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Could Starbucksization mean a Krispy Kreme comeback?

Written by RetailWire Staff

Photo: Krispy Kreme

Krispy Kreme, a company that has long kept coffee on its back burner, is trying to up its game in the space where Starbucks dominates. Known primarily for its doughnuts, Krispy Kreme is testing out changes that will make its stores more like Starbucks in both product and experience. According to an article in Triad Business Journal, the company is testing a few Starbucks-esque features at a Krispy Kreme in Clemmons, NC. There, coffee is fresh-ground, drinks such as espresso and lattes are available on the menu, and counter help are calling themselves "baristas." The location also includes free Wi-Fi, showing a move away from a quick-fix environment towards the "third-place" appeal of a coffee shop. While Krispy Kreme may not be the biggest name in the mid-2010s, the company spent some time at the top of the foodservice world. In mid-August 2003, Krispy Kreme's stock was trading at $48.90, but collapsed to 9.85 by December 2004. At the time, the company attributed its fall from grace to the then-new low-carb trend, which demonized the doughnut even as a casual indulgence. Problems with the SEC and accounting scandals may have also affected stock performance. In the subsequent decade, the stock bounced from a low of $1.15 to around $9 in 2012. In 2013 it saw a turnaround due to international sales alongside the erstwhile "cronut" trend. The stock now trades around $15, far above its all-time low but nowhere near its heyday. Krispy Kreme has been slowly waking up to the importance of coffee to its business model. In 2011, the company rolled out a line of CPG coffees and added a few more contemporary coffee drinks to its in-store menu. As Krispy Kreme tries to become more like Starbucks, it has competition on all sides. Big-name doughnut chains like Dunkin' Donuts and Tim Hortons and bagel chains like Einstein Bros. are established go-to spots for in-and-out coffee traffic. Medium-sized coffee shop chains and local independents often fill the role of a "third place" outside of Starbucks, especially for those seeking a less "corporate" coffee-drinking environment.

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