On a 1934 World’s Fair poster, doughnuts were named “the food hit of the Century of Progress.” In an article in Smithsonian Magazine about the history of doughnuts, early Krispy Kreme (Tii:DNUT) customers were enamored with the mechanical process of the novel doughnut machine. People felt that eating doughnuts made them a part of the future. For a Depression-era customer, the treats were within reach at 5 cents (or less) per doughnut.

When retail shareholders think of doughnuts, Krispy Kreme is often the first name that comes to mind. Krispy Kreme creator Vernon Rudolph’s relationship with doughnuts began when he and a friend bought a “secret” yeast-raised doughnut recipe from a French chef based in New Orleans. Smithsonian Magazine said that when starting out, Rudolph and a friend — with just $25 between them — borrowed ingredients (potatoes, sugar and milk) from a hospitable grocer and endured the heat of July in North Carolina to bake their doughnuts. Word got around, partially due to the delicious smell that began to charm passers-by, and Randolph began to make regular deliveries of Krispy Kreme doughnuts to local grocery stores. Out of a rented space in Winston-Salem, North Carolina, in the same year that Joe Louis was the heavyweight champ, Amelia Earhart disappeared over the Pacific and the Golden Gate Bridge was completed, Randolph produced the doughnuts that would become loved by customers globally.

The company standardized its product in the late ’40s by building a central manufacturing plant that would make the Krispy Kreme mix to distribute to a growing network of doughnut and coffee shops. Customers delighted in being able to watch doughnuts being made, and by the '60s, Krispy Kreme stores were a familiar feature throughout the southeastern states. Stores were easily recognizable with green-tiled roofs and glowing ‘‘Hot Doughnuts Now’’ signs. After Rudolph died in 1973, the company was reorganized for a 1976 sale to Beatrice Foods. In 1982, a group of Krispy Kreme's early franchisees reclaimed the company. The reach of their franchise locations has helped the company cater to a diverse customer base and discover opportunities in different markets.

The market can be been challenging for a business like Krispy Kreme that relies primarily on two products: doughnuts and coffee. Since the company went public in 2000, they have been exploring partnerships, like one with Walmart (Tii:WMT) where the doughnut-making experience was brought into Walmart Supercenters. The company was public for 16 years and was then purchased by European company JAB Holding (owner of several food chains including Panera Bread and Pret A Manger) for $1.35 billion, and Krispy Kreme became private once more. 

Since being taken public again in 2021, Krispy Kreme has collaborated with privately owned candy maker Ferrero to make two original Butterfinger doughnuts and with chocolate giant Hershey (Tii:HSY) to make three doughnuts that incorporate Reese's candy:  “Peanut Butter and Choc,” “Peanut Butter Cheesecake” and “Peanut Butter Choc Brownie.” In the fall of 2023, Hailey Bieber’s beauty line, Rhode Skin, launched a limited edition peptide lip treatment that was directly inspired by Krispy Kreme’s famous strawberry glazed doughnut.

Collaborations like these have encouraged Krispy Kreme to focus on growing e-commerce interfaces, adding delivery and rewarding customers for ordering online. Third-quarter 2023 earnings show that e-commerce had risen to make up 19% of sales, and Krispy Kreme’s digital business had grown to $4.8 million. Krispy Kreme’s COO said in an earnings call in November 2023, “Our brand continues to grow and over-index with valuable younger consumers, with 18- to 34-year-olds now representing 40% of our U.S. consumer base, up from 33% a year ago.” Gen Z customers adept at discerning influencer culture have found Krispy Kreme’s digital presence attractive and relevant. Availability and ordering ease help sales with younger customers. Krispy Kreme has responded by making products available through more than 13,000 points of access.

Krispy Kreme, with headquarters not far from where it started in Charlotte, N.C., is now operating in 2,100 shops and has locations in more than 35 countries. Products are sold in standalone locations as well as supermarkets like Walmart and Target (Tii:TGT), gas stations, and convenience stores in the U.S. and Canada, as well as in Australia's BP Service Stations and BP Travel Centers. The humbly priced Krispy Kreme yeasted doughnut with a distinctive light glaze is earning Krispy Kreme $1.63 billion a year in revenue.