Aunt Stella: Japan’s Pennsylvania Dutch Cookie Queen : Marketing: Joseph Dunkle has parlayed the name into a $60-million enterprise, including furniture, children’s clothing and books.
Giant American cookie monsters Mrs. Fields and Famous Amos raced to Japan in the ‘80s to take a chomp out of the booming cookie market.
They ended up with crumbs instead, while Pennsylvania Dutch Aunt Stella became queen of the upscale cookies in this country.
Hardly a U.S. household name, Aunt Stella’s Handmade Cookies and Cakes is the brainchild of Joseph Dunkle, an American who first came to Japan with the U.S. military in 1969. Since 1982, Dunkle has parlayed the Aunt Stella name into a $60-million enterprise, including cookies, furniture, children’s clothing and books.
Discharged from the army in late 1970, Dunkle’s first Japanese venture was a vending machine company that went bankrupt after a year. Undaunted, in 1973, he pitched the head of Tokyo’s Seibo department store on selling soft-serve ice cream. While others in the company were less than enthusiastic, Dunkle got the go-ahead. Despite opening in the middle of winter, he managed to sell about $57,000 worth of ice cream the first month. Eventually, the chain grew to 40 stores, but profits eluded him due to rising costs and limited suppliers.
In the early ‘8Os, Dunkle got the idea for selling cookies and began baking them at home. “We started selling them in November of 1982 and by the end of 1983 there were 10 to 15 copies,” Dunkle said.
One thing his competitors couldn’t copy was Joe’s Aunt Stella. “I really had an Aunt Stella and she baked cookies for me,” he said. “I was brought up in Pennsylvania Dutch country and it seemed a natural to me.”
It also provided him with a story to sell.
“The Japanese people love knowledge and like to learn all the time,” he said. “Amish people have a common denominator with the Japanese: It’s the harmony that both cultures have and maintain.” With these beliefs about the two cultures, Dunkle coined the phrase “warm heart communications” as both a corporate philosophy and marketing slogan for his many products.
Beyond warm, fuzzy images, Dunkle relies on sound business principles of adaptation and product placement. The first thing he did was forget big, chewy cookies Americans are used to.
“We adapted to the market. Seven to eight centimeters [about three inches] is just the right size for a couple of bites. We also made them crispy,” he said. “The Japanese have a feel for rice crackers so that texture wouldn’t be so foreign. Finally, we cut down on the sweeteners after considering that, on average, Japanese consume 23 kilograms [50.6 pounds] of sugar per year compared to 65 kilograms [143 pounds] by Americans.”
Aunt Stella bakes a range of cookies familiar to both countries such as chocolate chip and sugar cookies, but also offers a line of vegetable cookies such as spinach, carrot, tomato, celery and daizi (soybean). “We recently introduced that line [soybean] to attract the 20-year-old health-conscious market,” he said.
Just as important as quality and taste, Dunkle focuses on product placement. “I want my cookies to be the Godiva chocolates of the cookie industry.”
Selling for the U.S. equivalent of $20 per pound, Aunt Stella’s is in that ballpark.
“During the bubble economy, I was getting close to mass-market stature, so I raised my prices. I learned a lesson from Louis Vuitton in Japan. They expanded to the point where high school girls were carrying their bags. Eventually ladies who owned them gave them away to their daughters.”
Dunkle said he has always concentrated on the gift market and his target consumers are women 35 and older with household income between 10-million and 18-million yen. And when it comes to finding out what they want, he goes to the source.
His wife, Yukiko, is the company’s chief designer and presides over regular meetings of consumer monitors who are friends that fit the target profile. Sitting around a Pennsylvania Dutch wooden table in a cozy boardroom 60 stories above metropolitan Tokyo, they create Aunt Stella packaging for 12 seasons and holidays each year.
When it comes right down to it, Dunkle said, “I’m not a cookie company, I’m a package company. Many of the seasons and holidays for which the Dunkles design packages include local ones such as White Day, when men are expected to reciprocate for Valentine’s gifts given them a month earlier.”
Dunkle, who has become fluent in Japanese over the years, said, “In 1984 we grabbed on to that boom and gave a radio and TV interview promoting giving cookies on White Day.” Since then, it’s been the biggest selling month. “You just light the fire and blow it once and boom, it’s there.”
More than fads and holidays, Dunkle really credits his success to what he calls lifestyle marketing.
“In 1986, the cookie business was going great and I thought about adding something to it. It would have been natural to add another food line, but I wanted to be different.”
Instead he started selling country-style furniture he imported from Pennsylvania.
“The idea was to have the food introduce the concept, creating a demand for a certain lifestyle. The timing was right because the second home market took off and customers were buying.”
Dunkle followed that success with a line of children’s clothes and more recently with a series of coffee-table books of Pennsylvania Dutch recipes and the Amish way of life.
“People are buying my advertising and they keep it on the table. It’s the dream of any advertiser.”
The bottom line, said Dunkle, “is the tiny concepts that you implement on a daily basis that keep your business alive and keep people seeing you.”
However, he said, too much exposure is not a good thing.
He believes the secret to longevity is “reeling it out a little at a time. In a time of abundance the smartest marketer does not fully satisfy the demand that he’s created.”
That’s why with 70 kinds of cookies selling 1,000 tons of cookies a year, Dunkle wants to stop with 100 kinds by 2000. He plans similar caps for his furniture and clothing outlets.
So where does he go from here?
Overseas, for one thing. Aunt Stella’s currently has one store in Singapore and Hong Kong and three in Taiwan with another planned by year’s end. As for new concepts, he said, he’d like to sponsor a television series about an Amish boy and a Japanese girl--or vice versa--as a way of intertwining the cultures.
“Really, the journey is the reward. That’s my philosophy. You have to have your priorities set and can’t be greedy.”
