WINSTON-SALEM, N.C. — Even while stressing the company always wants to be “the donut king,” Jim Morgan, chairman and chief executive officer of Krispy Kreme Doughnuts, Inc., acknowledged that developing a better product sales mix will be key to future growth.
Currently, donut sales make up about 80% of Krispy Kreme’s business, and while the company doesn’t want to become a cafeteria or sandwich shop, it would like to leverage its donuts to expand product mix, Mr. Morgan told participants at the company’s annual shareholder meeting on June 12.
One of the areas that may be leveraged is beverages, which account for about 12% of sales, and more specifically, coffee, which is only about 4% of sales, he said.
Mr. Morgan said the natural partnership between coffee and donuts should lead to higher sales for the former, and the company hopes to grow coffee sales to closer to 12% of total sales during the next several years.
“If we do that, and we do that on the higher sales number, which we certainly intend to accomplish, then that would be a significant driver of our success and our profits over the next few years,” he said. “And we’re excited about the potential and we think that will only be a beginning of what we can do in beverage.”
To get to that higher sales number Krispy Kreme will be counting on its new beverage program launched in August 2011. The program features drip coffee available in three blends: house, dark roast, and house decaf.
“Our consumers are telling us that we have nailed it, that we have a wonderful group of three blends, and that they are really, really excited about it,” he said. “So now it’s up to us to get more for the consumer and more of our guests aware of it and ordering it when they order donuts.”