Lost Luggage Finders and Other Invisible labor
January 29, 2024Why There’s No Such Thing As a Free Ad
January 31, 2024There is more than one Hundred Years’ War
England and France fought the first one from 1337 to 1453.
During 1912, another one began.
It was between Oreo and Hydrox.
The Cookie Wars
The cookie war started with two brothers. At first, together, they ran a baking business in Kansas City, Missouri. Then, the brother with the financial talent and ambition, left, grew the company through acquisitions and soon had the country’s second largest bakery. Reputedly exhausted and sick, he left to recuperate in Europe and his brother and another past associate, Adolphus Green, continued his mergers and acquisitions, and named the company the National Biscuit Company (aka Nabisco).
Responding, a newly invigorated Jacob returned to the U.S. and formed what became Sunshine Biscuits. With the National Biscuit Company #1, his bakery became #2. The secret of Jacob’s success was two chocolate biscuits that had a vanilla creme center. And yes, he called it Hydrox. The year was 1908.
The Hydrox was known for its purity:
In 1912, the hundred year cookie war began when the National Biscuit Company created a copycat. Called Oreo, it was less distinctive and cheaper than its “fraternal” twin, the Hydrox. Although a better tasting Hydrox cookie initially took the lead, its name and the smaller size of its maker held it back. The name sounded too much like a household cleaner while the company, much smaller than National Biscuit, had less marketing power.
A 1922 Hydrox ad (from Atlas Obscura):
Fast forwarding through the 20th century, Oreo nudged Hydrox into the background. By 1998, Oreo sales were at the $348 million market while Hydrox was a pitiful $16 million. Meanwhile, Sunshine was acquired by Keebler that then was purchased by Kellogg.
Although Kellogg discontinued Hydrox in 2003, it was not the end. Leaf Brands bought the unused trademark and tried unsuccessfully to resuscitate Hydrox.
Our Bottom Line: Monopolistic Competition
As economists, we can say that cookies compete in monopolistically competitive markets that have many firms and relatively easy entry. However, the market structure name says it all. While we have competition among many firms, there also has to be a unique characteristic that attracts consumers. With Hydrox and Oreo, we certainly know the difference
You can see below that there are four basic market structures. As firms move to the right along the continuum, their pricing power and size increase. As the 20th century unfolded, Nabisco migrated to the right on our market structure continuum as it gained market power. Still it competes against countless kinds of cookies:
Since I always thought Hydrox was much better, I am sad that Oreo won the 100 years war.
My sources and more: Thanks again to The Hustle for alerting me to the Oreo Hydrox cookie war. From there the possibilities included Mashed, and Serious Eats but the best was Atlas Obscura. We should note that although our story focuses on the two brothers, Adolphus Green and William Moore are usually associated with Nabisco’s earliest years. Also, I depended on The Hustle and Atlas Obscura for my facts when they differed elsewhere.
2 Comments
“Leaf Brands bought the unused trademark and tried unsuccessfully to resuscitate Hydrox.” Seriously? We are #5 on Amazon for ALL sandwich cookie options, including different size packages. We are also selling out at all locations across the US and you are telling your readers we are unsuccessful? While we are not even close to Oreo numbers, we believe we have been VERY successful!
As a Hydrox cookie lover, I am delighted to hear your response. When I tried to buy Hydrox on Amazon, the “Master Pack of 6” was unavailable with a message that said, “We don’t know when or if this product will be back in stock.” Then, I tried Walmart with no success too. My disappointing search was the reason that I said Hydrox lost the cookie war.