Krispy Kreme Reported 2021 Revenue of $1.38 Billion and Fully Exited Traditional Wholesale

This is an English adaptation of a FoodBud historical article originally published on February 27, 2022.

Krispy Kreme reported fourth-quarter and full-year 2021 results for the period ended January 2. The donut chain generated Q4 revenue of $370 million, up 13.8% year on year. Full-year 2021 revenue reached $1.38 billion, up 23.4%; the original article framed this as about RMB 8.7 billion.

Digital, Occasions, and Distribution

In 2021, e-commerce contributed 17% of revenue. Krispy Kreme said it wanted to lift that share to 25%.

Occasion-led marketing remained important: 30% of customer orders in 2021 were tied to special holidays and events.

As of January 2, Krispy Kreme had grown its global points of access to 10,427, adding more than 2,000 during 2021. DFD retail points increased by more than 1,000 for the year. In the U.S. and Canada, Krispy Kreme had 5,723 retail points.

Across 2021, the company sold 1.5 billion donuts.

Insomnia Cookies

In 2018, Krispy Kreme acquired a 74.7% stake in Insomnia. In 2021, Insomnia’s revenue grew by more than 30%. Its U.S. store base had passed 600 locations, and the company planned to expand internationally.

International Expansion Targets

Krispy Kreme planned to open three new country-level international markets each year. For 2022, it was preparing to enter Switzerland in Europe and Chile in South America, with additional market plans to be announced later.

On network scale, Krispy Kreme estimated global whitespace of 50,000 points of access and said it was confident it could maintain at least 10% annual growth.

The company expected 2022 full-year revenue of $1.53 billion to $1.56 billion.

The Hub-and-Spoke Operating Model

According to Krispy Kreme’s disclosures, by Q4 2021 the company had fully exited its traditional wholesale business and was focusing on fresh, hot products.

A core strategic pillar was expansion through a hub-and-spoke model. Krispy Kreme defined a hub as a combination of production facility and large store, connected to smaller shops and retail points as spokes.

In 2021, each international hub generated $9.1 million in annual revenue. Of that, 54% came from in-store dining and drive-thru pickup, 35% from retail points, and 11% from e-commerce. Each hub averaged about 80 points of access.

In the U.S. and Canada, each hub generated $4 million in 2021 revenue. The mix was 73% from in-store dining and drive-thru pickup, 18% from retail points, and 9% from e-commerce.

Krispy Kreme’s 2024 target was to raise annual revenue per hub to $10 million in international markets and $5 million in the U.S. and Canada.

U.K. Example Shared With Investors

At its investor conference, Krispy Kreme used the U.K. market to illustrate the hub model:

• 2016: one hub covered two small shops and 26 retail points. The full hub system, expressed as 28 + 1 points, generated £2.3 million in sales.
• 2017: the hub added two small shops and 32 retail points, reaching one large store, four small shops, and 58 retail points. The 28 + 34 + 1 system generated £4.1 million.
• 2018: the hub added 16 retail points, reaching one large store, four small shops, and 74 retail points. The article notes the chart’s arithmetic as 28 + 34 + 16 + 1, with one unclear missing point, while total points of access were shown as 80. Sales reached £5.4 million.
• 2019: the hub added one small shop, reaching one large store, five small shops, and 71 retail points. Total points of access declined to 77, while hub sales rose to £6.0 million.

Note: forward revenue guidance, expansion plans, and 2024 hub targets are historical figures from the original February 27, 2022 article.