The Oreo, consistently America’s top-selling cookie, is the topping on a new Domino’s dessert pizza, a main ingredient on the dessert menus of the country’s top-three burger chains, and a staple at the top-three frozen dessert restaurants in America. And McDonald’s solely credits an Oreo caramel sundae for increasing same-store sales in Japan in August 2007.
Restaurants say the choice to add the cream-filled cookie to their dessert menu is pretty simple: it’s got huge name recognition with the public and a solid track record with companies that have used it for years.
“Oreo is our No. 1 flavor,’’ says Aric Nissen, vice president of brand marketing for Dairy Queen. To wit, when Dairy Queen promoted an Oreo Mint Blizzard in March 2007 same-stores sales shot up 33 percent. Dairy Queen has used Oreos in its ice cream for more than 20 years.
Ashley Reed Woodruff, an analyst who follows several restaurants for Friedman, Billings, Ramsey & Co., says Oreo is uniquely suited for quick-service rather than fine-dining concepts. “It seems like the benefit to co-branding with Oreo is to drive customers into the restaurants. Fine dining doesn’t rely on TV ads promoting desserts to get customers into restaurants,” Woodruff explains.
In recent months Domino’s and Baskin Robbins launched major ad campaigns featuring new twists on the Oreo. Baskin Robbins is mixing it in 10 treats, including coffee-flavored Jamoca Oreo ice cream, while Domino’s is using the cookie as a topping on its new dessert pizza.
“The benefit to the restaurant is that the brand is much bigger than the restaurants,” says Harry Balzer, vice president of The NPD Group, in explanation of why the Oreo seems to be everywhere these days.
Dairy Queen takes credit for coming up with the Oreo/ice cream pairing after individual franchisees started grinding up the cookie and mixing it into the company’s trademark Blizzard dessert in the 1980s. “Initially, the mix-ins were not branded,’’ Nissen says.
And Nabisco (now a Kraft brand) wasn’t interested in being the cookie mix-in of choice, Nissen says. Dairy Queen used a competing brand of chocolate sandwich cookie.
Eventually, Nabisco got on board. While Dairy Queen initially allowed franchisees to use generic versions of the Oreos, for the last several years it has insisted on the real thing—going so far as to sue franchisees who use faux Oreos.
Kraft now has a national sales staff dedicated to visiting the top 200 quick-serve restaurants offering up expertise in recipe development and three custom “grinds” of Oreo: a fine grind for milkshakes; a medium grind, ideal for mix-ins; and the large grind used by Domino’s. The company also offers an Oreo piecrust. Kraft touts the Oreo’s ability to drive the afternoon snack daypart as a major selling point. “Oreo really plays into that,’’ says Nate Hedtke, Oreo’s category business director.
Companies don’t pay for the Oreo name. They pay for the product. However, if a concept wants to tout that it’s serving ‘America’s Favorite Cookie,’ licensing makes that possible. Both sides approve advertising under that arrangement. Companies can buy the product without a licensing agreement, but are restricted in using the name in advertising. Chick-Fil-A, for instance, offers a cookies and cream shake that lists Oreo in the nutritional fine print, but the restaurants doesn’t use the Oreo name.