The informal American-English phrase that’s how the cookie crumbles, or that’s the way the cookie crumbles, means that’s the way the situation is, and it must be accepted, however undesirable—synonyms: that’s the way the mop flops and that’s how the ball bounces, or that’s the way the ball bounces.

The earliest instance that I have found of that’s how, or the way, the cookie crumbles is from the column Innocent Bystander, by Ollie M. James, in The Cincinnati Enquirer (Cincinnati, Ohio) of Wednesday 23^rd February 1955:

All of the calendars we received have been right so far every day of the year, but Eugene Grill of the U.S. Playing Card Co. sent us the March sheet from an “All Sports” calendar and it is somewhat loused up. It says that Ash Wednesday comes on Thursday, March 3, lists March 14 as Valentine Day and says March 15 is the last day you can pay your income tax (the filing date has been moved back to April 15 this year). Well, as we say in the publishing business, sometimes that is the way the cookie crumbles.

In the following paragraph from his column Senator Soaper Says, published in The Muncie Star (Muncie, Indiana) of Monday 28^th February 1955, the American columnist and author William Edward Vaughan (1915-77) illustrated the generation gap by contrasting that’s the way the cookie crumbles, which had recently appeared, with its earlier synonym that’s the way the ball bounces:

The teen-age lovely down the street reports that her father is unbearably square. To express a certain fatalism he still says, “That’s the way the ball bounces” instead of “That’s the way the cookie crumbles.”

__________

 

I seem to be the first to notice the existence of the phrase (that’s when) the cookie crumbled, meaning (that’s when) a decisive change in a situation occurred.

The earliest instance that I have found is from It’s News Today—The World Around, by Bob Wells, published in the Long Beach Independent (Long Beach, California) of Friday 24^th August 1956:

Chuck Wagon

If you get to Las Vegas soon, Mac, try the Caesar salad in the steak house of the El Rancho Vegas Hotel. They got a way of tossing it that’s the craziest.
These two bowls of salad were sitting on a chuck wagon, see, minding their own business. Seated at the table next to the chuck wagon was Miss Lili St. Cyr¹, a tomato any salad would be proud to associate with. Lili, the well-known stripteuse, was resting her ecderon² preliminary to another bout of ecdysis³; that is, she was between shows.
Derek Goodman—A South African millionaire who has been linked romantically with Zsa Zsa Gabor⁴, as who hasn’t?—came over to Lili’s table and sat down. Ted Jordan, Lili’s ever-loving husband, promptly strolled over with an air of careful nonchalance and sat down, too.
A few minutes later Ted was heard to inquire, “How dare you speak to my wife like that?”
Derek dodged that question with, “If she were my wife I wouldn’t leave her sitting here alone.”
Well, that’s when the cookie crumbled, right there. Someone was smote. He gave as good as he got. Both Ted and Derek disappeared into the salad. Man, you’ve never seen a salad tossed like that one.
When sheriff’s deputies broke it up, Derek had a black eye and Ted had a cut lip and a split piece of romaine.

¹ Lili St. Cyr (Willis Marie Van Schaack – 1918-99), American burlesque stripteaser
² ecderon: a term introduced in 1859 by the English biologist Thomas Henry Huxley (1825-95) to denote the outer part of the skin and skin-like structures, including the epidermis, the epithelium, and all structures homologous with these
³ ecdysis: the process of shedding the old skin in reptiles
⁴ Zsa Zsa Gabor (Sári Gábor – 1917-2016), Hungarian-American actress

A teenage girl signing herself ‘Avid Reader’ used the cookie crumbled in a letter published in the agony column Ann Landers⁵ Answers Your Problems, in the Aberdeen American-News (Aberdeen, South Dakota) of Wednesday 10^th April 1957:

Dear Ann: I’m 17 and have been in love before, but never like this. My parents are giving me a hard time. They want me to give the ring back and not tie myself down during what they call the “best years of my life.”
The cookie crumbled last night when Doug brought me home. It was 12 o’clock on the dot. Dad almost broke a blood vessel yelling. He thinks 12 is late on a school night, but I never go to bed any earlier anyway, so what’s the diff if I’m in the house or out?

⁵ Ann Landers, pseudonym, from 1955 to 2002, of the American advice columnist Esther Pauline Lederer (née Friedman – 1918-2002)