Save Krispy Kreme!

Sometimes, good companies make bad decisions.

Back in the 80s, you probably remember "New Coke" - one of the worst marketing disasters in history, and something that is taught to every student in every business education program in the country.  "New Coke" was a case where the Coca Cola Company didn't understand the appeal of their own flagship product.  They reformulated it, did all the right marketing stuff - focus groups, taste tests, etc - and they launched it to the great dismay of Coke fans everywhere.

Sure, some people liked New Coke, and I can only assume that it was very successful in early taste tests.

But you can't change something like Coke.  They learned their lesson, re-introduced Coke as "Coca Cola Classic", and eventually phased out the miserable failure that was "New Coke".

Which brings me to my point.

It's not exactly the same story, but when I moved to the Triangle (Raleigh/Durham/Chapel Hill) in 1998, I discovered a wondeful donut shop called Krispy Kreme.  Their "flagship product" was a standard glazed donut.  They had a machine that pumped them out one after the other, and you'd go to the Krispy Kreme store and get them warm and fresh off the conveyor belt.  Krispy Kreme donuts were so much better than other standard donuts that they became a huge phenomenon.

Then, during the dot com heyday, Krispy Kreme went public.

And somewhere along the way, they decided they could go big time by selling donuts in grocery stores - either boxed or in a display case where people could pick and choose.  Not only grocery stores, but gas stations as well.

what they failed to realize was that much of the appeal of the Krispy Kreme Donut was getting them warm and fresh.  Sure you could nuke 'em for 10 seconds and they'd be warm, but it's just not the same.  Granted, I still think the Krispy Kreme glazed donut is the best donut out there, but it's not light years better when you get them in a box, as I did this morning.

Krispy Kreme was born right here in North Carolina - Winston-Salem, to be exact.

In the entire Raleigh/Durham/Chapel Hill area, there is but one Krispy Kreme donut store.  In fact, there are only 10 in the entire state of North Carolina.  It is my opinion, that there should be at least 10 in the Triangle alone.  I'd open one myself in Apex, except that their web site says there are no franchise opportunities anywhere in the United States.

Their stock has dropped from the $40/share down to around $7 today - in large part because investors have probably realized that with their current strategy, Krispy Kreme is NOT going to take over the world.