Oreo, the chocolate and vanilla cream cookie brand juggernaut, is now also available in a carrot cake flavor. And a pistachio thin Oreo. And a birthday cake flavor and a thin salted caramel creme mutation. Did I mention the coconut fudge dipped creme? There are more than 25 different flavors and forms in all.
Oreo, the most popular cookie in the world, is a mess.
The chaos certainly begs the question, after 10 years of line extensions, “What is an Oreo?” It’s certainly not the 100-year-old brand icon it once was.
Further, what is the long-term prognosis for any brand franchise subjected to multiple brand extensions? And what is the Oreo brand now worth?
At a time when Kraft Heinz is taking a $15 billion write-down on their brand equities, this isn’t just an idle exercise; Mondelēz and other CPG manufacturers are likely soon to follow. And when that happens, there will be much hand-wringing about zero-based budgeting and the cost-cutting it requires.
Far less likely to be commented upon are the brand management’s responses to the cost-cutting and the self-inflicted wounds from ill-suited brand line extensions.
We all have our own nuanced definitions of a brand and brand equity, but almost everyone agrees that brand equity is the sum of every consumer’s past interactions, current perceptions and future expectations of that brand. And we can agree there is nothing about a Gingerbread Oreo that enhances the long-term Oreo’s brand.
It’s hard to overstate the power of the original Oreo brand. With brand equity built over the span of 100 years, Oreos were part of growing up and being a kid. American consumers of every age felt an astonishing warmth and affection for the product.
If I seem unusually confident in my assessment, that’s because I am. Full disclosure: Years ago, I worked in new cookie products for Oreo’s competitor, Keebler. Add me to the long line of new product wizards who failed to dent the Oreo’s brand armor. In focus groups, we tried new shapes, textures, flavors, fillings, bonus packs, snack sizes, hot pricing and outrageous promotions. Not only were Oreos’ users unimpressed, they were actually often irritated with us for even trying. And if a Keebler recipe beat Oreos in blind taste tests, consumers would actually have an alibi for their icon: “The Oreos must not have been fresh.” Oreos were the perfect cookie and could not be improved upon on by man or Elf.
Contrast the Oreo brand with the product miasma on the shelf now. There’s actually a Wikipedia page dedicated to listing the dozens of Oreo varieties. Everything from Swedish Fish Oreos to candy corn Oreos in the U.S. to hot chicken wing Oreos and wasabi Oreos in China. When consumers today refer to the original Oreo cookie, they call them the “real ones.”
Brand equity is like a rubber band: It can be stretched, but like a rubber band, if the brand’s equity is stretched too far too often and across too many items in too many categories, it snaps and ceases to have value. In addition to 25 different Oreo products in the cookie section, I counted at least 12 Oreos branded or licensed SKUs in different sections throughout the store. The greatest American cookie brand icon is broken.
Consumers are actually making fun of Oreos in chatrooms. In eroding the Oreo brand and puncturing its invincibility, Mondelēz is accomplishing what its competitors could not.
This isn’t schadenfreude from a former Keebler Elf. Instead, Oreos’ descent from brand icon to brand blob is a reminder of how quickly a management team can squander 100 years of brand equity. Watermelon Oreos are exactly what they appear to be: a short-term volume grab, introduced with no concern for the long-term damage to a brand institution. Sadly, this brand icon debasing activity is not confined to the cookie aisle—just look at the bewildering array of loosely connected Cheerios SKUs or Coca Cola line extensions.
By: Tom Hinkes