Lily’s Launches Cookies, Reboots Nut Butter Cups

Despite new challenges due to an uncertain business climate, things are looking sweet for low-sugar chocolate brand Lily’s Sweets. Driven by the success of its chocolate chips, which account for 30% of sales, the brand launched its first snack item — a low-sugar chocolate chip cookie — into stores last week.

The cookies will launch in 30 Northeast region Costco stores in Maryland, Virginia and Pennsylvania. Each 16 oz. bag retails for $9.99 and contains roughly 51 crispy cookies.

Lily’s CEO Jane Miller said that the company was inspired to launch a snack product after consumer research showed that 73% of consumers purchase the brand’s chocolate chips to make cookies (in second place, she noted, 16% of consumers eat the chips by themselves).

The new product helps Lily’s consumers take sugar out of the cookie part of the chocolate chip cookie as well, Miller said. Lily’s uses a blend of sweeteners in its cookies including erythritol, stevia and chicory root fiber in its cookies, which have 100 calories and 1 gram of sugar per serving of three cookies.

“Our thought was that it would be a great way to offer the Lily’s experience,” Miller said. “But we wanted to take it one step further.”

There have been steps taken backward as well: launch partner Costco’s robust sampling program is on the shelf during the ongoing COVID-19 crisis, and Lily’s has had to support the launch through digital marketing, instead. The company is working to secure end caps in stores with the hopes of capturing the attention of shoppers who do venture into the store, Miller said.

The company will also likely begin selling the cookies on its new ecommerce website within the next month. Unlike its chocolate products, the hope is that the cookies will also offer Lily’s a product that doesn’t need temperature controlled shipping in the summer months. It’s also a possible way around an Amazon rule that the retailer doesn’t provide fulfillment for most chocolate products from May to October.

Miller herself is familiar with the crispy cookie business, having served as CEO of HannahMax Cookie Chips from December 2016 through January 2018.

“What I learned [from that] was how crowded the cookie category is,” Miller said. “You really need to have a big point of differentiation to be successful. With Cookie Chips we had an amazing product but there were several other products that were the same.”

When VMG invested in Lily’s in 2018, the company only had a line of chocolate bars and chips. Since then, under Miller, Lily’s has diversified, expanding into confection with chocolate covered nuts, caramels, popcorn, and chocolate peanut butter cups. The company first went into candy because research showed chocolate bar eaters also consume other chocolate confections across the board, Miller said.

However, that doesn’t mean there hasn’t been a learning curve. The company is also currently releasing a new, creamier version of its peanut butter cups, which have been picked up by Kroger, Walmart, BJ’s, CVS and The Vitamin Shoppe. The cups’ packaging now sports a callout about the new filling and as rollout progresses Lily’s will support with digital messaging to drive trial.

“Besides making cookies the number one thing [consumers] were making using our chocolate was peanut butter cups and that seemed like a really hard thing to make,” Miller said. “[But] what we learned from [this experience] is that we will not introduce anything unless you eat it and say ‘this is a wow’ and not ‘this is good for a sugar-free item.’”

Moving forward, Miller said the company will evaluate how the cookies perform before pushing further into snacks. Next steps will be a wider Costco rollout and then in 2021, if all goes according to plan, a push into broader retail — which would require building out three to five SKUs of cookies.

“What we’ve really cracked the code on is a product that tastes delicious straight out of the bag,” Miller said.