Thursday, August 08, 2002

Inventing Krispy Kreme

In Andy Serwer's recent article about Krispy Kreme Doughnuts, he writes: "I say only three types of people claim they don't like Krispy Kremes: nutritionists (your basic glazed has 200 calories and 12 grams of fat), Dunkin' Donuts franchisees, and compulsive liars." Hard to gainsay that.

This is a great story of the power of marketing. The founder of Krispy Kreme, Vernon Rudolph, bought the recipe for Krispy Kreme doughnuts from a French pastry chef in New Orleans. According to Serwer, Rudolph was a heavy drinker, and when he died in 1973, the company was sold to Beatrice. Which proceeded to run it into the ground. Only after a group of franchisees purchased the company in 1982 did Krispy Kreme begin its trek to the big time in earnest. Two marketing innovations that now define the company:

* "Everybody knows that when a Krispy Kreme store flips on its neon hot doughnuts now sign, the doughnuts are coming right off the line. Around 1980 the folks in Winston noticed sales at the Chattanooga store were going through the roof. HQ decided to send a man up to Chattanooga for a look-see. Turns out the store manager, Bob Glidden, had printed up an ordinary block sign that read hot doughnuts now. But his customers complained that he kept the sign up all the time, even when his doughnuts weren't hot. So Glidden went down to J.C. Penney and bought a window shade. When he wasn't making doughnuts he pulled the shade closed; when he was cooking, he pulled open the blind and customers streamed in. Bingo, a sales tactic was born!"

* The leader of the franchisee group came up with the idea for a "doughnut theater": "They put the doughnut-making equipment in stores so that people could see the doughnuts cook for exactly 115 seconds in 365-degree vegetable shortening, after which the precious confections plow through a glaze waterfall before curving 180 degrees around to the counter so that a salesperson can pluck a hot one right off the line and hand it to the drooling customer."