Krispy Kreme has essentially perfected the doughnut making process by focusing on being operationally efficient. They are dogmatic about the quality of their doughnuts from their proprietary flour recipe to their automated doughnut-making machines. Their whole company has been focused on the discipline of delivering a better doughnut. And that focus has resulted in Krispy Kreme being rewarded financially on both Wall Street and “Main Street.” Investors and customers alike are enamored with the Krispy Kreme “experience.”
A recent Chicago Tribune article, referenced below in Paul’s post , details how Krispy Kreme is expanding their coffee offerings in hopes of driving sales and lessening their reliance on doughnuts bringing in all the dough. In short time, Krispy Kreme has doubled their coffee sales by improving the quality of their brewed coffee and offering more variety in brewed coffee flavor profiles.
But now Krispy Kreme wants more … they are attempting to further increase coffee sales by expanding into serving espresso drinks and ice-blended coffee drinks.
Doing so will rattle the operationally efficient system that Krispy Kreme has perfected. Mass producing doughnuts is one thing, mass customizing espresso drinks is something else entirely.
Krispy Kreme relies on a machine to mass produce doughnuts.
Krispy Kreme will need to rely on an employee to mass customize espresso drinks.
This is a radical shift in employee behavior for a company that has been designed to produce doughnuts in mass and not to prepare individual doughnuts to an individual consumer’s taste.
To mass customize espresso drinks and ice-blended coffee drinks, Krispy Kreme will need to train individual store employees to expertly and efficiently handcraft these drinks one at a time. Sure, Krispy Kreme can install automated espresso machines to extract the espresso and to steam the milk. But the Krispy Kreme employee will still have to prepare individual drinks to individual consumer orders. (Take it from a former Starbucks barista, it ain’t that easy.)
A seemingly easier path, and one closer to the Krispy Kreme’s core competency, would be for Krispy Kreme to develop a process by which they could mass customize doughnuts to individual orders. Think about how remarkable it would be if you could walk up to a Krispy Kreme counter and order a one-of-kind doughnut prepared to meet your tastes exactly.
At Krispy Kreme, doughnuts will always be the core and coffee will always be the opportunity.
Only time will tell if the coffee opportunity distracts Krispy Kreme to the degree that it erodes their core and ultimately hampers the Krispy Kreme experience.