Inside the Girls Scouts' New Cookie Strategy

By Derek Thompson

This year, Girl Scouts is rolling out a new pilot program that will try to increase profits by doing the unthinkable: slashing its cookie offerings.

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It's Girl Scout cookie season, and some of those bright shining faces in brown sashes and green vests are hawking more than Thin Mints and Samoas. They're selling a new business plan.

This year, Girl Scouts is rolling out a pilot program that will try to increase profits by doing the unthinkable: cutting its cookie offerings to a slim six. Don't worry if your mouth waters for Thin Mints, Samoas, Tagalongs, Trefoils, Do-Si-Dos, or Lemon Chalet Cremes. Those flavors survived the girls' axe. Other flavors like Dulce de Leche and Thank U Berry Much weren't so lucky.

The great cookie cutting of 2011 is part of an ongoing "efficiency" campaign at Girl Scouts to consolidate membership and boost profit at a time when youth organizations are struggling to keep all their girls and sell some of their cookies.

Girl Scouts is all about teaching leadership, confidence, and community. It's also about teaching salesmanship, bottom lines, and supply chains.

"For decades, councils were left with large inventories for cookies outside the most popular five or six," said Amanda Hamaker, manager of product sales. "Councils saw this pilot as a way to experiment with their consumers to see if they could sell the same number of cookies with fewer varieties."

Some media reports have tried to link the cookie cut to the credit crunch, arguing that Girl Scouts overextended their offering of sweets during the boom times only to be crushed by the recession. That's not exactly right. Girl Scouts faced a slow erosion predating the housing bubble, like many youth organizations competing against online communites. In some ways, Facebook has replaced the campfire as a place to gather around with your best buds and share your feelings.

Girl scout membership fell 8 percent between 2005 and 2010. But cookie sales have held steady at about 200 million boxes a year for the last decade. (To see more details about the Girl Scout cookie business and strategies to improve it, click through excerpts of a business summary obtained by The Atlantic.)


BIG SMILES AND BOTTOM LINES

Girl Scouts is about teaching leadership, confidence, and community. It's also about teaching salesmanship, bottom lines, and supply chains. Hawking deserts is a $700 million business, and cookies account for two-thirds of the organization's budget.

Executives can be surprisingly direct about the business side of Girl Scout cookies. "We teach the girls about supply chain issues and the need for efficiencies," said Denise Pesich, vice president of communications. If that sounds like a first-year business school lecture, then don't be surprised that the organization uses professional sales consultants to teach their pre-teens how to mix precious smiles with canny nudging. Suggested closing lines include the emotionally priming "What's your favorite kind of cookie?" and the pleading appeal, "It's ooooonly four dollars!"

Cookies aren't the organization's first foray into the bold world of business efficiencies. In 2004, Girl Scouts hired a Columbia Business School instructor to grow membership and revenue. In the last six years, Girl Scouts restructured more than 300 councils, or independent groups, into just over 100 to cut costs and standardize the girls' experience across the country.

When flour and transportation costs rose in the 2000s, Girl Scouts protected their cookie box prices by making smaller cookies, putting fewer in a pack, and making other changes to make the boxes lighter. One of the two cookie suppliers ABC Bakers, which refused to participate in this year's six-cookie program, is piloting its own packaging overhaul described in the above gallery.

"Since 1917, we've had a laser focus on goal-setting, decision-making, money-making, business ethics," Pesich said. "I've heard people reflect as adults that Girl Scouts was their first foray into business."

Is it any wonder?


Photo credit: maritandtoomashinnosaar/Flickr

This article available online at:

http://www.theatlantic.com/business/archive/2011/02/inside-the-girls-scouts-new-cookie-strategy/70793/