Increasingly, consumers expect to be able to get more of their needs met all at once, and food businesses that only offer one kind of product risk losing out to competitors.
Krispy Kreme, for one, has built its following on selling doughnuts. However, with its competitors diversified into other categories, the Charlotte, North Carolina-based sweet shop chain, which has more than 1,800 shops around the world, is now growing its indulgent treat offerings. On Tuesday (June 21), the doughnut chain announced the launch of soft-serve ice cream and milkshakes.
The frozen treats will be first available in 10 U.S. markets: Charlotte, Greensboro and Winston-Salem in North Carolina; Greenville, South Carolina; Norfolk and Newport News, Virginia; Charleston, West Virginia; Nashville and the Tri-Cities area in Tennessee; and San Antonio, Texas.
“The introduction of Original Glazed Soft Serve Ice Cream is a big day for Krispy Kreme and our fans,” Krispy Kreme Chief Marketing Officer Dave Skena said in a statement. “Our fans love Krispy Kreme doughnuts, and they also love rich, creamy ice cream. We’re confident their love of ice cream and for Krispy Kreme is going to go to an entirely new level after they experience these deliciously unique shakes, cones and cups. We’re thrilled to begin our rollout on the first day of summer.”
Takin’ on Dunkin’
The brand’s main competitor in the doughnut space, Dunkin’, has been offering its items in co-branded shops with ice cream chain Baskin-Robbins since the mid-2010s, creating the expectation for consumers that they will be able to purchase ice cream and donuts in one spot. While Dunkin’ and Krispy Kreme operate with very different business models, with the former a private company that functions as just one part of Inspire Brands’ portfolio and the latter its own publicly traded company, this ice cream launch suggests that Krispy Kreme is learning from its rival.
The Loyalty Advantage
One leg up that Krispy Kreme has on Dunkin’ as far as becoming consumers’ go-to destination for both ice cream and doughnuts is its loyalty program. Inspire Brands currently does not offer a cross-brand loyalty program, such that consumers cannot be rewarded for their Baskin-Robbins purchases through their DD Perks (Dunkin’s loyalty program) accounts. However, Krispy Kreme can offer points for ice cream purchases through its Krispy Kreme Rewards app.
Loyalty programs go a long way toward driving spending and building consumer habits, especially as inflation anxieties have consumers seeking out deals and discounts.
“We will take further pricing as needed while selectively using discounts and promotions with our over 10 million loyalty customers,” Krispy Kreme Chief Operating Officer and Chief Financial Officer Josh Charlesworth told analysts on a call in May.
According to data from the 2022 Restaurant Friction Index, a PYMNTS and Paytronix collaboration, which drew from a survey of a census-balanced panel of more than 2,100 U.S. consumers about their restaurant ordering habits, 43% of diners say that they would be more inclined to purchase from restaurants that offer loyalty rewards. Additionally, the study found that offering a loyalty program has become the norm, with 57% of restaurants doing so.