Krispy Kreme Files For IPO Amid ‘Indulgence’ Growth

Doughnut chain Krispy Kreme announced Tuesday (June 1) that it had filed paperwork for its proposed initial public offering (IPO) with the U.S. Securities and Exchange Commission (SEC). The so-called S-1 filing follows a draft filed in early May, and comes on the heels of the brand’s strong 2020, as other food service businesses struggled to survive through the pandemic.

“Despite the challenges faced by businesses all over the world during the COVID-19 pandemic, Krispy Kreme continued to grow, reaching the highest level of sales in our brand’s history with net revenue of $1.1 billion in fiscal 2020,” the federal filing stated, although the number of shares and the value of the IPO have not yet been determined. “This speaks to the appeal and resiliency of our brand and market.”

The announcement comes five years after the doughnut chain was acquired by Keurig parent company JAB Holding Company in 2016 in a $1.35 billion deal. Prior to that, the chain operated as a public company for 16 years following its initial public offering in 2000, before which point the company had been privately owned since its founding in 1937.

Additionally, the filing notes strength over the last several years. It reveals that, from when the company went private in FY2016 to FY2020, the brand’s compound annual growth rate was 19 percent, and that in the same period, global points of access grew from 5,720 to 8,275. Citing a figure that the “indulgence foods” category has grown 4.3 percent during the pandemic, the filing adds that Krispy Kreme aims to “capture outsized share of this attractive market opportunity.”

The news comes just seven months after Krispy Kreme competitor Dunkin’ Brands, the parent of Dunkin’ and Baskin-Robbins, went private, acquired for $11.3 billion by restaurant company Inspire Brands, owner of seven major restaurant chains including Arby’s and Buffalo Wild Wings. The deal valued Dunkin’ stock at $106.50 per share.

While Dunkin’ and Krispy Kreme began as fairly similar businesses, the two major doughnut chains have taken opposite approaches in the last several years. The former dropped the word “donuts” from its name entirely to broaden the reach of the brand,  while the latter has been leaning on the strength of its product’s appeal.

“We dedicate ourselves to providing the freshest and most awesome doughnut experience imaginable,” Krispy Kreme states in the summary of its S-1 filing, “with 73% of our surveyed customers, in a 2021 survey conducted by the Company, reporting that if they could eat only one doughnut brand for the rest of their life, they would choose Krispy Kreme.”

Further focusing the brand on its core product, the company highlights the strength of its Original Glazed doughnut, noting that this variety accounted for 64 percent of doughnut sales in 2020.

The company attributes its strength in recent years to the emotional connections it has built with consumers, in part through its feel-good initiatives such as joy-centric marketing and doughnut giveaways. The filing reads, “We believe the experiences Krispy Kreme creates drive an emotional connection with our consumers and in our local communities, resulting in a positive brand halo around Krispy Kreme.”

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