“There’s going to be a lot of businesses that are hunkering down and just looking to get through this. This is our moment; we stand for joy.”
This was Jamie Dunning’s first clarion call to the Krispy Kreme team after taking up the helm as president and managing director for the UK and Ireland in July last year. It came at a time when costs were rising rapidly and many firms, including Krispy Kreme, were seeing profits eroded as a result.
We stand for generous joy and now’s our moment to rise and be there for consumers in many guises
But when the going gets tough, the tough turn to doughnuts – that is the hope at least.
“We stand for generous joy and now’s our moment to rise and be there for consumers in many guises,” he explains. “That’s easier said than done but it’s fundamentally been our guiding light.”
Dunning took over from Richard Cheshire, who had spent two decades in the driving seat. He is used to heading up joyful brands having previously worked for Mars Retail Group and Cadbury, although he admits Krispy Kreme “was the least on my radar, but the most pleasant surprise”.
Having checked with his teenage children on the “cool factor” and undertaking incognito visits to see if the joy culture was finding its way to the frontline, Dunning embarked on the new adventure.
“It really is a brand that by any measure of trust, love, and relevance it’s up there with the likes of Cadbury and other well established British iconic brands, and yet it’s a business so much smaller. That’s, that’s my kind of business,” he adds.
Just over a year into the role, and with Krispy Kreme celebrating its 20th anniversary in the UK, Dunning is keen to talk about what the future has in store for the iconic doughnut brand.
This year represents the first of Krispy Kreme’s next five-year plan and with Dunning on board it is time to assess “what of our past needs to be left in the past, and what we embrace for our future”.
The crux of this? “Never lose sight of what you are as a brand and never get complacent that you always remain worth the price you’re asking for,” he says. Dunning is open about the fact that headline prices have increased over the past year in line with the rest of the baking category but believes that as long as the brand continues to tune into consumers’ wants and needs, it can navigate the current economic climate and continue to grow.
Krispy Kreme vs the competition
Doughnuts, like cupcakes before them, are capturing the nation’s imagination with several newcomers looking to take a bite out of the market – from TikTok savvy Project D to Donutelier, which is serving up ‘the most luxurious doughnuts’ in London, and healthier proposition Urban Legend.
We’ve made the market an attractive place to compete in
“Greggs have done a lovely job as well,” Dunning adds, praising the “well presented, price accessible” options made available by the bakery behemoth.
He isn’t worried though. In fact, he regards competition coming to the market as a great compliment. “We’ve made it an attractive place to compete in,” he affirms, adding that increased competition means there is more choice for consumers although brands will have to compete harder for share of mind. “It’s on us to continue to raise our game,” he adds.
On a strategic level, Krispy Kreme believes it isn’t competing with the above doughnut firms. As Dunning states: “our vision is to be the most loved sweet treat brand,” putting it up against the likes of Cadbury and Mr Kipling, to name a few.
Doughnut distribution
So how is it going to achieve this? Putting more doughnuts in the hands of more consumers, for a start. Dunning says he is “comfortable” with the current rate of frequency, which sees doughnut lovers tuck in on average three to four times a year, but with less than a third of the UK living or working close to a Krispy Kreme outlet there is huge potential for growth.
“It’s important to put on the record that we are comfortable with the idea that we can grow responsibly,” Dunning says, adding that many of Krispy Kreme’s occasions are sharing ones.
At present, there are around 1,750 points of sale across the UK and Ireland with the vast majority of these in supermarkets and forecourts, as well as around 130 shops of its own. This year Krispy Kreme has opened another 78 places to buy its sweet treats although this is described as a “slower year”.
Over in the US, Krispy Kreme is trialling selling its doughnuts in selected McDonald’s stores to expand its reach. While Dunning says there are “no specific plans for that in the UK” he does say it “raises the question of where and with whom is there a complimentary mission or occasion for us to be present where it works for both brands, and it works for consumers”.
All outlets in the UK and Ireland – whether operated by Krispy Kreme or a third party – are serviced by a network of 16 production hubs and around 100 distribution sites.
“It’s a model that looks easy on paper but is very hard to replicate when your ultimate commitment is the freshest doughnuts,” Dunning notes. “If you get that wrong, you have quite a waste problem on your hands. If you get it wrong the other side, you run out of doughnuts too quickly.”
Innovation nation
That commitment is unwavering as Dunning asserts “we will never veer away from fresh doughnuts made today and distributed overnight for consumption tomorrow”.
The toppings, fillings, format, and even dietary requirements of the doughnuts will certainly change though as Krispy Kreme looks to entice consumers. “There is no end of to the limit on colour, flavour, brand mashups, and the spectacular.”
Dunning is a believer in consumer choice – evidenced by the launch of Krispy Kreme’s lower calorie range in January – but admits that consumers seem to take a “if I’m in, I’m in” approach to doughnuts. “I don’t think the doughnut category is ever going to persuade consumers that it’s good for you. There’s no point and we’re very clear that compromise on any dimension of quality and taste is a non-starter,” he believes.
That said, the business is “very respectful and in support of” regulation such as HFSS, which has seen Krispy Kreme cabinets move into some retailers. It has also made a commitment to ensure over 70% of its portfolio are less than 320 calories each by 2025. The Original Glazed, which represents a significant proportion of sales, comes in at 195 calories which is a “good start” on this mission.
Joy and generosity
With the innovation in hand, there’s just the matter of loyalty to contend with.
“One of the most important cultural icons we added to the mix… was to simply add an ‘act of joy’ button to our checkouts in retail stores,” Dunning explains. The button allows a “Krispy Kremer” to make someone’s day by giving them a free dozen doughnuts. This is actively encouraged with the business setting a minimum target for employees to help embody that “generous joy”.
This saw tens of thousands of doughnuts being given away during the FIFA Women’s World Cup, garnering positive publicity through traditional media outlets and social channels in the process.
“We have chosen to positively embrace the social chat and engaging with influencers – that’s been a fun ride so far,” Dunning says. “We know that a significant proportion of our consumers in the next five years will be of Gen Z, and that’s where they engage with brands.”
The digital space is a key arena for Krispy Kreme as it looks to ensure a “continuous, omni-channel experience” for consumers. As such, it has continued to invest in the Krispy Kreme rewards programme which is “the most generous rewards programme in the consumer space”. Doughnut fans earn ‘smiles’ on the app every time they shop, allowing them to unlock member-only offers and discounts. There are plans to enable consumers to spread the generosity, in terms of how they spend their ‘smiles’ with donations to charities and sharing with friends and family on the cards.
“At its best, that joy and that generosity are present at the heart of the culture and that is in the selflessness, the team working, the storytelling and in our retail environment,” Dunning adds. “At the end of the day, we make a difference to people’s days.”
No comments yet