Industry News | March 11, 2015 | QSR Exclusive Brief

Krispy Kreme Ramps up Growth, Opens 1,000th Store

image used with permission.

After years of steady growth, Krispy Kreme has ramped up its expansion. In February, the doughnut purveyor opened its 1,000th location in Kansas City, Kansas. Before the calendar year is up, it plans to open in six to eight new countries, mostly concentrated in the Asia-Pacific and Latin American regions. It will also to continue to build its domestic presence with franchisees in Texas, Maryland, northern Virginia, and Arkansas, and corporate stores in Atlanta and Jacksonville, Florida.

This fast pace might seem sudden, but chief marketing officer Dwayne Chambers says the company has been working toward it for some time.

“Let’s say you made a decision to run a marathon. You’re probably not going to get out there and just start running,” Chambers says. “There was a period of time … where it was kind of righting the ship … getting the financials right, aligning things right, getting ready.”

The recent growth may seem counterintuitive given that more consumers are calling for healthier fare. Within the limited-service sector, 72 percent of adults say they look for healthy menu options when choosing a restaurant, according to the National Restaurant Association’s 2015 Industry Forecast. However, the research also finds that doughnuts were one of the trends that gained the most momentum in chef surveys. As far as indulgences go, the Original Glazed Doughnut clocks in at 190 calories and 11 grams of fat—neither too sinful nor saintly.

Chambers credits part of Krispy Kreme’s continued success to the authenticity of the brand and the quality of the product. Although roughly two-thirds of the company’s units are located outside the U.S., the doughnut mix is always sourced from Winston-Salem, North Carolina factory.

“I've got these lab technicians that work for me that literally are checking every batch of doughnut mix that comes out of that plant and just making sure that it's absolutely perfect,” Chambers says.

The other crucial factor is the emotional connection customers have with Krispy Kreme doughnuts. Popular LTO flavors like coffee, brownie-batter, and salted caramel keep the concept fresh, but Krispy Kreme stays close to its core: glazed doughnuts served hot and fresh.

“We had a guy in some focus group a few years ago in Raleigh [and] I was behind the glass listening, and the guy said, ‘Where else can you get something that's seconds old?’” Chambers says. “Our brand is very much a reward type of brand. One of our desires is always that someone would go, ‘Yeah, that was worth it.’” 

By Nicole Duncan

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