One small step for doughnuts. One giant leap for Krispy Kreme.

That’s how Dave Skena, chief brand officer of Krispy Kreme Doughnut Inc., frames the decision behind the introduction today of soft-serve ice cream at select Krispy Kreme stores for the first time in the company’s 85-year history.

The new ice cream offering, which not only borrows equity from the brand’s famous doughnuts but their flavor profiles and actual ingredients, represents a major step toward an even bolder ambition—to become what the company calls “the most-loved sweet treat brand in the world.” It follows moves in recent years to recapture franchised stores, modernize its direct-store delivery program, and launch a line of branded goods in retail, making Krispy Kreme a kind of hybrid doughnut shop that’s also a fresh- and packaged-food brand—and now, an ice cream shop too.

“Ice cream for us is a really big deal, a really big bet,” Skena told Ad Age in a recent interview. “It’s a lot of equipment, a lot of training, and a lot of work.”

A spokesperson declined to specify the size of the investment behind the ice cream launch, which Skena said would take place today in about 50 of the chain’s 380-plus U.S. stores across 10 warm-weather markets. But Skena makes no mystery about the vision behind the move: the market for ice cream is about eight times larger than that of doughnuts—and all part of what the company has identified as a $650 billion global “indulgence” market.

“Our goal is to be the most-loved sweet treat brand in the world. It’s a marketing goal, but it’s also a company goal,” Skena explained. “The belief is, if we become the most beloved sweet treat brand in the world, the money will come. And we don’t mean just retail, or CPG, or doughnuts or ice cream. Our aspiration is to be broadly distributed enough across the world, and with enough density in each country, so there is enough awareness ... and producing an experience that is so good, it’s a no-brainer. I know if we can do that, there is so much growth to be had.”

There is a long way to go, considering that Krispy Kreme’s total revenue in fiscal 2021 was $1.38 billion, which includes sales from shops in more than 30 countries, U.S. stores that serve as delivery hubs for branded fresh doughnut offerings in retail stores, a separate line of packaged goods such as Crullers and Bites now available throughout Walmart and other retailers and the Insomnia Cookies brand grafted onto the chain by then private owner JAB Holdings in 2018. 

In diversifying from the doughnut as part of its long-term vision, Krispy Kreme has come to a strategic decision reached in different ways by larger rivals like Tim Hortons and Dunkin', each of which has pursued coffee and traditional foodservice. Dunkin' also owns an ice cream brand in Baskin-Robbins, with hundreds of co-branded shops that among other things, make up for one another’s weaknesses at different times during the day.

Dunkin' put an exclamation point on its diversification strategy by dropping the name “Donuts” from its brand—a move that in Skena’s estimation, ceded it was up against a superior doughnut maker. “We told them, very respectfully, on social media, that that was the right move.”

'Inherently buzzworthy'

For Krispy Kreme, marketing this transition is a unique challenge for Skena, who arrived a little more than three years ago bringing marketing experience with well-funded consumer packaged goods brands—PepsiCo’s Frito-Lay division and Kraft Foods—as well as a stint as chief marketing officer of a financially challenged restaurant brand, Ruby Tuesday. At Krispy Kreme, a small budget relative to quick service restaurant rivals, and what Skena describes as a brand built around the concept of “generosity”—customers buy its doughnuts with the purpose of sharing them—has made Krispy Kreme an ”inherently buzzworthy” brand whose marketing is also about sharing: Virtually all of its marketing investment is in digital channels and earned media today.

“It would be fun to say I thought it all out, wrote it all down, and executed on that exactly as we had planned,” Skena said of the brand’s move to eschew more traditional mediums it once utilized like outdoor and radio.

Instead, he said, the philosophy related to work to uncover what was special about the brand to customers—namely that 85% of Krispy Kreme doughnuts are consumed by someone other than the person who purchased them.

“The last time you bought a car did you buy 12 and give 11 away? That’s typically what our customers do; the human value they over-index most on is generosity,” he explained. “When I came here, we did seven types of media. I’m not crying poor here, but we don’t have the budgets of a McDonald’s or [Restaurant Brands International, parent of the Burger King and Popeyes chains], and felt that in comparison to them, it was too little butter spread over too much toast, so we focused it all on social media.”

Advertising through social channels—Instagram and Facebook primarily, but increasingly, TikTok—generally means “you put messages out, see who interacts with it, and spawn lookalike audiences based on who engaged with it,” he said. “This is far more effective than anything else I can do.”

National Doughnut Day and more

The brand is going after earned media by “punching way above our weight,” in calendar events like National Doughnut Day, a rapid pace of limited-time offers and promotions that err on the side of “generosity”—about one every three weeks. Creative attempts to participate in culture—a skill that in Skena’s point of view, Krispy Kreme is getting rather adept at—is another avenue to earned media.

The brand’s generosity is reflected in promotions that give away an awful lot of products but have earned the brand a halo that delivers. In the early months of the pandemic, it offered any medical professional free doughnuts on Mondays; as COVID conditions improved, it was free doughnuts for any customer who proved (or in practice, said), they were vaccinated. Most recently, it was high school graduates.

“The franchisees and the financial guys may not have been happy at first, but I give our leadership team credit—we tried it,” Skena said about "Medical Mondays," which kicked off the series in 2020. “The first few Mondays we actually lost sales and people came in and got their free stuff. Then, an amazing thing happened—even days that weren’t Medical Monday became more popular, and people eventually told us, ‘I’ll take the free stuff—and I’ll buy some too.’ It’s a tough business model to rely on the generosity of your consumers, but they paid us back.”

Moves to get Krispy Kreme into cultural conversations have taken the form of rapidly executing special doughnuts that play on good news. A Mars doughnut launched concurrently with the landing of the Perseverance rover took a few weeks to plan; a more recent “Black Hole” doughnut—which referenced the discovery of a black hole at the center of the galaxy last month—was conceived and planned “between lunch and the end of the day,” Skena said. “To play in culture, you have to be able to move at speed.”

Original glazed

The ice cream launch has been a more purposeful development. It was built behind strategic moves largely executed under the chain’s private ownership including the acquisition of many franchised stores, allowing a revamped take on fresh-food distribution: certain stores are designated production and delivery hubs, which allows the company to act as a direct-store-delivery bakery. The company went public again last summer.

Krispy Kreme will similarly control ice cream, which integrates flavors—and ingredients—from its doughnuts. Three flavors of “Original Glazed” soft serve are to be offered in cups and waffle cones made of Krispy Kreme’s proprietary doughnut mix. Toppings such as “doughnut crumbles” are actually doughnut crumbles—dehydrated remains of leftover doughnut inventory. Seven ice cream shake flavors are inspired by Krispy Kreme doughnut fillings.

Stores chosen to debut Krispy Kreme’s ice cream are located in 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. They were chosen to be representative of the larger U.S. footprint as the chain weighs additional expansion, Skena said. Other stores around Mobile, and southwest Alabama; Tampa, St. Petersburg and Pensacola, Florida; New Orleans; Branson, Missouri and Wichita, Kansas will offer soft serve “soon,” the brand said.