Donuts. Thats all they are.

My area recently received their first 'Krispy Kreme' Donut Franchise a few months ago (in Orem I think). I was so stoked. I'd heard about these delicious goodies from many a pilgrim to mystical land of 'vegas. About how they are the closest thing to an orgasm that does not require touching yourself. So one day, I took the arduous trek (about 60 miles) to this new location, pulled up to the window, and order a couple of their signature glazed donuts and a bottle of milk to go with them.

I drove myself to a secluded area, mentally preparing myself for the stellar experience I was about to, erm, experience.

I pulled one of the the shiny, warm torus'es from their grease stained bag, and, in a fit of pastry lust, bit off half of it.

It was...

It was...

It was a glazed donut.

That's all.


I honestly don't see what's so good about them that they IPO'ed and raised several million dollars. For my money, I'd just rather get some from Dunkin Donuts. They ain't bad, but they're not better than sex.

Krispy Kremes seem to me to be two different donuts, depending on how and when they're purchased.

Just going into your local Krispy Kreme store and purchasing a donut off the rack, or even through the drive-thru window, will result in your getting a donut. Just a donut (or whatever number you've ordered, barring the ineptitude and attitude of the workers). Nothing special. In fact, it probably pales in comparison to other donuts you've had in the past. And thus, you leave unfulfilled and wondering what everyone was talking about.

But if you go into the store and ask for a fresh donut, everything changes. The clerk pulls a donut right off of the belt and puts it into your bag. Quickly, now, eat it.

The donut seems to melt in your mouth. It's cooled enough so that the sugar doesn't burn your tongue but warm enough to let the flavors meld. After eating one of these, you begin to understand. This is why i can't fathom buying Krispy Kremes prepackaged in a supermarket, nor why they've open stores in Manhattan. It seems much harder to experience donut euphoria when there isn't room to see the conveyor belt and know the donuts are ripe.

You can microwave the donuts for a few seconds to bring some of the flavor back, but it's not the same.

Krispy-Kreme Doughnuts, Inc. was founded in Winston-Salem, N.C., to be specific, and sells approximately five million doughnuts a day and more than two billion doughnuts each year. Its shares surged in the fourth quarter of 2001 to $8.3 million (14 cents per share) from $4.3 million and 8 cents per share. Total company revenue also rose, $81.9 million to $117.1 million. The company expects growth of 57 percent in 2002 and 39 percent in 2003. Earnings rose 55% in Q1 of 2002, and they earned $8.9 million (15 cents a share) for the period ending 4 August, up from $5.9 million, or 10 cents/share the previous year. In Q2, their net rose 50% from strong sales as well as manufacturing and distribution revenue, which rose 41% to $35.1 million. The company expects to earn 16 cents/share in Q3, up from 11 cents the previous year and 18 cents/share in the fourth, up from $8.3 million or 14 cents/share.

Krispy Kreme's first stores outside of North America will be in Australia and New Zealand, in a development partnership for 30 stores over five years. The first of these stores is slated to open in Sydney in March 2003, under the joint venture of Krispy Kreme Australia, which will have its equity divided between Krispy Kreme Winston-Salem, at 35% equity interest, and Borderless Australia Pty Ltd., an Australian firm that will hold the balance.

This agreement follows about a year of exploring international markets, said Krispy Kreme Chairman and Chief Executive Scott Livengood. They are also exploring Mexico markets.

The name comes from the name of the recipe bought by Vernon Rudolph from a French chef in New Orleans. It must have been a language mistake since the donuts are neither Crispy nor Creamy.

Rudolph started selling donuts to local grocery stores on July 13th, 1937*. Customers kept asking him for hot donuts so he cut a hole in the wall and started selling his Hot Original Glazed direct.

By 2002, Krispy Kreme had 292** stores and did 492** million in sales. This is relatively small since Dunkin Donuts has 3,600 stores in the US alone and Canadian donut giant, Tim Hortons, has 2,200 in its native country.

It is not the biggest chain, but size doesn’t matter to Krispy Kreme’s fans. They camp outside the stores at their openings, bringing their sleeping bags and TVs along with them. They line up 50-cars-long outside the drive-throughs. In a world that has become so health-conscious that McDonalds is selling salads, amazingly, Krispy Kreme has made deep-fried cake dipped in icing a success.

Krispy Kreme enjoyed steady growth until Rudolph died in 1973. The company was then reorganized and sold to Beatrice Foods in 1976. It suffered under Beatrice, who tried to sell the donuts to grocery stores, diverting from the thing that everyone loves about Krispy Kreme – hot fresh donuts. By 1982, a group of franchisees bought the company back from Beatrice with a renewed focus on the “Fresh Donuts Now” experience.

With their artefacts in the Smithsonian Institution’s National Museum of American History, they have earned their place as a 20th Century American Icon. They have done it all with no marketing. Krispy Kreme spends almost nothing on advertising. No TV commercials. No print ads. No billboards. Why? It is just too easy to give away free donuts. Every time they open a store in a new city, they send free donuts to the media so DJs and TV personalities rave about the donuts for free. Their popular store openings also get a lot of free press-coverage. The warm-sweet-sticky taste sells itself.

Krispy Kreme now operates in 37 States, Canada and Australia. In some cities they are ubiquitous - sold not only hot and fresh, but in gas stations and grocery stores. It is a phenomenon that investors and analysts alike believe will grow as quickly as the North American Backside. A final point to remember about Krispy Kreme: One Hot Original Glazed Doughnut packs 210 calories, 12 grams of fat (four of them saturated), 13 grams of sugar, and no fibre.

* 08/08/2003
**The Hole Story, Andy Serwer, Fortune, 06/23/2003

I would disagree with the idea that Krispy Kreme don’t use any marketing. They may not go for in-your-face TV adverts every fifteen minutes, like Dunkin’ Donuts, but they have marketed themselves quite well. Their marketing tactics are not only a matter of sending free doughnuts to celebrities, but of designing their stores and policies in a manner that sucks customers in and keeps them coming back. Their product tastes pretty good, too, but that isn’t what makes Krispy Kreme such a wild success story.

Aside from paying attention to quality, the chain does three things that make them stand out from the crowd. First of all, there is the now famous “Hot Doughnuts Now” sign. This is one of the best marketing strategies I’ve ever seen. Right from the highway, you can see that the doughnuts are hot, fresh and delicious. Immediately you begin to believe that Dunkin’ Donuts made their doughnuts early this morning, if not yesterday or the week before. Cars get pulled off the street like magnetized iron shavings when this sign lights up.

And as soon as the Hot Doughnuts sign has done its work, you can actually see the doughnuts cooking! In the larger stores at least, the conveyer belt on which the Krispies fry is displayed behind a glass wall, and you can watch hundreds of doughnuts advancing like Roman legions through the entire cooking process.

You might think this would be like watching paint dry, but it’s fascinating. The whole transformation from skinny, pale, geek-like ring of uncooked dough to full-bodied, evenly tanned beach-volleyball-playing delicacy takes about five minutes and is time well spent, especially if you have small children with you. More importantly for Krispy Kreme, it reminds you that your doughnut is as fresh as fresh gets. Any fresher than this and it would be flour. That’s what I want when I buy a doughnut!

But the clever marketing doesn’t end there. Because if the employees see you watching the doughnuts cooking, they will actually give you one or three to taste. FOR FREE, and before you’ve bought anything. Not just one for the cute little girl, either, but for the adults as well. The first time I saw this, I had to pick my jaw up off the floor. This is a fast-food joint, fer godsake. If Burger King ever gave me a serving of fries while I was still standing in line, without requiring me to purchase anything, I would probably pinch my arm to wake myself up.

The genius of this free sample policy cannot be overstated. For one thing, it displays confidence. The chain is so sure that you will like the one doughnut and buy an additional dozen, they are willing to take the slim chance that you will just take the freebie and walk out. From what I’ve seen, nobody ever walks out. They might if the doughnuts were crap, but as I said before, they’re actually fairly good.

In addition, the free sample actually makes people buy more than they wanted to. When you give something to someone, with no visible strings attached, they automatically feel like they owe you something. You may not believe that this works. You may feel like you are too intelligent to fall for such a stupid trick. But it does, and you aren’t.

Finally, it makes Krispy Kreme seem like nice guys. KK are buying themselves an image of friendly neighbourhood bakers, for the infinitesimal price of one free doughnut per customer. Unless they totally mess things up, this friendly image will probably last long after they stop giving away freebies, ensuring that Krispy Kreme have a vast market of dedicated consumers that will stay loyal for the better part of their lives.

When people honestly believe that a company as successful as Krispy Kreme has succeeded without any marketing, the marketers have done a good job.

Krispy Kreme donuts are Kosher. At least in some places.

In New York, at least one of the shops (on West 72nd Street) is strictly supervised Kosher. Although the letter from the Kashrut organisation does seem to contradict itself, saying that they only give their "seal" to milky products that are Chalav Yisrael (made with supervised milk). It then goes on to say that the donuts aren't. Who knows! It's good enough for me.

There is a Krispy Kreme bakery in the New York New York hotel and casino in Las Vegas. This has a letter up from a local conservative Rabbi saying that the ingredients are under Orthodox supervision, and he supervises the bakery itself.

There are a couple of Krispy Kreme shops in the UK, and countless others in the USA. I have no idea on the situation with these.

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