Black & White Cookie Co.'s New Plan to Roll In the Dough

NEW YORK ( MainStreet) -- What do the future of Brooklyn basketball and black and white cookies have in common?

If The Black & White Cookie Co. CEO Joshua Auerbach gets his way, patrons of Barclays Center in Brooklyn, N.Y. will be able to snack on a cookie from the company he founded as they watch the Brooklyn Nets tip off next season. It's a revised playbook for both NBA franchise and cookie entrepreneur that Auerbach hopes will lead to his company rolling in the dough as the Nets roll out their new home.
Lady Gaga-designed black and white cookies

Auerbach, 43, who calls himself the CookieMan, is still negotiating with the arena's owners, however it's this agreement that he hopes will -- finally -- solidify the future of his company.

Black and White Cookie has seen a few ups, but mostly downs, throughout the recession, even though it's clear that consumers love the idea of gourmet black and white cookies -- a popular dessert treat. The company's Twitter page has more than 18,000 followers, including celebrity gossiper Perez Hilton. That's pretty big validation of the market for his product, but it's a bigger testament to Auerbach's social media proficiency, particularly since the company is currently only selling cookies through QVC and all of his production is being outsourced.

As the economy gets back on track, Auerbach is trying to reposition the company for success.

Beginnings
An entrepreneur who grew up on Long Island, N.Y., Auerbach's friends and family were used to him brainstorming business ideas, most of which were nixed. In 2001, living in New York City and seeing the proliferation of niche restaurants and bakeries, he came up with the idea based on one of his favorite treats -- the concept of a bakery that sold customizable black and white cookies (the icing can be changed in color, design and flavor preferences). It seemed to get a lot of interest, he says.

With all the positive reinforcement, Auerbach immediately realized no one had seized that name for a web page and registered Blackandwhitecookies.com in 2001. (He picked up blackandwhitecookie.com just this year, he says.) But Auerbach didn't do much else until 2005 when the company's legal name was filed.

At first he tried to produce the cookies in New York City but encountered problems while using a shared kitchen. Auerbach realized they would have to make the cookies in their own facility but finding a space in New York City was nearly impossible because of the cost, he says. He decided to move the company to Binghamton, N.Y., where cost of labor and renting a space would be cheaper to set up his own manufacturing facility.

"That was a nightmare," he says. "Basically it's affordable for a reason -- because business was terrible. We moved our oven three times because of one bad lease after another."

Auerbach originally had a vision of both a retail store and offsite production. Because of the real estate troubles he was having, he abandoned the idea of a retail store and sold solely through the website.

In 2008, with new financing promises, he attempted a retail store again, this time opening a caf' in Corning, N.Y. But Auerbach opened his store just as the financial crisis hit and financing was quickly pulled off the table (even with revenue still increasing). He was forced to close the store and his facility in Binghamton in 2010.

Emphasize the Brand
"At the same time I knew the brand was still there. I continued to build brand value. It's the reason why we were able to convert this into a virtual operation," Auerbach says.

Since he no longer had any physical resources -- and frankly no working capital -- he put all of his emphasis into branding and networking to keep the concept visible, particularly on social media websites Twitter, Facebook, LinkedIn ( LNKD), and even through Pinterest.

Auerbach says he uses "pre-defined" searches looking for relative tweets and trends and other people just speaking in general about black and white cookies.

The efforts have been successful both on the consumer side and on the professional networking side. He now says there are "deep players" willing to take board positions.

The company has been holding on by working with several cookie manufacturers to sell a product on QVC. (Auerbach says he is currently not making a profit.)

The Way Forward
As the economy improves, Auerbach has a renewed sense of enthusiasm to sell his concept and is positioning the company for growth. He says he has gotten several unsolicited requests to franchise the business from all over the country and even as far away as Israel.

Auerbach's ultimate vision is something similar to the business model behind Mrs. Fields: being able to bake the cookie in mass quantities at a facility, but then warm up and decorate them in the stores. He also hopes to sell the cookies in large chains like 7-Eleven and start franchising the idea as both a retail store and as non-traditional stores, such as food trucks and in theaters and arenas, like Barclays Center. He also wants to boost his catering effort.

The company is about to relaunch its e-commerce website and will soon stop the outsourcing of production (which means he will once again regain control of the actual recipe used for the cookies) in order to move production completely to one facility in Brooklyn, N.Y.

As a testament to how well his brand has done, Auerbach says this year was the second year he did the American Cancer Society's Taste of Hope, a food and beverage charity tasting event that features top New York restaurants and vendors. He says the cookies he brought were made from a different manufacturer than last year's cookies.

"The feedback did not change one bit. The branding overrode it. No one noticed the change. No one even considered that it could be different," he says. "It was the brand that mattered more than the actual product."

Catherine Kaputa, a brand expert and author of Breakthrough Branding: How Smart Entrepreneurs and Intrapreneurs Transform a Small Idea into a Big Brand, says the company's "strong visual identity" and "visual hook with the cookie itself" is a powerful advantage and memorable in customers' minds.

"Having a strong visual look that is memorable is powerful for a brand like the 'swoosh' for Nike, the pink ribbon for Susan B. Komen Race for the Cure, Christian Louboutin's red soles or Tiffany's blue box. So when you say the name Black and White Cookie, everyone sees the visual hook," she says.

But Kaputa says the company really needs to appeal to emotional branding with a story.

"Brands that become big brands wrap themselves in stories that connect emotionally with the target audience," she says. "What's the story behind how Black and White Cookies were created?"

In the end, it all comes down to money.

Auerbach hopes to seal the deal to open the new cafe as part of the list of merchants at Barclays Center. From promotional materials, the arena seems to be the centerpiece of the revitalization plan for downtown Brooklyn. Given that Black and White Cookie will have its production base just a few blocks away from the arena and it just so happens that the Nets' new colors are black and white, Auerbach is optimistic that a deal will soon be made.

While Auerbach is the face of Black and White Cookie, he does have two partners, who now -- sensing the opportunity there is for the refocused concept -- are looking to sell their controlling interest to pay off debt, but also to a suitor who would be able to give the concept the proper attention it needs, Auerbach says.

He plans to stay involved no matter what happens.

-- Written by Laurie Kulikowski in New York.

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