So, is this a good time to take a risk on Krispy Kreme? Time to call or click your broker? They are scrapping the bottom of the donut glaze barrel. Their stock price has hit a record low. Their paying $400,000 a month to their turnaround people. Will they throw in the towel or will they rise again? It's a rich and yeasty question is it not?

They've over extended and diluted their brand by boxing up the goods and making them available old and cold on convenience and grocery store shelves everywhere. They have also announced some serious staff cuts that will necessitate a change in strategy. To early to see what they will endeavor to do.

Another factor is the target of their blame for their troubles. The low-carb diet craze that has swept America. Craze over? Seems the hype-o-meter has quieted a bit on the whole low-carb thing. While America continues to have obesity issues there still is room for sweet treats.

The key is for Krispy Kreme to understand that they are selling more than just super sweet doughnuts. They need to understand that they are selling experiences. The excitement in the eyes of a child when told they're going to go get Krispy Kreme Doughnuts. The experience of presenting a box of KK Doughnuts to someone who loves them. The experience of a warm sweet doughnut on the tongue. Savoring the last bight of the last one in the box. These are the moments they are selling. Not just another box of doughnuts on the shelf.

Related:
Thinking About Krispy Kreme
Frozen Carb Loading at Krispy Kreme
Krispy Kreme Hits a Doughnut Hole

Comments

[james]

I totally agree;

"They've over extended and diluted their brand by boxing up the goods and making them available old and cold on convenience and grocery store shelves everywhere. They have also announced some serious staff cuts that will necessitate a change in strategy. To early to see what they will endeavor to do."

Aghhhhhh! When will people learn that business is no longer simply about playing with words and numbers, its about being real! Its not as if this is a raraty either - I am in China and its a total bloody disaster, the people are busy prostituting thier company name (face it, there are no real brands here) and learning to play the numbers. Lets keep "managing" the businesses. God help us!! where is the leadership Dammit!!!!

China Tactics: http://radio.weblogs.com/0144104/

[Claudia]

Yup - you said a mouth full. And NOT a mouth full of old, cold donuts. Anyone who is a FF aficionado, as I am, knows that the ONLY way to eat KK is hot off the belt. I lost count of the times I walked away from the KK at the World Trade without my favorite hit, plain glazed, as there was nothing on the belt. Even lukewarm was unacceptable. Oh the total bliss in biting into that warm, sticky sweet and inhaling that incredible aroma (I would wear that scent as a perfume if they bottled it). This is not something you can mass market. The allure of KK is in the ephemeral not the concrete. But we all know you can’t pin a profit prediction on the transience of a hot donut. So what’s a company to do when it needs to satisfy the street? I don’t have a clue. I just wish they’d turn back the clock so I could once again fantasize about the serendipity of being in the right KK at the right time; just when the donuts are coming off the line.