May 05, 2021 at 06:40PM

Krispy Kreme confidentially submitted paperwork with the Securities and Exchange Commission (SEC) for an upcoming initial public offer (IPO). The company, owned by JAB Holding Company, was acquired by the German investment conglomerate in 2016 in a $1.35 billion deal, taking the company private 16 years after the company first went public in 2000, selling three million shares at $21 a share. Now, five years after going private, Krispy Kreme is returning to the stock market.

In recent months, the company’s major public-facing initiatives have been limited to announcing giveaways and limited-edition menu items. In addition to Krispy Kreme’s highly publicized move to give free doughnuts to those who have been vaccinated, the company also gave free doughnuts to those who voted on Election Day, and gave free coffee and a free doughnut to rewards program members on National Coffee Day. Beyond that, company announcements have primarily been limited to seasonal doughnuts such as spring-themed mini doughnuts, Valentine’s Day love note doughnuts, and even a one-day-only Mars doughnut to celebrate the landing of NASA’s Perseverance Rover.

These feel-good initiatives have combined to establish Krispy Kreme’s reputation for generosity and celebration, and they are the product of Krispy Kreme’s all-in pandemic strategy. As Chief Marketing Officer David Skena told PR Week in an interview, “We had to decide if marketing was something we wanted to invest in if stores can’t be open.”

Ultimately, Skena continued, the company decided to “go on the offense” and to “identify the role we could play during this tough time.” Specifically, he said, “We can share joy…When you are being generous and kind, the media tends to share that story.” In response to Krispy Kreme’s Acts of Joy campaign, the company received 530,000 social media engagements, and sales have been positive.

Krispy Kreme’s IPO news comes six months after competitor Dunkin’ went private in an $11.3 billion deal, as it was acquired by Arby’s and Buffalo Wild Wings owner Inspire Brands. The most recent indication of how major doughnut chains have performed during the pandemic is Dunkin’s Q3 2020 earnings — the company’s U.S. revenues remained positive, though not dramatically so, up 0.9 percent year over year.

While it’s true that many consumers have been seeking out comfort foods throughout the pandemic, the actual market for bakery items has not changed very much over the past year. For instance, take the week ending February 28, which in 2020 was perhaps one of the last full weeks that consumers kept to the majority of their pre-pandemic behaviors. According to data from the United States Department of Agriculture (USDA) Economic Research Service (ERS), sales that week for “sweet, ready-to-eat (bakery items)” prepared in commercial kitchens totaled $115.1 million in 2021, which is actually a 0.4 percent decrease from $115.6 million in 2020. However, bakery chains that have been able to stay in tune with consumers’ changing needs and tastes during the pandemic have had the ability to drive sales. For example, Paris Baguette America saw record-high sales during 2020.

Some of the key ways that food chains have boosted spending are by providing attractive loyalty rewards and comprehensive off-premises ordering options. Krispy Kreme, for its part, has a More Smiles rewards program with the same joy-centric messaging as the chain’s recent marketing initiatives, featuring loyalty points and exclusive deals and offers. The company also offers delivery and in-store pickup through its website and mobile app, suggesting that investors may have reason to be optimistic about Krispy Kreme’s future.

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