Krispy Kreme’s profits are up 47% for Q1 2003. While governments and various organisations become increasingly concerned about the obesity phenomenon, consumers themselves remain dedicated to immediate gastronomic pleasures. Self-indulging is proving a hard habit to kick and not all food companies are in a hurry to help.
If a company’s flagship product is not nutritious, or just outright unhealthy, one might reasonably believe that it would be having a hard time right now. The existence of a worldwide obesity epidemic has become obvious to health organisations, consumers, consumer watch-groups and governments in the US and across the world.
Many global companies are quickly announcing and implementing new health-focused initiatives. At an investor conference on Wednesday, Nestlé’s CEO announced intentions for it to become a “respected and trustworthy nutrition, health and well-being company”. Over the past few months, McDonald’s has made significant efforts to strengthen its salad-based offerings. In March, Hershey Foods managed to persuade the American Diabetes Association to allow the use of its logo on Hershey’s new line of sugar-free chocolate.
Other companies have had little choice but to stick by their politically incorrect products, and in some cases, have benefited greatly from this stance. For example, the top three doughnut companies have grown from strength to strength over the past few years. Krispy Kreme, Dunkin’ Donuts and Tim Hortons all showed above industry growth in 2002.
This week’s Krispy Kreme financial results show total company revenues grew 33.9% to US$148.7m and system-wide same store sales were up 11.2% in Q1. Last year, full year sales grew by 38%.
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While consumers become increasingly aware of their waistlines, they seem unable to stop themselves from self-indulging. All day snacking, little treats “here and there”, and self-rewarding for struggling through financial belt-tightening have all combined to create a positive environment for unhealthy quick-fix products. At present, it seems unlikely that action-group wrath or perhaps even legislation will be able to make a dent in US doughnut sales.
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