The Crispy History of Krispy Kreme
What happened to Krispy Kreme's 1st IPO? Is its history all sweet or bittersweet?
While the world was waging a war against the pandemic, people resorted to sweet and crispy doughnuts to brush off the bitterness pushed into their lives. So much so that Krispy Kreme sold doughnuts equivalent to India’s population!
1.3 billion doughnuts were sold across 30 countries, reaching the highest level of sales in the brand’s history. Thus, having proved its resilience and popularity, Krispy Kreme Doughnuts launched its second IPO on July 1, 2021. Wall Street relished the pillowy, sugary goodness with a 23.5% rise in returns right after a day of its launch.
Wait a second. Second IPO? What happened the first time around?
Hahaha… read on.
Krispy Kreme finds its roots way back in 1933 when a man named Vernon Rudolph purchased a doughnut shop from a French pâtissier.
Little did he know that the secret doughnut recipe that he had acquired, would one day become a global favourite.
Rudolph and his partner initially developed a wholesale model. They would deliver freshly prepared, tasty doughnuts to local grocery stores. But passersby couldn’t resist the sweet aroma that laced the air around the factory!
By the late 1930s, crowds began flocking towards their factory, demanding one of America’s favourite breakfast options right on the spot, fresh and hot.
Moved by the increasing popularity, Rudolph stepped into the retail business. He simply cut a hole in the wall of their factory and started selling those mouth-watering doughnuts…
As the demand grew, it became obvious that handmade doughnuts could no longer keep up with the demand. Thus, in the 1950s, Rudolph pioneered the use of tech to automate the doughnut-making process. After all, the industrialization wave swept across the US. Why should the dessert industry hold back?
And so, doughnuts were cut, proofed, fried, and glazed automatically in a conveyor system, essentially making Rudolph the Willy Wonka of the doughnut world. Fascinating, isn’t it?
He even let the public view the whole process, showing them the hygienic and proprietary tech that made the brand even more exclusive and alluring to the public.
In the years that followed, until Vernon Rudolph’s demise in 1973, Krispy Kreme expanded its array of stores across America and slowly transformed itself into a name synonymous with doughnuts.
But, the sturdy legacy that Rudolph had created started showing cracks after his death. The company was acquired and reacquired several times. Yet, the doughnuts survived them all. And in the year 2000, Krispy Kreme finally got listed on the New York Stock Exchange.
Just as things seemed to be moving upward for the company, an accounting scandal involving the then CEO, Mr. Scott A. Livengood, came to light. The stocks plummeted and the company went in a downward spiral. Krispy Kreme was bought and made private by JAB Holdings in 2016 for $1.35 billion. The new CEO, Tattersfield, drove an aggressive damage control agenda by repurchasing a record number of franchise locations. They now operate worldwide with over 9,077 access points.
With consistent year-on-year revenue growth, an increased number of establishments, and a significant rebuilding exercise, Krispy Kreme finally geared up for a second IPO.
But, are things really as glazey as their doughnuts?
Although the company has seen record revenues in recent times, profits have simply nose-dived, going down below the levels when it was acquired. Looks like JAB Holdings didn’t bother about maintaining the bottom line at all.
So what’s baking at Krispy Kreme?
Fun facts:
Krispy Kreme is not just a doughnut-making company. They also manufacture all their doughnut-making machines themselves! (So much for the unique taste).
Krispy Kreme has several Hot Light Theatre Shops that provide immersive experiences to the customers. Whenever the light is on, the manufacturing process is on full display, and doughnuts are served fresh and hot!
Krispy Kreme makes doughnut wedding towers in some countries. (Argh! I know right)
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