Seth Berkowitz started his cookie business, Insomnia Cookies, in 2002 as a college student at the University of Pennsylvania. He initially baked cookies in his college house and personally delivered them around campus in the early hours of the morning. The idea for Insomnia Cookies came from Berkowitz’s late-night cravings for warm, delicious treats that were not easily accessible for college students at the time. By the time he graduated in 2004, Berkowitz expanded Insomnia Cookies by opening brick-and-mortar locations near college campuses in Syracuse, New York, Champaign, Illinois, and College Park, Maryland.
As Insomnia Cookies grew, Berkowitz faced challenges in managing the business’s growth and expansion. He experimented with different business models to reach profitability, including ghost kitchens, licensed frozen yogurt shops, and vending trucks. His co-founder, Jared Barnett, eventually sold his equity stake to Berkowitz, as their visions for the company no longer aligned. Insomnia Cookies struggled to become profitable, topping $1 million in annual revenue in 2008 but still experiencing financial difficulties. In 2009, Berkowitz made a drastic cost-cutting decision, downsizing Insomnia’s corporate team to just himself and a finance associate.
After almost a decade of experimentation and challenges, Berkowitz shifted back to a brick-and-mortar model for Insomnia Cookies. The company funded a new location using internal cash flow for the first time in 2012, marking a significant milestone. Over the next six years, Insomnia opened 125 new stores, expanding its reach. In 2018, Krispy Kreme acquired a majority stake in Insomnia Cookies, valuing the company at over $500 million. The acquisition helped Insomnia navigate the challenges of the Covid-19 era and set plans for future growth.
Despite the success and acquisitions, Berkowitz’s journey with Insomnia Cookies has not been without its share of challenges. Co-founder Barnett sued the company over the sale to Krispy Kreme, claiming he was owed a share of the proceeds. This lawsuit was settled in January, with Berkowitz reportedly agreeing to pay Barnett $3.5 million. Despite the legal challenges, Berkowitz remains focused on growing the Insomnia Cookies brand, with plans to open dozens of new locations across the U.S. in 2024. He credits the brand’s perseverance, overcoming numerous obstacles to succeed and thrive in the competitive food industry.
Insomnia Cookies’ success story showcases Berkowitz’s entrepreneurial journey from a college student with a late-night craving to the CEO of a thriving cookie chain. His determination, perseverance, and willingness to adapt have been instrumental in overcoming challenges and growing the business. As Insomnia Cookies continues to expand and innovate, Berkowitz remains committed to providing customers with warm, delicious treats that resonate with their cravings. Despite setbacks, legal battles, and uncertainties, Berkowitz’s focus on the brand’s journey and perseverance continues to drive the success of Insomnia Cookies in a competitive market.
