There's a big Girl Scout cookie shortage, and the group is frustrated with its main baker
- The Girl Scouts are frustrated over production problems at their main baking partner, Little Brownie Bakers, which is owned by Italian confection maker Ferrero.
- The baker has struggled to keep pace with cookie demand due to supply chain issues, labor shortages and weather-related power outages.
- The inventory woes have led to sagging sales for local Girl Scout troops.
This is the way the Girl Scout cookie crumbles.
Amid widespread cookie shortages, the Girl Scouts of the USA said they are "keeping all options open" as frustrations mount with one of their baking partners, Little Brownie Bakers, which is owned by Italian confection giant Ferrero.
Little Brownie Bakers, or LBB, notified the Girl Scouts on Monday morning that weather-induced power outages at their Louisville, Kentucky, factory, halted cookie production for the weekend of March 5, setting inventory even further back.
The power outages come amid a series of production delays and problems that LBB has cited to the Girl Scouts since January, the beginning of the selling season, according to a person familiar with the matter. In an email obtained by CNBC, Girl Scout executives told local troop leaders that they expected their baking partners to be "more ahead of demand" than LBB has been so far.
The inventory woes have caused a shortage of some cookie flavors that have sent Girl Scout cookie resale prices skyrocketing. Boxes of the newest, limited-edition flavor, Raspberry Rally, are being sold on eBay for $35. Boxes of Girl Scout cookies typically go for $5 a pop.
Little Brownie Bakers has also said that mechanical issues have gotten in the way of production of Samoas, the popular caramel-coconut cookie. This is the third year in a row that the baker has struggled to keep up with cookie production, said the person, who is not permitted to speak about the matter publicly.
"We are extremely disappointed that LBB is again having challenges with managing their production," a Girl Scouts spokesperson told CNBC. "We will address these issues with our baker partner in the future and we are keeping all options open to do right by our girls."
As of this week, roughly 75% of local Girl Scout troops are supplied by LBB and as a result, have not been able to meet their cookie-selling sales goals, which are the largest funding driver for the troops. The other 25% of Girl Scout councils are supplied by ABC Bakers, a smaller baking company that the Girl Scouts say has not had the same production issues as LBB.
To be sure, LBB has shipped more than 84 million packages to local troops and produced more Girl Scout cookies than it had this time last year, said a spokesperson for Ferrero, which makes the Ferrero Rocher chocolate and hazelnut treats.
"Global supply chain issues, local labor shortages, and even unforeseen severe weather have all impacted the selling season, but Little Brownie Bakers is on track to fulfill initial orders," Ferrero told CNBC.
In the meantime, Ferrero said that "teams in our bakery have been working overtime" to ensure that initial Girl Scout cookie orders get fulfilled.
For the rest of the selling season, Thin Mints, Adventurefuls and S'mores are the only remaining cookie flavors available for online purchase from some Girl Scout troops in states such as New York, New Jersey, Georgia, Alabama, Oregon and others. Orders that have already been placed will not be impacted, and customers in the affected areas can still purchase the other flavors in person at local Girl Scout cookie-selling booths.
Ferrero, also known for brands like Nutella and Kinder Bueno, has been on a mission to grow over the past year. In November, it broke ground on a $214 million expansion of its Bloomington, Illinois, manufacturing plant in order to produce Kinder Bueno chocolate in North America for the first time. The company said the Kinder Bueno project led to the creation of 200 new jobs in Bloomington.
In December, it agreed to buy ice cream giant Wells Enterprises, which would widen its North American footprint.