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When Debra Bass flew from North Carolina to her home in Ohio, her carry-on luggage consisted of four dozen Krispy Kreme glazed doughnuts. Still warm. And taped shut, to avoid temptation.
She didn't want to arrive home empty-handed.
At the airport, she says, "People were waiting for me to start selling them, and I not only could have made a fortune, I could have picked up so many guys. It was an instant ice breaker."
She resisted - until a layover in Baltimore. Then she fished in her purse for a key chain with a tiny penknife pendant, and sawed through the bonds for a little bite of heaven.
Ahh, the Krispy Kreme experience.
Sink your teeth into one of these fresh, glazed, yeast-raised delights, hot off the conveyor belt, a steamy, sugary, cloud-light confection, redolent with soybean oil and vanilla - and you partake in one of the Eleusinian mysteries of Southern life, a rite performed beneath a midcentury modern neon sign that defines the Dixie landscape as surely as kudzu and Coca-Cola.
A few people in Akron, Ohio, and other Northern cities know about the pleasures of Krispy Kremes, but most of the 100 stores in this privately held company are in the South. Wholesale-based, with no advertising presence and almost no growth in decades, the company has maintained a slumbering, regional profile for 57 years.
Today Krispy Kreme is ready to wake up and smell the coffee in the billion-dollar-plus doughnut market.
The Winston-Salem-based company says it will double the number of its outlets in the next three years. Most of the expansion will be in the Midwest and the Northeast. A while back Krispy Kreme opened the first of its newest model stores, a modular, slimmed-down, retail-only, double drive-through in Memphis, Tenn., home of the most famous Krispy Kreme eater of all, the late Elvis Presley.
Or maybe not so late. Add this to your Elvis sightings: Erma Pleas, office manager at the other Memphis Krispy Kreme, at 4244 Elvis Presley Blvd., says that during a recent Elvis week she saw a dead ringer for the King (with appropriately aged features), sitting quietly in her store, alone, eating a dozen jelly doughnuts out of the box. "If I'd had a camera I would have taken a picture," she says.
The "hot" light must have been on at the store.
"When you turn it on, they come out of nowhere, like they can sense it or smell it or something," says Peggy Gilmert, a cashier in Atlanta's Ponce de Leon store.
Most like 'em hot
But up until now, Krispy Kreme connoisseurs took their chances, driving by and hoping to see the "hot doughnuts now" light flash.
"They've told me my whole life what they like about Krispy Kreme is that hot Krispy Kreme," says Chief Executive Officer J.A. "Mac" McAleer.
"We're doing a simple thing: We're just giving it to them. They want it all the time and we're giving it to them all the time."
Hot doughnuts, all day long, is the central selling point of the new stores, which will cater only to drive-by and walk-up customers. To emphasize this point, the "hot light" in new stores will be twice as big. And there is a mandate that existing stores have hot ones coming off the line at least five hours in the morning and five hours at night.
When Vernon Rudolph opened the first store in Winston-Salem in 1937, it was more like a factory than a shop. He delivered to grocery stores, carrying fresh goods in the back of his Pontiac. So many customers stopped by the plant, however, that he knocked a window through the brick wall in front, through which he could pass a few hot samples.
The retail customer has been an afterthought ever since. Most franchises support themselves by frying up enormous numbers of doughnuts, an average of 30,000 a day; the bigger stores can make 18,000 an hour.
These they send out on route trucks to grocery stores, hospitals, schools and other wholesale customers. (A healthy portion also goes wholesale to non-profit fund-raising groups, including churches and Boy Scout troops.) But retail customers keep coming. This is partly because Krispy Kreme not only provides junk food nirvana but also its own floor show.
The doughnut-making machinery at most stores (custom designed and built by the company) is visible through glass partitions, giving the kids a chance to watch those ringlets of pastry travel up and down a Rube Goldbergian series of elevators and conveyors belts, through a lake of hot oil and finally under the glazer, a waterfall of liquid sugar.
Saturday night entertainment
Wes Eisenberg remembers driving to the Krispy Kreme in Jacksonville, Fla., with his father, a civil engineer, as a special form of Saturday night entertainment. "Our cousins would come from out of town, we'd make a trip out there and sit around and watch the machines for the longest time," says the Atlanta resident. "I wondered if [my father] wasn't mesmerized by the mechanics."
Others enjoy observing the clientele, which is equally as picturesque, and drawn from every social stratum. The Ponce de Leon Krispy Kreme "is the only place you can go and see a crowd from church sitting at one table and hookers sitting at another table," says Atlantan Susan Petrirena.
Its green-roofed stores and antique "bow-tie" logo make the company appear unchanged, but Krispy Kreme's been through some severe ups and downs.
In 1973, owner Vernon Rudolph died. In 1976 mammoth conglomerate Beatrice gobbled up the doughnut company, much to the chagrin of franchisees, who say the recipe was cheapened and even the red-and-green colors were altered.
In 1982, a group of franchisees banded together to buy the company back, led by Joe McAleer, who owned four plants and six satellite stores in Mobile, Birmingham and Montgomery, Ala., and Gulfport, Miss.
Leveraging debt five-to-one against equity, the franchisees paid between $20 million and $30 million; McAleer paid more than half.
The McAleer-led rebellion promptly reinstated the "1968 recipe," restored the old colors, and led the push toward retail. Today the McAleer family owns the controlling stock in Krispy Kreme. McAleer's sons Joseph A. (Mac) and John N. (Jack) are chief executive officer and executive vice president/sales. Along with President Scott Livengood, they spent the '80s retiring the debt and developing new models for the 21st century Krispy Kreme.
Selling franchises
Beginning in March the company plans to start selling franchises, something it hasn't done since the 1960s despite thousands of requests from such doughnut fanciers as flutist Herbie Mann and Los Angeles Clippers basketball forward Danny Manning.
One of those requests came from Debra Bass, of Moreland Hills, Ohio, who muses that 24-hour access to Krispy Kremes, at 160 calories apiece, "is a scary thought, frankly." But she adds: "I cannot believe we've lived this long without them. People don't know what they're missing."
Phil Waugh, director of franchising, suggests that a new franchise will cost between $25,000 and $30,000 with another $325,000 investment in the building and equipment.
Krispy Kreme's expansion will not come without some growing pains.
One casualty of the shift to drive-through will be the image of Krispy Kreme as a place to relax over coffee. When the green-roofer in downtown Raleigh, N.C., was retrofitted to match the new image, and the horseshoe- shaped counter was eliminated, some of the regulars were annoyed. "To me it broke up that sense of community," says Raleigh photographer Karen Tam, who concedes that "it's cleaner, if you want clean."
"One day we will come back down to our roots as far as an eat-in standpoint is concerned," reassures David Lambert, the architect whose designs for the late-1980s model store eliminated that diner-style counter.
The newer-model 1,100-square-foot drive-throughs have no seats at all. Executives say the quick-serve stores are the best way to "grow the company" and get the product in front of a new audience. The drive- throughs arrive on the backs of flatbed trucks, and are ready for business in less than four weeks. Customers will move through the auto lines in 45 seconds or less, "and we will chip away at that speed," says Mac McAleer.
By catering to convenience, the chain will increase its chances of survival in new territory, says Nancy Kruse, a principal in Technomic Inc., a consulting firm specializing in the restaurant industry. On the other hand, "the big challenge to them will be going head-to-head with well-established, chain brand names."
The top five doughnut chains sold $1.3 billion worth of fried goodies in 1992, according to Technomic. And despite repeated injunctions to cut down on fats, America's taste for crullers isn't dwindling, says Kruse. "In 1992 Dunkin' Donuts sales increased 10 percent - that's a pretty substantial increase."
Dunkin' who? Krispy Kreme execs won't actually say the D-word out loud. They maintain they don't have any competition. "Honest to goodness, I think Krispy Kreme is in its own category," says Livengood. "It's the same shape as what people know to be a doughnut, but the similarities beyond that don't exist."
It's not a doughnut. It's a Krispy Kreme.
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