What is in this article?:
- New Krispy Kreme design targets coffee sales
- Maintaining the brand's identity
A prototype restaurant incorporates a new layout, a barista and a revamped ordering process
Krispy Kreme's new unit near its Winston-Salem, N.C., home is specifically designed to encourage more coffee sales.
Coffee is a difficult business for a restaurant chain to break into. Just ask Krispy Kreme Doughnuts Inc.
The venerable doughnut chain has long looked to increase its sales of coffee because customers drink coffee a lot more than they eat doughnuts. Yet coffee is only 5 percent of Krispy Kreme sales, even though coffee goes with doughnuts like, well, coffee and doughnuts.
But now the chain hopes it has the key to change that. Krispy Kreme has opened a new restaurant near its Winston-Salem, N.C., home that is specifically designed to encourage more coffee sales. The layout is different. The restaurant has a barista. Seats and free Wi-Fi are designed to encourage people to linger.
In addition, Krispy Kreme is going to test minor remodels of its counter that executives hope will encourage more coffee sales.
“Coffee is more than just adding it to your menu,” Krispy Kreme CEO Tony Thompson said at the ICR Conference Wednesday. “There are many different aspects of coffee to the experience. We’re going to focus on enhancing the overall customer experience.”
There’s been pressure on Krispy Kreme to sell more coffee at its shops for years, especially as competitors — notably Dunkin’ Donuts — have shifted from doughnuts to more beverages over the years.
Thompson said that years ago, Krispy Kreme had been making some progress in selling more coffee. But then the company started having some problems beginning in 2004. Sales fell dramatically, the company missed earnings estimates and franchisees shut down locations.
As that was happening, the company focused more on staying afloat than on selling more coffee. “We went into survival mode,” Thompson said. “No investments were made, and resources were depleted.”
As a result, he said, “Coffee just passed us by.”
While it’s traditionally difficult for chains to break into the breakfast daypart, Thompson is convinced he can convince customers to buy more of the chain’s coffee. And once they try it, they’ll be more likely to get it again. “People will try other coffee,” he said.
The new location is designed to encourage cashiers to sell more coffee, making the coffee more prominent and “engaging other senses” by grinding coffee, for instance. The atmosphere aims to be more inviting and more welcoming for customers to linger and do homework.
The remodel will be tested in two locations before it’s expanded to other locations afterward.