Milling & Baking News - June 28, 2011 - 12

Business 

Krispy Kreme expanding well beyond ‘hot glazed donuts’
WINSTON-SALEM, N.C. — Customers familiar with the “Hot Now” signs that have been a trademark of Krispy Kreme Doughnuts Inc. and its signature glazed donut are in for a change later this year and into 2012. The changes will kick off with an upgraded coffee blend in September and will expand to include other beverages as well as food products. The changes are designed to drive incremental visitation, according to the company, which posted its best quarterly profit since 2004 when it recorded net income of $9,171,000 on sales of $104,600,000 in the first quarter of fiscal 2012 ended May 1. In a recent quarterly conference call, Jim Morgan, chairman, president and chief executive officer of Krispy Kreme, said coffee and other beverages combined are approximately 12% of in-store sales. By comparison, coffee and other beverages account for about 60% of system-wide sales at Dunkin’ Donuts, he said. “While our business model is very different from theirs in many ways, there is clearly a significant sales and profit opportunity if we can leverage donut sales with an add-on coffee or other beverage purchase,” Mr. Morgan said. “If we are going to succeed on this front we know that our beverage lineup, and particularly our coffee, needs to better complement the world’s greatest donuts. To get there we are in the process of upgrading our coffee blends and specialty beverage products such as chillers, espressos and hot chocolate so that we can offer our customers beverage/donut combinations that are second to none.” Mr. Morgan said Krispy Kreme will begin launching the new products in stages, starting with coffee in September. “Unlike in years past when I believe we were inadvertently our own worst enemy in coffee and other beverages by simply waiting for customers to come to try these

products, this series of rollouts will be very different,” he said. “In fact, we will be complementing a well-thought out marketing plan with a consumer awareness campaign. We will also leverage the more than 3 million Krispy Kreme fans on Facebook.” Following the coffee launch, Mr. Morgan said Krispy Kreme will make other changes to its menu in an effort to attract more customers throughout the day. “We need to drive incremental visitation by focusing on increasing sales during our relatively slower dayparts, particularly 11 in the morning to 2 in the afternoon, and by broadening our menu and traditional dayparts as well,” he said. “While we don’t currently view Krispy Kreme as a lunch destination, over the long run we are committed to creating complementary products to our donuts that will improve transactions during these under penetrated hours.” In addition to changes to its beverage lineup, Krispy Kreme recently told Bloomberg that other new products it expects to add to its menu in 2012 are oatmeal and yogurt. MBN showcasing our 112-year heritage in the grain milling business.” In 2010, Bay State launched a healthy grain initiative, with the goal of developing flour and dry blended products with increased whole grains content, the development of ingredients that address specific health issues and utilization of specialty grains to create new tastes and textures. Doug DeWitt, vice-president of customer and business development at Bay State, said the Rothwell GrainEssentials Center will be at the heart of the company’s healthy grain initiative. “We really anticipate having our customers working side by side with us developing great tasting products that meet the requirements of the National School Lunch Program, 2010 Dietary Guidelines and health conscious consumers,” he said. MBN efficiencies, as well as create space for new lines in the future. This also improves our distribution hub and sets the stage for further expansion in the marketplace. We are very excited as this is another step in becoming an integral part of the Idaho marketplace and is a platform for future job growth in the Nampa/ Boise community.” MBN
bakingbusiness.com / world-grain.com

Health and wellness to be focus of Bay State Milling research center
QUINCY, MASS. — Bay State Milling Co. has begun construction of a new 4,000-square-foot innovation center at its headquarters in Quincy. To be named the Rothwell GrainEssentials Center, the facility will be designed to create an “environment that stimulates creative design and delivery of grain-based foods,” the company said. Named in memory of Bernard Rothwell II, who headed the company for many years, the center will focus on Bay State’s value-added flours and grain blends with a strong tilt toward health and wellness, the company said. Small scale commercial grade equipment will be installed in the center to produce a range of grain-based

Bay State Milling headquarters in Quincy

foods, including bread, pizza, pancakes, breadings, tortillas and more. “We are really excited about building this state-of-the-art innovation center in Quincy,” said Pete Levangie, president and chief operating officer at Bay State Milling. “It will allow us to bring all functions together to build products and relationships with our customers, while

Franz doubling size of bakery in Idaho
BOISE, IDAHO — Franz Bakery, the largest independent, family-owned bakery on the West coast, is doubling the size of its Nampa, Idaho, bakery to 50,000 square feet from 25,000 square feet. Franz purchased the Harvest Classic Bakery in Nampa in August 2010, and
12 / June 28, 2011 Milling & Baking News

since the purchase has added a retail outlet store on site. “The expansion at our Nampa bakery is exciting for many reasons,” said Todd Cornwell, vice-president of sales for Franz Family Bakeries. “We’re able to upgrade our current production lines to improve

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Milling & Baking News - June 28, 2011

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