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.”
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.”