| Type | Public (NYSE: KKD) |
|---|---|
| Industry | Restaurant |
| Founded | 1937 |
| Headquarters | Winston-Salem, North Carolina, United States |
| Products | Doughnuts Sausage Rolls Soft drinks Hot Drinks |
| Revenue | 362 million USD (2011) |
| Net income | 7.6 million USD (2011) |
| Employees | 3,700 (2011)[1] |
| Website | krispykreme.com |
Krispy Kreme is the name of an international chain of doughnut stores that was founded by Vernon Rudolph in 1937 in Winston-Salem, North Carolina. The parent company of Krispy Kreme is Krispy Kreme Doughnuts, Inc. (NYSE: KKD) and is based in Winston-Salem, North Carolina, United States.
While selling assorted types of doughnuts, Krispy Kreme's signature item is a glazed doughnut that is traditionally served warm.[2] Along with their own Krispy Kreme brand store locations their products are sold in supermarkets, grocery stores, convenience stores, gas stations, Wal-Mart and Target stores in the United States.
Internationally, Loblaws supermarkets and Petro-Canada gas stations in Canada along with BP Service Stations and BP Travel Centres in Australia carry Krispy Kreme. In the United Kingdom Tesco supermarkets, Tesco Extra and Moto service stations carry Krispy Kreme products.[3]
The company's growth was steady prior to its initial public offering but profits have decreased in recent quarters.[4]
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Krispy Kreme's founder Vernon Rudolph and his uncle, Ishmael Armstrong, purchased Joseph LeBeouf's donut shop on Broad Street in Paducah, Kentucky along with a secret recipe for yeast-raised doughnuts in 1933 acquired from a Buffalo NY businessman. Rudolph began selling the yeast doughnuts in Paducah and delivered them on his bicycle. The operation was moved to Nashville, Tennessee and other family members joined to meet the customer demand. Rudolph sold his interest in the Nashville store in 1937 and opened a doughnut shop in Winston-Salem, North Carolina selling to grocery stores and then directly to individual customers. The first store in North Carolina was located in a rented building on South Main Street in Winston-Salem in what is now called historic Old Salem. The Krispy Kreme logo was designed by Benny Dinkins, a local architect.
Expansion occurred in the 1950s, including an early store in Savannah, GA and elsewhere in the southern U.S. By the 1960s, Krispy Kreme was known throughout the southeastern United States, and it began to expand into other areas. In 1976, Krispy Kreme Doughnut Corporation became a wholly owned subsidiary of Beatrice Foods of Chicago, Illinois. The headquarters for Krispy Kreme remained in Winston-Salem.
A group of franchisees purchased the corporation back from Beatrice Foods in 1982. In 2003, a pilot project in Mountain View, California, to sell doughnuts through car windows and sunroofs at a busy intersection (with wireless payment) failed.
On February 19, 2007, Krispy Kreme began selling the Whole Wheat Glazed doughnut in an attempt to appeal to the health conscious. The doughnut has 83.736 kJ (20 kilocalories in most countries, or 20 Calories in the US) fewer than the original glazed (754 kJ vs. 837 kJ) and contains more fiber (2 grams vs. 0.5 grams). As of January 2008, the trans fat content of all Krispy Kreme doughnuts was reduced to 0.5 of a gram or less. The U.S. Food and Drug Administration, in its guidelines, allows companies to round down to 0 g in its nutrition facts label even if the food contains as much as 0.5 of a gram per serving. Krispy Kreme benefited from this regulatory rule in its subsequent advertising campaign, touting its doughnuts as "trans fat free" and having "0 grams trans fat!".[2]
On July 1, 2010, Krispy Kreme introduced a doughnut that included the soft drink Cheerwine, which was to be sold in grocery stores in North and South Carolina during July.[5] The doughnuts proved so popular the Salisbury, North Carolina Krispy Kreme location, in the town where Cheerwine is made, sold them as well,[6] and after July 31, this was the only place to get them.[7] The Cheerwine Kreme doughnut returned for July 2011 and made its debut in Tennessee and Roanoke, Virginia.[8]
Also in 2010, Krispy Kreme Express, a delivery service for businesses, began testing at the Battleground Avenue location in Greensboro, North Carolina.[9]
Krispy Kreme began another phase of rapid expansion in the 1990s, opening stores outside the southeastern United States where most of their stores were located. Then, in December 2001, Krispy Kreme opened its first store outside the U.S. in Mississauga, Ontario, Canada, just outside Toronto.[10] Since 2004, Krispy Kreme has rapidly expanded its international operations.
On April 5, 2000, the corporation went public on the NASDAQ using the ticker symbol KREM.[11] On May 17, 2001, Krispy Kreme switched to the New York Stock Exchange, with the ticker symbol KKD, which is its current symbol.
On January 18, 2005, Krispy Kreme announced Stephen Cooper, chairman of financial consulting group Kroll Zolfo Cooper LLC, as interim CEO. Cooper replaces Scott Livengood, who the company said has retired as chairman, president, CEO and a director. The company also named Steven Panagos, a managing director of Kroll Zolfo, as president and COO.[12]
Although based on informal advertising such as word-of-mouth, in 2006, Krispy Kreme moved into television and radio advertisements, beginning with its "Share the Love" campaign with heart-shaped doughnuts.[13]
The first Krispy Kreme store to open outside North America was in Penrith, Australia, in the city of Sydney.[14] At first the operation was successful, opening 53 other stores around the country.[15] However as of November 1, 2010 the entire Australian division went into voluntary administration, with media reports attributing this to poor sales.[16] They have since come out of administration as of December 2010, and continued trading, with fewer stores. Besides the stores that Krispy Kreme operate in the United States and Canada, there are also locations in the United Kingdom, Australia, Lebanon, Turkey, Dominican Republic, Kuwait, Mexico, Puerto Rico, South Korea, Malaysia, Thailand, Indonesia, the Philippines, Japan, China, the United Arab Emirates, Qatar, Saudi Arabia, Bahrain[17]Hong Kong (2006–2008), and Ethiopia.
In August 2011, Krispy Kreme's Japan operation planned to increase the number of stores from 21 to 94, and its Mexico operation announced the number of stores would increase from 58 to 128 in five years.
In November 2011 it was announced that Krispy Kreme was going into Administration in the UK
In 2002, Krispy Kreme opened its second store in New England in Newington, Connecticut. What followed was a period of aggressive expansion throughout the region; this included a Krispy Kreme at the Prudential Center in Boston, Massachusetts, which opened on April 15, 2004 and closed sixteen months later. Initially fueled by hype surrounding the opening of Krispy Kreme in New England, this regional expansion was followed by the closing of all but one store, at the Mohegan Sun casino in Uncasville. In January 2010 the Milford store, the first to open in the region, closed after a long decline in patronage. Some say that Krispy Kreme's coffee "left many locals unimpressed, a mortal sin in the joe-loving Hub."[18]
Krispy Kreme also opened one store in Cranston, Rhode Island in May 2003. It is now closed after receiving initial fanfare. This may be due to dominance of Dunkin Donuts in the state.[19]
Krispy Kreme reentered the Arizona market when a new franchise reopened its East Mesa, Arizona, location on May 13, 2008. This location was purchased by Krispy Kreme after Rigel closed it in 2006. The new franchise owner, Dan Brinton, plans to eventually open four to five factory stores in the Phoenix market. These stores are planned to support 10 to 15 smaller non-factory stores that will only sell doughnuts and other products.[20]
In 2002, Krispy Kreme opened a restaurant style store in the Amarillo area in Texas. Many thought that the local doughnut store was the reason the national chain closed, but this was not the case. The Amarillo Krispy Kreme closed on July 17, 2005.[21] Another Krispy Kreme closed in Round Rock in 2009.
In January 2006, Krispy Kreme terminated the franchise license of Great Circle Family Foods LLC, alleging non-payment of required fees.[22] At the time, they were one of the largest franchisees, operating 28 stores in Southern California. Preceding this action was a financial dispute by Great Circle, culminating in their September lawsuit filed against Krispy Kreme. The lawsuit was settled in July 2006 and led to the reinstatement of Great Circle's license.[23]
On August 22, 2007, Great Circle Family Foods and some of its wholly owned subsidiaries filed for Chapter 11 Bankruptcy.[24] Great Circle emerged from Chapter 11 on July 6, 2009, and currently operates 11 stores in Southern California.[25]
On May 6, 2008, the first store in Puerto Rico opened,[26] followed by two additional locations in 2010 and one additional location in 2011.[27]
The 18 stores which opened in Canada, out of 32 planned, have been reduced to four. Two of those exist in Quebec (in Longueuil and Quebec City) while the other two stores are in Mississauga, Ontario and Delta, British Columbia. A small seasonal store was recently opened in Wasaga Beach, Ontario.[28] The Wasaga Beach location receives its doughnuts from the Mississauga store every morning. Another small store recently opened on November 3, 2010 in Toronto at Bathurst and Harbord Streets in the city's Harbord Village neighborhood.[29] This store receives shipments from the Mississauga store. Krispy Kreme's Canadian assets were put up for sale in 2005 seven weeks after the U.S.-based doughnut company had the firm that owns and operates stores in Canada placed under bankruptcy protection.[30] The Canadian operations are managed under the franchisee Krispy K Canada Company of Mississauga, Ontario.
In the Philippines, Krispy Kreme currently has 17 branches in Metro Manila and one in Angeles City, Pampanga, and two branches in Cebu City.
Krispy Kreme Doughnuts Japan operates 27 shops throughout the country.[31]