Freakonomics Radio - The Economics of Everyday Things: Girl Scout Cookies

Episode Date: January 30, 2023

How does America's cutest sales force get billions of Thin Mints, Samoas, and Tagalongs into our hands every year? Zachary Crockett finds out in the second episode of our newest podcast, The Economics of Everyday Things.

Hey there, podcast listeners. You are about to hear the second episode of the newest show from the Freakonomics Radio Network. It is called The Economics of Everyday Things, and it's hosted by Zachary Crockett. We hope to bring you many more of these episodes in the future. If you want to make sure you never miss one, just search for Economics of Everyday Things in your podcast player and hit follow or subscribe right now. As always, thanks for listening. And here is Zachary. Every year between January and April, the troops mobilize on American soil. They march door to door wearing green and brown vests.

They set up booths at schools, small businesses, supermarket parking lots, and they arm themselves with sales pitches that even the coldest hearts among us cannot deny. My name's Isla and I'm seven years old. Isla spoke with our producer, Sarah Lilly. There would be like samosas. It looked like a tiny donut and they have chocolates covered over it and they have coconut on top. My second favorite is Thin Mints. How would you sell me a cookie? I would say like, do you want this one or this one? And then you would choose.

For the Freakonomics Radio Network, this is the economics of everyday things. I'm Zachary Crockett. Today, Girl Scout cookies. The salespeople may be small, but Girl Scout cookies are a big business. Every year, the Girl Scouts of the United States of America, that's their official name, collectively sell around 200 million boxes of cookies. That works out to one box for every adult in the country. And it all happens within a sales season that lasts just a couple months. The Girl Scouts have ordained two corporate bakeries to make all those

cookies. ABC Bakers, part of the conglomerate that owns Wonder Bread, and Little Brownie Bakers, a subsidiary of Keebler. During Girl Scout cookie season, other cookie manufacturers often dial back their advertising and lower their sales expectations. Because, as one industry analyst put it, there is no upside to marketing against the Girl Scouts. Do you like selling cookies? Yes. All those boxes of cookies bring in upwards of $800 million per year. So where does all that money go? Well, the organization is structured in tiers.

You've got the national headquarters, the regional councils, then the troops of Girl Scouts. Let's say you plunk down $5 for a box of Thin Mints. That's the Girl Scouts best-selling cookie. About $1.50 goes to the bakery, which kicks back a royalty to the National Girl Scouts organization to license the trademarks. The other $3.50 stays local. It's split between the regional council and the troop you bought it from. That money is critical to the local troops. The cookie season provides most of their funding for the entire year. And that's one reason Girl Scout Cookies have one of America's largest and most enthusiastic sales forces. It's like Christmas, just the excitement and getting ready for it.

That's Katie Francis. She's 21 now, so her years of selling cookies are behind her. But she's still a legend in the community. I hold the national career record for Girl Scout cookie sales. Katie first started selling cookies back in 2011 in Oklahoma City. Like many young Scouts, she was enticed by the prizes. The council incentivizes girls to sell by doing prizes at different levels. So like if you sell 50 boxes, you might get a journal or you sell 100 boxes and you get a stuffed animal. And then as it gets up, it gets more and more exciting.

The average Girl Scout sells around 200 boxes per season, enough to earn a sweet fanny pack or a t-shirt. But Katie had her eyes on a much bigger prize offered by her regional council in Oklahoma, a college scholarship for the top seller in the state. I sold 2,004 boxes my very first year. Katie was 10 years old then. That's around the age most scouts start selling cookies. I wasn't aiming to be a high seller. I enjoyed selling cookies quite a bit, and it worked out that way. The next year, I ended up selling 7,482 boxes, which broke the state record. And then after that, I was really inspired to just see how much further I could go. In 2014, Katie broke the single-season national record of 18,000 boxes, a mark set in 1986. And she was just getting started.

After I broke the national record for a couple years, I set my sights on breaking the career record. And even after I did that, ended up with my own personal career record of 180,000 boxes. Now, Girl Scouts have two obvious advantages when it comes to sales. They're selling for a good cause and, well, they're cute. But moving 180,000 boxes, that requires a true dedication to the craft. At the beginning of the cookie sale every single year, my mom and I would create a spreadsheet with my goal and we would break down how many I would need to sell each week, each day, and like how much I would need to average out hourly in order to reach my goals.

So on an average day after school, I might go to an office building to start with. Then as that peters out, I'll go to businesses and sell business to business. And then maybe like after dinner time, I'll go to restaurants and sell to waitstaff. Katie also enjoyed a special advantage. My mom ended up being the cookie mom. Is that a formal title? Uh, cookie mom? Yeah. The cookie parent is in charge of ordering cookies for the entire troop for the initial order. So my mom would always end up ordering like 10,000 boxes just to start with. Was your house just like full of cookies all the time? Yeah, we stored them all in the garage. And yeah, they were just stacks start with. Was your house just like full of cookies all the time? Yeah, we stored them all in the garage. And yeah, they were just stacks and stacks. We couldn't fit anything else in there.

Clearly, cookie parents are a key ingredient here. My name is Megan, and I'm the cookie mom of Troop 2201. Remember Isla, that adorable seven-year-old Girl Scout from the top of our episode? Megan Barris is her mom, and they live in Brooklyn, New York. She says that cookie season can sometimes get a little intense. There was definitely like some parent competitiveness maybe. Not competitive with each other,

but more like I want my kid to do the most. I want to do a table myself every weekend. I want them to be out there selling. So what does it take to move more cookies than any other scout in your troop? That's coming up. Back to Girl Scout cookies. Once upon a time, Girl Scouts almost exclusively sold cookies door to door. But over the years, they found that they made more sales by setting up a booth in a spot with a lot of pedestrian traffic. This sometimes led to parents jousting over the best spots. And many councils started to delegate booths through a lottery system.

Supermarket parking lots are prime real estate. I remember standing outside a Safeway in my neighborhood and just feeling so nervous. That's former Girl Scout Janelle Bittger. Just the idea of like, excuse me, to someone busily leaving and seeing people's eyes try to avoid your face, you know. I did not go into sales for a reason. Instead, Bittker became senior food editor at the San Francisco Chronicle, and she has reported on how technology has changed the way Girl Scouts sell cookies. For instance, in 2014, the Girl Scouts started accepting credit

cards using mobile card readers. That same year, the organization began selling cookies online. Scouts could create their own websites, upload video pitches, and send a link directly to friends and family. Traditionally, Girl Scout cookies are an IRL event, right? People are gathering at grocery stores or outside public transit, and they see the green booth, and there's a cute kid there, and they're like, oh, I'll buy some cookies today. But the pandemic added challenges to the cookie business. Fewer girls enrolled in the scouts. Supply chain problems and labor shortages also made it harder for the bakeries to produce cookies.

So in some areas, the Girl Scouts partnered with the food delivery app DoorDash. Troop members listed their cookie inventories on the app and set up distribution centers at local restaurants. DoorDash waived its usual fees and offered same-day delivery for $3.99. It was good for people who love tag-alongs, but some Girl Scout parents claimed it tilted the playing field. There was this mom who was tweeting about how frustrated she was that her eight-year-old daughter couldn't buy more cookies. There were just no more cookies left.

And then she went on DoorDash and she could find every single cookie and could get it on the same day. Certain troops whose parents had more money were able to spend thousands of dollars on all these cookies up front. And then DoorDash would send out these email blasts about how you couldn't get these cookies anywhere else. The families that could not afford to stockpile cookies and did not have access to DoorDash were left being sad in the rain. The DoorDash debate exposed what some might call the dark side of Girl Scout cookie sales.

At the start of the season, each Scout commits to selling a certain number of boxes. She gets to decide how many. The troop pays for those boxes up front, and then the Scout repays the troop with the money from her sales. But if you are a Girl Scout and you're like, I'm going to buy 500 boxes of cookies, that might be a little dangerous because maybe you can only sell 200 and then you're still on the hook for all those cookies. A few years ago, one local troop even threatened to sue the mother of a North Carolina scout who refused to pay for a few hundred boxes of unsold cookies. That's an unusual situation. Regional councils and local troops try their best to help out when cookies go unsold. Megan Barris, Isla's mom in Brooklyn, says that includes setting up local cookie hubs. If there's extra leftover,

we can do like a swap with these cookie hubs. We can submit saying like, hey, we have extra boxes of this and we can bring it back and then we don't get charged for it. So we're not paying for extra cookies that we don't use. Girl Scout cookies are a big business. And business, well, it can be tough. The harsh realities of cookie season, competition, technological disruption, supply chain issues, financial risk, they're all a part of modern commerce. But the scouts who stick with it learn the value of teamwork, goal setting, and persistence. They learn not to take no for an answer.

Just look at Katie Francis. She's now studying communications at the University of Pennsylvania. She says that at the end of the day, Thin Mints just might be a vessel for self-discovery. A lot of people think of it as just a snack, but it's like a really awesome opportunity to build business skills. And girls, as they get older, they can take more charge of their own cookie cell and start to learn how to be a business owner themselves. For the Economics of Everyday Things, I'm Zachary Krocker. This episode was produced by Sarah Lilly and mixed by Jeremy Johnston, with help from Greg Rippin and Emma Terrell.

Our executive team is Neil Karuth, Gabriel Roth, and Stephen Dubner. Hey there, it's me again, Stephen Dubner. And if you enjoyed this episode of the Economics of Everyday Things, let us know. Even if you didn't like it, let us know. We like feedback. Our email is radio at freakonomics.com. And remember to subscribe to the Economics of Everyday Things in your podcast app. I would think that selling cookies is a little scary. Like, I might be a little shy to sell cookies.

Do you ever feel that way? No. Not at all? No. No. The Freakonomics Radio Network. The hidden side of everything.