Profiles

The Joy of Koffee

Tea and biscuits. Milkshakes and fries. Coffee and donuts. Many of the world’s most popular snack foods form a gastronomical double act with a beverage of equal or greater fame. And anybody who has watched American television knows that coffee is to donuts like the sun is to the sea. So it makes sense that coffee forms a large part of many donut retailers’ business. In fact, while an increasing level of dietary awareness among consumers in developed markets has presented donut makers with a number of challenges over the past decade, the global thirst for coffee is seemingly unquenchable. This makes the beverage an increasingly important part of the donut business. North Carolina-based donut chain Krispy Kreme is no exception to this rule. In fact, the United States chain has become one of the leading proponents of using quality coffee to enhance its business over recent years. While Krispy Kreme has been selling coffee alongside its donuts since its inception in 1937, it was in 2011 that the global chain marked a serious shift in its focus towards its hot beverage offering with the introduction of its signature coffee blends. Krispy Kreme’s coffee menu is now as extensive as any mainstream coffee chain, featuring a wide range of both hot and cold coffees, along with the full spectrum of flavoured options, from mocha to vanilla spice. Its introduction of three Krispy Kreme-branded varieties – the house blend, the dark roast and the house decaf – in 2011 marked the company’s wholehearted embrace of coffee as a key plank of its business and the segment most likely to contribute significant growth. It is a strategy that has been employed to great success by that other global donut retailer, Dunkin’ Donuts, which carries the distinction of being the largest by-the-cup retailer of coffee in the US, ahead of even Starbucks. Krispy Kreme’s President International, Dan Beem, who has been at the helm of the company since February 2014, says that the company’s coffee offering is about more than just complementing the flavour of its donuts. “Our primary focus is to create top of mind awareness and trial for Krispy Kreme coffee to improve in-store beverage attachment,” Beem tells GCR Magazine. “Additional benefits include increasing brand equity and long-term revenue opportunities.” As well as customising and expanding its range of coffees in-store, Krispy Kreme has been expanding its coffee business through external channels such as major retailers around the US. “Last year, we made consuming our Krispy Kreme coffee beverages even more convenient by beginning the introduction of ready-to-drink bottles of our Original Glazed Iced Coffee and Krispy Kreme Mocha Iced Coffee at over 900 Walmart stores,” Beem says. “This is in addition to the test introduction of packaged Krispy Kreme ground coffee in 40-ounce bags at about 100 Sam’s Club locations throughout the Southeast (of the US).” Just last year Krispy Kreme forged a multi-year partnership with Keurig Green Mountain to bring Krispy Kreme signature coffee to the Keurig brewing system. Keurig’s K-Cups are one of the US’s most popular single-serve formats, and the company has maintained its position in the American market through its extensive suite of partnerships with major brands such as Starbucks and – you guessed it – Dunkin’ Donuts. Beem says that he hopes Krispy Kreme’s entry into the K-Cup milieu will further drive engagement with customers. “We view all of these actions as part of a long-term opportunity to serve what we believe is the large number of consumers who would welcome the chance to enjoy Krispy Kreme coffee beverages even when they are not in one of our shops,” says Beem. This strategy serves many purposes, from seizing on the growth of the domestic premium coffee market, while also increasing Krispy Kreme’s reach beyond its retail locations, to giving consumers another reason to want to enter a Krispy Kreme store, Beem says. “The potential points of distribution for the at-home channel are far greater than the ultimate number of domestic Krispy Kreme shops, and can therefore serve as a catalyst for the growth of our brand and for additional sales in our retail stores.” Krispy Kreme’s coffee renaissance extends beyond its range of products. Like any company wishing to succeed in today’s increasingly sophisticated coffee market, the company had to establish new policies and training procedures to ensure the quality of its coffee offering is consistent across its stores. “We have robust training programs in place, both corporately and locally to ensure high-level training for our professional baristas,” Beem says. “Corporately, we have created and provided resources such as a detailed Barista Training Video co-created with coffee industry experts.” However Krispy Kreme’s commitment to good coffee has extended beyond the more conventional methods of corporate training. In 2013 the company, which has more than 900 stores in 24 countries around the globe, staged its own global barista competition, pitting Krispy Kreme employees from around the globe against each other in a demonstration of the company’s commitment to getting its coffee right. The three-day competition was sponsored by Italian machine manufacturer Nuova Simonelli, which is also the machine sponsor of the World Barista Championships. The competition was even judged by a former world champion. Staged alongside the company’s International Franchise Conference in Cancun, Mexico, the competition drew contestants from 13 of the 24 countries that Krispy Kreme operates in, judging them on their palates, presentation, and technical execution of Krispy Kreme espressos and “specialty drinks”, with the eventual winner hailing from the Philippines. The event was held again in 2014, signalling the company’s commitment to the concept. Krispy Kreme baristas have also participated in local barista competitions, Beem says, and the company encourages involvement with the broader coffee industry to keep driving improvement. “Our partners have fantastic internal programs locally, for hands-on training, often through partnerships with local coffee industry experts, which we are very supportive of.” In addition to these practical efforts, Beem says, is a focus on the less tangible emotional rewards that a strong coffee offering can bring to the company and its customers: “We believe that sharing a ‘cup of joy’ alongside our doughnuts is just another way we can live out that mission every day, around the world.” GCR

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