Dive Brief:
- Krispy Kreme is breaking out of foodservice to produce a line of packaged foods sold at convenience stores in the U.S.
- Through a partnership with TSW Foods LLC, Krispy Kreme will have a national c-store distribution network in place for its line of sweet snack foods, such as snack bags, honey buns, and single-serve pies.
- Krispy Kreme also recently debuted a line of Coffee Thins, an edible coffee snack, in select convenience stores and retailers in the Southeast.
Dive Insight:
Competition arrives in all forms for major food and beverage manufacturers. Startups are bucking trends and using exotic and natural ingredients that appeal to heath-conscious consumers. Grocery retailers and e-commerce players like Amazon and Thrive are offering private-label brands that compete on quality, ingredients, and price.
And now foodservice retailers are getting into food and beverage manufacturing. Starbucks and Dunkin Donuts have long been competitors for coffee brands like Smucker's Folgers and Kraft Heinz's Maxwell House, and Taco Bell offers a line of Mexican food products, such as sauces and beans. Krispy Kreme is taking a different approach by arranging for distribution only to convenience stores.
This makes sense for Krispy Kreme, as its primarily yeast-based snack foods fit the profile of other baked sweet snacks commonly found at c-stores (and also distributed in a direct store delivery model). But other snack food makers that are working to build or maintain their presence at convenience stores, such as General Mills, Hostess, and Hershey, could see Krispy Kreme as a threat.
The Krispy Kreme name could edge out competitors, as the indulgence factor for a foodservice-based product may appeal to consumers more than products they normally see at the grocery store.
The snack foods announcement follows other major news for Krispy Kreme this month: it will be acquired by German investment company JAB Holding Company and a minority investor, BDT Capital Partners, for $1.35 billion. JAB Holding also announced its acquisition of Keurig Green Mountain in December as it works to build an empire of coffee and related brands, such as Einstein Brothers Bagels, Peet’s Coffee & Tea, Stumptown Coffee Roasters, and Caribou Coffee.