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The Krispy Kreme Story: How It Made Billions From Doughnuts And Coffee

Oct 21, 2022

, and its iconic glazed doughnuts have continued to grow in popularity which has helped the brand reach new heights.

Krispy Kreme was first established in 1937 by Vernon Rudolph, who initially sold the doughnuts to local stores and later opened the doors for public sale. Through its innovation and consistent taste of its glazed doughnuts, Krispy Kreme continued to grow during the 40s and 50s before expanding outside the traditional stores. The brand has been officially registered as an icon in America and went through several mergers to reorganize and increase sales. Krispy Kreme has not only steadied its hold on customers but also went public with its listing to encourage more significant investments. Today, the company is valued at a whopping $2.05 billion.

The impact of Krispy Kreme dates back to its founder Vernon Rudolph who brought innovation to a snack that changed the history of doughnuts. Through several leaderships and acquisitions, Krispy Kreme has stood the test of time to sell quality food. Let’s take a look at the rise of Krispy Kreme.

A Demand For Consumer Sale

 

The history of Krispy Kreme dates back to Vernon Rudolph, who bought a secret doughnut recipe from a French chef in New Orleans. He rented a small shop in Winston-Salem, North Carolina, and opened Krispy Kreme on July 13, 1937. Rudolph began cooking and selling doughnuts to local vendors and grocery stores to increase his revenue. While he focused on businesses, people were intrigued with the smell of baked goodies and asked if he sold them to the public. According to the Insider, he cut a hole through a wall and began selling on the sidewalk.

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Rudolph first sold the Original Glazed Doughnuts and slowly expanded the product line. During the 40s, a small chain of doughnut stores began using the Krispy Kreme method, and while the results were promising, they lacked consistency. To resolve the issue, the company constructed a plant for mixing and distribution to ensure that dry doughnuts reached the stores for sale. Through automation, Rudolph worked with his engineers to build an original Krispy Kreme doughnut-building equipment. The plant increased automation in the 1950s and achieved steady growth with the business.

Successful Acquisitions Of Krispy Kreme

 

Krispy Kreme became a hallmark in the Southeast United States in the 1950s and grew from its traditional roots to become a meeting place for family and friends. It became known for its heritage road signs and green tiles. Just as the brand had become a flagship establishment, Vernon Rudolph passed away in 1973. The company’s growth saw a small downfall, but it was purchased by Beatrice Foods three years later, as noted by Krispy Kreme. After six years, a group of investors who owned the early doughnut franchises bought back the Krispy Kreme brand to focus on rebranding.

Along with the product, Krispy Kreme prioritized offering an unforgettable experience. They commercialized the hot doughnut feel and stepped out of the Southeast US in 1996 by opening the first national expansion store in New York. Krispy Kreme turned to the West Coast and first launched in the state of California. In 1997, Krispy Kreme, an American icon of the 20th century, and some of its artifacts were installed at the Smithsonian Museum on its 60th anniversary.

Going Public And Growing The Legacy

 

At the start of the 21st century, Krispy Kreme held its first IPO of common stock. Within a year, they went international and opened an outlet in Toronto, Canada. Within two years, the brand went outside North America by opening stores in London, UK, and Sydney, Australia. The glazed doughnut brand has continued to expand and opened 400 stores in the Middle East, South America, Mexico, Asia, and Turkey. While the brand was steady, Krispy Kreme was offered a takeover by JAB Holding Company, a German conglomerate. As mentioned by Fortune, the seizure was accepted with a 25% stake in the business for a valuation of $1.35 billion.

Through celebrity endorsements, Krispy Kreme has seen a rise in its sales. Several notable celebrities have been long-time brand ambassadors for Krispy Kreme, including legendary basketball player Shaquille O’Neal who is often seen in their print media ads. A-listers like Jay Leno ate the doughnut while filming The Tonight Show, and model Gisele Bündchen ate the glazed doughnut before walking the Victoria’s Secret Fashion Show in 2003. Even notable politicians like former President Barack Obama have also been photographed grabbing a doughnut during his presidency. Under JAB Holding, Krispy Kreme went public in 2021 and has seen a growth in sales. As stated by CNBC, the company saw a 33% rise in sales by February 2022 to $371 million from a projected $364 million.

From a shop that opened its door to customers by making a hole in the wall to becoming one of the most beloved doughnut brands in America, Krispy Kreme paved a long way for its success through several ups and downs by focusing on creating quality products and offering the best to its customers. A brand eyed by everyone, Krispy Kreme announced its special partnership with the famous K-Pop brand BLACKPINK in 2021.

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Sources: Insider, Krispy Kreme, Fortune, CNBC

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