KRISPY KREME DOUGHNUTS

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What exactly are doughnuts ?

What exactly are doughnuts, or in the more modern American spelling, donuts ?

The original recipe of donuts is undeniably European, and it originated in the Low Countries under the name of "smoutebol", literally translated as "ball of lard" ! Around 1650 the first Dutch colonists introduced this inexpensive delicacy in America, with oil-fried dough balls, in which a nut was hidden. The British obviously couldn't pronounce the word "smoutebol", and so they soon renamed the combination of dough and nut to donut.

Along the way, the nut got sidetracked, because they were quite expensive. Around 1847 young Gregory Hanson hit upon the clever idea to flatten the dough and to make a hole in the middle, so that the dough would be fried completely on all sides.

For many years the brand Dunkin 'Donuts was market leader in practically the whole of the U.S. American movies with donut-eating policemen are legion, but it does underline just how much and for how long this delicacy has been introduced.

Donuts are very tasty when fresh and warm, but after one day they rapidly lose their taste. The Krispy Kreme donuts are somewhat less heavy and greasy, and slightly longer resistant to aging. We won't even think of counting the calories...

The Krispy Kreme Story

The official story of Krispy Kreme, like most success stories, is heavily exaggerated, and the somewhat less fortunate passages usually get cloaked with the mantle of oblivion... So here is my version!

The Origin

In 1933 Vernon Carver Rudolph and his partner bought a donut shop in Paducah (Kentucky), from a New Orleans French Chef. The sale included a secret recipe for yeast-raised donuts.

Krispy Kreme 1The operation of this store never became an overwhelming success, because as soon as in 1935 they moved to Nashville (Tennessee). Then Rudolph and a few family members opened several shops in Charleston (West Virginia) and Atlanta (Georgia), for the sale of donuts to local groceries.

Either these shops didn't work out, or his marriage didn't, but one way or the other, in 1937 Rudolph left his partner, his family and his shops, to establish his "own" donut shop elsewhere. He drove to Winston-Salem (North Carolina) with two friends, his recipe, a little suitcase and the name Krispy Kreme Donuts. Between the three of them, their combined fortune amounted to exactly 25 dollars...

With this money, they managed to rent a building in Salem. Since Rudolph had no money left to buy the ingredients, he sweet-talked a local retailer into a loan, until his donuts would be finished!

On July 13, 1937, the Winston-Salem shop produced the first Krispy Kreme donuts, again destined to grocery shops. But soon individuals started coming by, to order their own donuts. Quick-thinking Rudolph immediately made a large hole in the wall of the building, to sell directly to passers-by ! The story doesn't mention whether this improved the relationship with his landlord...

Machine Technology an Franchising

In the 1950's they gradually developed machines to mechanize their extensive manual labor. Eventually the cutting of the dough, the frying, the glazing and the stacking were fully automated. The year 1962 saw another leap forward, when the dough was not cut anymore, but blown at high pressure.

Vernon Rudolph died in 1973, and three years later his heirs sold the company to the Beatrice Foods Company of Chicago. Though the headquarters remained in Winston-Salem, Beatrice Foods started selling franchising licenses.

In 1982 a group of franchisees bought the Krispy Kreme Donut Corporationback from Beatrice Foods, and gradually they became quite well-known throughout the southeast. In 1995 they opened their first store outside of their region in Indianapolis, and afterwards everything went faster with New York City in 1996 and Los Angeles in 1999.

In 1997 Krispy Kreme was solemnly recognized in the American community, as its products were displayed in the Smithsonian National Museum of American History in Washington, D.C. Only in America!...

The Stock Market

Krispy Kreme 2 logoIn 2000 Krispy Kreme made excellent use of the stock market mania, by issuing 13,800,000 shares at $ 5.25 per share on the NASDAQ, with the symbol KREM. The company raked in a fabulous 72 million dollars in working capital ! As early as in 2001 the major shareholders sold 9,313,300 shares at $ 16.75, making them a handsome profit in one year of a measly 107 million dollars...

The company also sold 1,086,700 shares, which gained them 12.5 million dollars. They immediately put it to good use by buying Digital Java, a small Chicago coffee company. The plan was to follow up on the success of the coffee shops, and to offer a complementary product to their donuts.

Somewhat later the NASDAQ began its steep decline, and the shares were hastily transferred to the New York Stock Exchange (NYSE), with the symbol KKD.

Technological Progress

Suddenly there was enough money available for research, and almost immediately a fully automatic system was developed, the Krispy Kreme Hot Donut Machine. On one side the prepared (and still secret) mixture is injected, and on the other side the completely finished donuts roll out on the conveyor belt. This enormous machine is definitely worth a visit. It is always installed behind glass, so that customers have a complete view of the entire fabrication.

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In 2001 the first store outside of the USA was opened in Mississauga, just outside Toronto (Ontario) in Canada. New stores were scheduled to open in Canada, Mexico, Australia and Great Britain. By 2002 there were more than 285 stores in 38 states, the daily production was up to 7.5 million donuts, or some 2.7 billion per year!

Each store can produce at least 3,000 donuts per hour, and the larger stores even go to 12,000 per hour. Every 22 seconds the entire Krispy Kreme group produced a stack of donuts, as high as the Empire State Building!

The latest craze was serving donuts on wedding receptions. Even the coffee did well, or rather spouted well, because in 2002, over 100 million liters of coffee were served...

Krispy Kreme Range

The best sold doughnut is the Original Glazed, but there are other varieties such as Chocolate Iced, Sprinkled, etc., and the inevitable cinnamon flavors.

Other donuts are filled with a kind of currant jelly (Raspberry Filled) or cream, and finally there are cake-versions. It is interesting to watch customers minutely check out the offerings, and then see them walk out of the store with a beatific smile, and one dozen or more Krispy Kremes under the arm...

Given the better information and the public's concern about the dangers of fat and sugar, and probably also because of the imminent economic crisis, the consumption of donuts has decreased dramatically.

This development put an end to the extraordinary expansion of Krispy Kreme. Many franchising licenses have meanwhile been closed or went bankrupt, and the end of the downward trend is nowhere in sight.

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Video : Krispy Kreme

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