The Business of Cookies: Trends, Challenges, and the Rise of Crumbl

Why Crumbl Cookies Can't Survive

By Joseph Provence, a news contributor who writes about technology, small business, SEO, and e-commerce. 

Jan 8, 2025, 10:53 AM MST

Every decade brings new dessert trends that captivate consumers and dominate the market. In the 2000s, cupcakes and frozen yogurt reigned supreme. The 2010s saw the rise of unicorn-themed drinks, monster milkshakes, edible cookie dough, and donuts. Now, in the 2020s, oversized, heavily topped cookies with extravagant flavors are the latest craze. These decadent treats, often packing over 800 calories and twice the sugar of a soda can, have taken over social media, drawing millions of fans.

In a rapidly evolving dessert landscape, how did cookies become the treat of the decade? And will the trend endure? To answer these questions, we examine the business strategies, market trends, and challenges faced by the key players in this space.

The Dessert Boom-and-Bust Cycle

The evolution of dessert trends reveals a predictable business cycle. Each fad begins with a pioneer—Sprinkles for cupcakes, Pinkberry for frozen yogurt, and Crumbl for cookies. As demand surges, competitors flood the market, replicating the trend to capitalize on its popularity. Eventually, the market saturates, consumer interest wanes, and many players exit.

The cookie industry is currently at the peak of its boom. Crumbl, the market leader, has grown at an unprecedented pace, scaling from a single store to over 1,000 locations in just four years. However, history suggests this growth may not last. The dessert market is volatile, and the success of Crumbl and its competitors depends on their ability to adapt and innovate.

A Look Back: The Legacy of Mrs. Fields

Mrs. Fields revolutionized the cookie business in the 1970s, transforming the humble cookie into a premium product. By baking cookies on-site and serving them warm, Mrs. Fields created a brand synonymous with quality. The company’s low operating costs and simple production methods enabled rapid expansion, growing to 780 stores in just six years. At its peak, Mrs. Fields generated over $300 million in revenue annually.

However, this success came at a cost. The 1990s recession hit hard, and the lack of franchising exposed Mrs. Fields to significant financial risk. Saddled with debt, the company was forced to downsize. Today, Mrs. Fields operates primarily through franchises, focusing on selling pre-packaged goods and relying on online gift sales to stay afloat.

Insomnia and Levain: Different Approaches

Insomnia Cookies, founded in the 2000s, took a different approach. Targeting college students, Insomnia prioritized convenience over quality, delivering cookies late at night. By offering a streamlined menu and extended hours, Insomnia built a loyal customer base. Despite its success, Insomnia has been slow to expand, limiting its growth potential. As of 2023, the chain operates around 225 locations, with average store revenues of $800,000 annually.

Levain Bakery, on the other hand, transformed cookies into a luxury product. By introducing oversized, six-ounce cookies priced at $6 each, Levain achieved pricing power and grossed $1.2 million per store on average. However, its focus on maintaining a premium brand has slowed its expansion. As of 2023, Levain operates just 13 locations, primarily in metropolitan areas.

Crumbl’s Formula for Success

Crumbl entered the market in 2017, learning from its predecessors. Combining elements of Levain’s premium product and Insomnia’s accessibility, Crumbl introduced oversized, photogenic cookies with weekly rotating flavors. This approach, inspired by the fashion industry’s focus on scarcity, created a sense of urgency and repeat customer engagement.

Crumbl’s aggressive franchising strategy has been a key driver of its growth. By 2023, the average Crumbl franchise grossed $1.1 million annually, though recent declines in margins and profits suggest potential challenges ahead. Corporate profits, however, remain strong, driven by franchise fees, ingredient sales, and royalties. In 2022 alone, Crumbl’s corporate revenue exceeded $200 million, up from $53 million in 2019.

The Role of Social Media

Social media has played a pivotal role in Crumbl’s success. With over 6 million followers on TikTok and 3 million on Instagram, Crumbl has mastered the art of visual marketing. Their weekly flavor reveals generate millions of views, creating a buzz that drives foot traffic and online orders. This strategy has not only increased brand visibility but also fostered a sense of community among customers who eagerly share their experiences online.

Other brands have followed suit, leveraging platforms like TikTok to showcase their products. Dirty Dough, a smaller competitor, gained traction by highlighting its stuffed cookies in viral videos. Similarly, Chip City, another up-and-coming chain, uses social media to emphasize its hand-crafted approach and locally sourced ingredients.

Challenges in the Cookie Business

Despite its rapid growth, the cookie industry faces significant challenges. Rising ingredient costs, labor shortages, and competition are putting pressure on margins. For instance, Crumbl’s ingredient costs increased by 20% in 2023 due to supply chain disruptions, prompting the company to raise prices.

Legal battles also threaten the industry. Crumbl has filed lawsuits against smaller competitors like Dirty Dough and Crave Cookies, accusing them of copying its business model and branding. While these lawsuits aim to protect Crumbl’s market share, they highlight the intense competition in the sector.

Moreover, consumer preferences are evolving. Health-conscious trends and economic uncertainties may reduce demand for indulgent desserts. A 2023 survey revealed that 38% of consumers are actively seeking lower-calorie dessert options, posing a challenge for companies like Crumbl that rely on high-calorie products.

Independent Shops and Innovation

Amidst the corporate giants, independent cookie shops continue to thrive by offering unique products and personalized customer experiences. For example, Cookie Good in Santa Monica experiments with unconventional flavors like “Cereal Milk” and “Elvis” (banana, peanut butter, and bacon). These creative offerings attract a niche audience, allowing small businesses to differentiate themselves.

Additionally, independent shops are embracing sustainable practices. Many prioritize locally sourced ingredients, recyclable packaging, and reduced food waste. These efforts align with growing consumer demand for environmentally conscious brands, offering a competitive edge in a crowded market.

Lessons from the Cookie Boom

The cookie business illustrates the challenges of balancing growth with sustainability. While Crumbl’s rise is impressive, its reliance on aggressive franchising and corporate profits raises questions about its long-term viability. For independent shops, innovation and community engagement remain critical to surviving in a volatile market.

History suggests that no dessert trend lasts forever. However, the cookie industry’s ability to adapt and evolve will determine its future. Whether through viral marketing, premium products, or sustainable practices, the players that prioritize customer satisfaction and innovation will endure.

The Future of Cookies

As the dessert industry evolves, one thing is clear: consumer preferences may shift, but the appetite for indulgence is here to stay. Whether through a viral sensation or a neighborhood bakery, the business of cookies continues to adapt, proving that even in a crowded market, there’s always room for something sweet.

Key Statistics at a Glance:

• Crumbl has grown to over 1,000 locations since its founding in 2017.

• The average Crumbl franchise grosses $1.1 million annually.

• Levain Bakery grosses $1.2 million per store on average but operates only 13 locations.

• Insomnia Cookies generates $800,000 in revenue per store annually with about 225 locations.

• Mrs. Fields peaked with 780 stores and $300 million in revenue annually.

• Crumbl’s corporate revenue exceeded $200 million in 2022.

• A 2023 survey found 38% of consumers are seeking lower-calorie dessert options.

• Crumbl’s ingredient costs rose by 20% in 2023, illustrating broader supply chain challenges.

• These figures highlight the dynamic nature of the cookie business and underscore the importance of innovation and adaptability in sustaining growth.