HOW KRISPY KREME IS ENSHRINING
SUSTAINABILITY IN ITS SUPPLY CHAIN
HOW KRISPY KREME IS ENSHRINING SUSTAINABILITY IN ITS SUPPLY CHAIN
SUSTAINABILITY
Explore how the multinational doughnut and coffeehouse company has built sustainability into its global supply chain and sourcing strategies while prioritising quality and flavour.
ONE OF THE MOST BELOVED AND WELL-KNOWN SWEET TREAT BRANDS IN THE WORLD, KRISPY KREME OPERATES IN OVER 30 COUNTRIES WITH A NETWORK OF FRESH
DOUGHNUT SHOPS, E-COMMERCE AND DELIVERY SERVICES AND PARTNERSHIPS WITH LEADING RETAILERS.
The company first opened its doors in 1937, when founder Vernon Rudolph began selling doughnuts to local grocery stores in North Carolina. Today, Krispy Kreme has over 1,000 stores in 36 countries, and operations are growing every single day.
However, with such a significant reach Krispy Kreme has had to account for potential supply chain setbacks –shipping a product long distance is costly and time-consuming, particularly since the COVID-19 pandemic, and any external issue from natural disasters from demand spikes can disrupt a global supply chain.
According to PwC’s recent study Localising supply chains and its impact on performance, Krispy Kreme’s shift to local suppliers and partners is likely to significantly improve its supply chain performance – with 82% of respondents reporting a stronger, more resilient supply chain network.
This approach is also helping Krispy Kreme continue to grow while investing in local communities and spearheading sustainable initiatives. The company is currently laser-focused on embedding sustainability into its supply chain while maintaining the high-quality product it has spent the past 88 years developing.
As part of this, the company is embarking on efforts to build the resilience of its business and supply chain while simultaneously addressing climate change. Since 2019, Krispy Kreme has cut over 83 tonnes of plastic from the business, and is aiming to reach 80% recyclable packaging across its operations by the end of the year.
The company is also focused on reducing food waste, with a goal to
divert at least 50% of food waste from landfills by 2025. In recent years, Krispy Kreme has prioritised upping the use of food-to-feed initiatives while increasing landfill diversion. Last year, the company’s Japanese team converted 100% of its food waste into animal feed, and this initiative is only growing.
It balances these two foci by ensuring the continuity and reliability of its global supply chain is a top priority for
the company, while viewing its sourcing strategy as a vehicle for making a broader positive global impact and advancing sustainable business practices across all operations.
Another key priority across Krispy Kreme’s global supply chain is a commitment to sustainable sourcing. The company has a goal in place to use 100% cage-free eggs by 2025. A crucial step towards this was a
high-quality product. In-process quality checks are performed throughout the production process – including ingredients, moisture percentage, fat percentage, sieve size and metal checks – and partners are provided with specific instructions for the storing, cooking and transportation of products.
Both franchise and supplier partners are selected carefully, as the
“WITH RELIABLE AND SUSTAINABLY-MINDED SUPPLIERS LIKE KERRY PROVIDING A SOLID FOUNDATION, KRISPY KREME IS ABLE TO TURN ITS ATTENTION TO EXPANSION”
strategic product line exit during the first quarter of fiscal 2023, which represented 70% of the company’s egg use.
The company has also made steady progress on sourcing sustainable palm oil, with 100% of the palm oil used in Krispy Kreme UK & Ireland supporting sustainable production and a deforestation-free supply chain.
A thorough approach to supply chain operations is critical when ensuring the smooth running of sustainable initiatives, but it’s also needed to produce a consistent and
company is committed to sourcing the best quality and most sustainably minded ingredients available for its products. In order to achieve this, it has prioritised close relationships with partners who share the same values –such as raw flour supplier Kerry, who are similarly committed to sustainable sourcing, recyclable packaging and emissions reduction.
With reliable and sustainably-minded suppliers like Kerry providing a solid foundation, Krispy Kreme is able to turn its attention to expansion. In partnership with restaurant group ISH Foods, the company is planning to launch in Germany. It looks to open its
Food Protection & Preservation
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doors in 2025, with a network of Krispy Kreme shops starting in Berlin.
“We are excited to expand into Germany as it has been a priority market for us, offering substantial growth with more than 3,000 points of access,” says Raphael Duvivier, Chief Development Officer at Krispy Kreme. “Additionally, we are very pleased to partner with ISH leader Ilkem Sahin and the very experienced ISH team to grow in the market.”
By making impressive progress against its international expansion strategy, Krispy Kreme is focused on expanding access and purchasing frequency, increasing hub & spoke productivity and driving efficiencies to earn a higher return on invested capital (ROIC).
With a strong pipeline for new market growth, Krispy Kreme hopes to achieve 75,000 points of access globally over the long term.
Learn more about Krispy Kreme here.