Can Krispy Kreme Become A Coffee Powerhouse?
The famed American doughnut company, Krispy Kreme has something on its mind and it’s not glazed, jammy or full of sugar. Okay, there may be a bit of sugar but that’s purely down to the customer and not the menu. In recent years, the company’s coffee sales have been flatter than a pancake and as all consumers know, Kripsy do not do pancakes. So now they have been turning their thoughts towards how they can boost the coffee n doughnuts experience.
Currently coffee sales account for just 5% of all revenue generated by the company across the United States.The figures are roughly equal when global sales are taken into account as the company does operate internationally in markets such as the United Kingdom. CEO Tony Thompson believes this is not enough. He wants to grow it to 10% and to take the cheap and quick coffee experience fight to rivals Dunkin Donuts, who have quietly overtaken Krispy in the coffee market.
Market Gone Stale
Thompson admits there is a staleness at Krispy at the moment when he admitted “we’ve kind of lost ground on coffee over time. It’s kind of passed us by.” This admission came despite the chain missing coffee sales estimates in 6 of the last 8 quarters.
The problem partially lies with the traditional store layout. Not with the ranks of doughnuts, the factory element or the menu of coffees which has grown to include new lines of blends and espresso-based drinks. However, these have not been backed up with strong marketing campaigns or promotions. Furthermore, the dining/drinking experience is not aligned with the modern café experience.
Playing Catch Up
To this end, Thompson is trialing new layouts and functions, subtle changes to the winning formula to try and address the problem. This includes increasing the number of plug sockets near tables and free WiFi for customers. Their idea is to create an environment people want to stay in and consume in rather than pick up quick bites and leave.
Taking another nod from traditional barista style coffee houses and cafés, Krispy will also feature chalkboard coffee menus at their ordering points. While this sounds nice in principle, it remains to be seen as to whether consumers will embrace these cosmetic changes or see through them. After all, the basic dining experience will change little, the food and drink selections will remain consistent as will the overall decor and therefore, those who go will go and those who do not, will remain stayaways. Time will tell if loyal customers will buy more coffee with these minor tweaks.
[Image Source: Krispy Kreme press photos]