Part of the growth in the dessert category can be attributed to the rise of the social media-friendly indulgence. Crumbl, Dirty Dough, Chip City, and other similar cookie concepts bake softball-sized cookies filled or topped with colorful and creative confections, with a menu of rotating flavors. Insomnia Cookies, meanwhile, doesn’t have a rotating weekly menu and its cookies are both visually much smaller than many other competitors, while leaning into classic cookie flavors like Chocolate Chunk, M&Ms, and Snickerdoodle.
Given the current trend of over-the-top desserts, baking classic cookies each day can be a differentiator, but Berkowitz said it does make marketing campaigns harder. When you’re changing flavors every week and posting slow-motion videos to social media of influencers breaking apart the latest cookie creation, it’s a built-in marketing strategy.
“We are a classics brand, and that can hold for a while, but you need to create engagement around it and remind people why they love you,” Berkowitz said. “People always go back to our chocolate chunk, which is such a huge seller for us… We need to create those engagement moments to make sure everyone's thinking about us. People order Insomnia, share a 12-pack with their friends and enjoy it, but we just want to remind them to do it a little more often.”
This is where marketing partnerships come into play. Insomnia Cookies recently did campaigns with Final Fantasy, to celebrate the launch of the franchise’s most recent videogame release, a partnership with Borderlands (the movie based on the videogame franchise), and even a marketing campaign with the Bachelorette, which just started its 21st season on ABC. These marketing partnerships with pop culture moments and franchises are one way to keep Insomnia Cookies top of mind for consumers, but it’s not the only way to improve engagement, Berkowitz said.
“There are two key forms of engagement with insomniacs: one through optimizing the warm, delicious and fast cookie delivery,” he said. “And the second through investing further in our cookie innovation. We want to simplify our menu but accentuate and create some really strong LTOs… We’ve been testing lots of different menu ideas at various stores, but ultimately, sticking to the classics works, as well as delivering service faster than ever.”
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