Sales tanked last year — down more than 3.5%. Some consumers started stuffing their otherwise-empty cookie jars with unsalted nuts, unbuttered popcorn and — heaven forbid — dried fruit.

It's not that people don't love cookies. Many today worry more about what's in cookies. They don't like the carbs. They don't like the sugar. And they don't like trans fats. Even Sesame Street's Cookie Monster — newly concerned about nutrition — is literally singing a new tune: A Cookie is a Sometimes Food.

But one of the most familiar names in the business also blames cookie makers for letting cookies get boring.

"No one's interested in creating the best cookie anymore," says Wally "Famous" Amos, 67, founder of the Famous Amos brand, now owned by Kellogg. "All anyone wants to do is appeal to this or that segment. It's smoke and mirrors."

Little wonder that Amos is now in the muffin-making business.

But the kingpins of $4.6 billion cookie land, from Nabisco to Keebler to Pepperidge Farm, are showing signs that they would rather rumble than crumble.

Even Pepperidge Farm — best-known for making fancy cookies preferred by grandmas and knitting clubs — thinks it has figured out a way to pump much-needed life into its once-dainty cookies: smash 'em into bits.

Pepperidge Farm hasn't breathed a word about the new line of cookies — dubbed Whims — until now. Executives are worried that rivals will respond before Whims cookie bits hit stores in May. But it's not just their small size that's unusual. It's also what they come in: snack canisters that fit into car cup holders. And Whims will fetch $3.49 a canister — a fat 50-cent premium over a package of the company's top-selling Milanos.

Last year's industry-sales drop extended a decline that started in 2002 and will continue through 2009, projects Mintel, the market-research giant. In inflation-adjusted dollars, it sees a 16% decline during the next five years.

That's a trend cookie makers can no longer ignore. "There's no question that consumers are evolving — and we must evolve with them," says Mike Senackerib, general manager of biscuits at Nabisco, maker of Oreos and Chips Ahoy.

Nabisco saw sales slip 3.2% last year, Information Resources says. Others had it worse. Keebler's sales were off 9.2%. And private-label sales were down 11.4%, the research firm adds.

"Cookies are still a food consumers love," insists Brad Davidson, president of the U.S. Snacks Division at Kellogg. After all, some 92% of American households still have cookies of some sort in them. "If we ate carrots all day long, we'd be pretty boring people."

Kids eating fewer cookies

But the writing's on the wall — kids' bedroom walls, to be precise. Children under age 18 — by far the leading group of cookie consumers — are abandoning them.

Just nine years ago, the typical kid ate cookies 61 times annually, reports NPD Group, a consumer research firm. By last year, that number had shrunk to 49 times. The skid marks are in the icing.

"The biggest change in the cookie market is that kids are cutting them out," says Harry Balzer, food guru at researcher NPD Group.

Of course, it's often the kids' parents doing the cutting. Some 18% of parents surveyed by Mintel say their children are eating fewer cookies. The effect will be long term.

"If you're not growing up eating cookies," offers Mintel's Lynn Dornblaser, "you're certainly not going to eat them as an adult."

At the same time, the growth of cookie-snack replacements, such as yogurt, are exploding. In 1984, the typical person ate yogurt six times a year. Last year, it was 19 times, NPD says.

So, pity the Keebler Elf. And that gap-toothed Girl Scout peddling Thin Mints at your door. And that cute kid in the commercials who made his living licking the cream filling from his Oreos.

With nothing to lose, the nation's major cookie makers are:

•Thinking small. Pepperidge Farm spent $10 million over three years to develop the Whims lines, and it will spend an additional $25 million, or so, beginning in May to market them. One variety is Whims Crunchy Clusters (small chocolate-cashew chunks). The other is Whims Crispy Waves (curvy chocolate-chip pieces).

The sizes and shapes aren't modeled after other cookies; they are modeled after salty snacks, says Jay Gould, president of Pepperidge Farms. So are the containers. "The canister is what we call a popcorn container — to suggest the cookies are pop-able," he says.

Besides its Whims, Pepperidge Farm last year began to sell mini-versions of its Milanos.

Meanwhile, Keebler is introducing Gripz — tiny, round Chips Deluxe pieces. They're about the size of M&Ms and come in single-serve packs.

Does small size mean consumers might eat more? Gould says he doesn't know. Each container of Whims Clusters contains about 45 little cookies. The label suggests a single, 150-calorie serving is about five chunks. But some experts suggest few folks will stop at that.

The Food and Brand Lab at the University of Illinois recently studied how 223 consumers reacted to big and small cookies at an open house. While 51% of those attending declined to take even one large, 80-calorie cookie, 83% took an average six small cookies — a total of 180 calories.

"People only think cookies are fattening if the cookies are big," says Brian Wansink, director of the lab. "Otherwise, they seem to ignore the calories."

Maybe that's why Gould is projecting first-year sales of Whims to exceed $50 million. The new cookies could soon be 25% of the company's total business, he says.

•Offering more indulgence, not less. Fancy cookie maker Pepperidge Farm knows indulgence pays off. Its sales were up 1% last year.

Others are getting indulgent, too. Sales of Double Stuf Oreo (twice the cream filling) have been on a tear, and Nabisco is introducing a version with peanut butter cream. It also just launched Milk Chocolate Covered Oreos.

Keebler is test-marketing Keebler Sensations — baked with big chunks of chocolate.

Mrs. Fields' same-store sales were up more than 2% in 2004 compared with 2003, says Dale Thompson, vice president of marketing. And the biggest growth area this year, he projects, will be the company's decadent, iced cookie cakes, which retail for up to $25.

•Making better-for-you moves. Nabisco, a unit of Kraft Foods, says it recently cracked the code and developed a recipe for its classic Oreos that will be sold and labeled, by the year's end, with zero grams of trans fats. And it expects to virtually eliminate most artery-clogging trans fats from its cookies by year's end.

The cookie maker also is touting "portion control" with 100-calorie, single-serve packs of (creamless!) Oreos and Chips Ahoy Thin Crisps. It's working: Since their introduction in July, the products already rank among the company's best sellers.

So it's no accident that a 100-calorie Kid Sense Fun Pack of Teddy Grahams Cubs has just been launched. "This appeals to parents trying to manage kids' nutrition," says Nabisco's Senackerib. Keebler plans to mimic Nabisco in June with Keebler Right Bites — 100-calorie packs of Chips Deluxe and Sandies.

•Bringing back ad icons. Get ready for the return of Ernie the Elf. Keebler consumer research shows that consumers didn't fall for the newer elves the company concocted, "But they love Ernie," Davidson says. Ernie will show up in ads and on packages. The old Keebler jingle is making a return, too.

•Going for a dip. Last month, Nabisco launched Chips Ahoy Sticks — thumb-length cookies shaped like square sticks for dipping into yogurt or chocolate.

•Making cookies portable. With its Whims canisters, Pepperidge Farm isn't the only one making cookies portable. Nabisco is introducing Oreo Twins — single-serve packs of two Oreos sold in boxes of 24.

•Mixing it up with candies. Cookie bars such as Cookies & Snickers and Cookies & M&M's from Mars have been hits. Hershey has begun to sell Hershey's Cookies and Reese's Cookies (both in packs of four) with zero grams of trans fats.

Fighting cookie rejection

All of this might not be enough. Meet Ellen Mondro — a cookie maker's worst nightmare. She is a consumer who says she has abandoned packaged cookies for good. A year ago, Mondro, a Boston mother of two sons, ages 4 and 7, virtually stopped buying cookies. Family members used to each gobble three or four cookies a night before bed.

Now, it's fruit or other better-for-you snacks — except on occasions when she bakes cookies from refrigerated cookie dough. "I grew up with a lot of Oreos in the house," she says. "But I'm smarter now."

Similarly, Marie Lehman of Hillsborough, Calif., buys cookies only on family vacations. That's a big drop from the bag a week that her family used to consume.

"I turned 50 and wanted to get rid of the extra weight," she says. And daughter Sloane, 15, is following Mom's lead. When Sloane recently had seven friends for a party, the girls nixed the idea of cookies and Häagen-Dazs ice cream for fresh fruit.

Nor can cookie makers count on their old friends. Nearly 40% of adults says they're eating fewer cookies than just one year ago, researcher Mintel says.

Perhaps Debbi Fields got out just in time. The founder of Mrs. Fields cookies retired in 2000. She says she doesn't have a solution for the industry's woes. "My only claim to fame is my ongoing love of warm chocolate chip cookies," she says.

Even Girl Scouts have taken a hit.

Girl Scouts don't keep a national tab on cookie sales. But one of the few growth areas for cookie sales this year in Madison, Wis., was among consumers who donated money — but didn't take the cookies. That's what about 4% of buyers did, says Barbara Wiers, a spokeswoman for the Girl Scouts of Black Hawk Council.

But don't look for Girl Scouts to forsake their cookie tradition any time soon, Wiers says. "No one's saying we need to be selling apples and oranges.