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Krispy Kreme Doughnuts, Inc. Message Board

  • di_vur_se_fi di_vur_se_fi Apr 8, 2005 10:43 AM Flag

    Coffee? Forget it

    SBUX has how many points of distribution curently?

    7,000 maybe?

    They are shooting for 15,000 in the US and another 15,000 worldwide.

    Dunkin Donuts has how many locations in the US?

    2,000? 3,000?

    Dunkin gets 50% of revenue from coffee.

    kkd has a whopping 400 points of distribution (kkd gets 5-10% of revenue from coffee).

    Given the capex restrictions listed in the loan document, this number will only fall over the next 2 years.

    The locations specifically designed to sell more coffee (cold shops, d&c, other satellites, etc...) are being closed.

    Selling significant coffee out of 300-350 locations is a total pipe dream.

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    • Ah, my poor lost soul, you are irritated and I apologize. Let's let you have your way and only limit kk coffee points of distribution to hot coffee as you have now demanded. Besides (we'll pretend), packaged kk coffee has no bearing on kk coffee sales, and limiting kk coffee sales to hot coffee fits your conclusions better. Please do not forget about tomorrow. It's a day of rest and reflection.

    • Brother heathen, since you've got a two way dialogue with God, why don't you ask him/her how many places kkd sells hot coffee; he'll probably say about 400.

      imo, kkd has no hope establishing a coffee brand when they have so few points of distribution (of hot coffee); I can buy SBUX any time I want at the bookstore or the grocery store or the SBUX store, each within 5 minutes; with kkd I would have to drive 30 minutes, which I would NEVER do; if kkd wants to develop the brand, they'll have to open many more places where you can buy it HOT, which they will not be able to afford for many, many years (in fact, their pathetic expansion into the satellite area has been almost completely shutdown); very few will buy the packaged coffee unless they like the hot stuff (which you can only get in about 400 stores); in fact, even if they like the hot stuff, why would you buy kkd coffee when you can buy SBUX or some other gourmet brand which is actually roasted and blended by someone whose background is NOT in investment banking.

      So, yes, they do have potentially 10,000 points of distribution for packaged coffee where it can sit on the shelf and not sell just like the COGs.

      Finally, as evidence, have you ever bought the packaged stuff? Has anybody on this board ever bought the packaged stuff?

      Did you finish it or is it in your garbage or sitting in your cabinet, untouched except for the first sample?

    • Brother di:

      Do your kk points of distribution include the grocery stores that sell packaged kk ground and bean coffee? Coffee is coffee, isn't it?

    • High end coffee drinks will work fine.
      The number of stores don't matter. It is about revenue/profit per store. If they can increase profits by adding more upscale yuppie coffee drinks, that is all that matters. While they are in the store, yuppies buy donuts. Atkins fad is dead.

      You thinks SBUX always had 7,000 retail locations? LOL.

      Remember: this stock has priced in tremdous bad, pessimistic news. Just a tiny, slight bit of ANY good news, and it rockets.

      BTW: you shorts are damn lucky this is on NYSE instead of NASDAQ. Specialist stomped early rally and is now parked on the ask. Eventually, he will get overwhelmed by demand though. Maybe not today, but it will happen. Rest of market is down, and KKD is trading up. That alone says a lot.

      You can see how fast and violent the spikes are when shorts get spooked. A bunch of nervous nellies. LOL. Short slaughter is a lock. Book it.

      • 1 Reply to pingdave
      • BTW: I resisted star bux for years. I am totally addicted to it now. I even buy bags of it to make at home.

        If KKD stores had star bux quality coffee I'd stop in. I am their target customer: upscale boomer.

        KKD donuts are great too. Best I've ever had. Dunkin Donuts taste like stale lard.

        Buy what you know / understand.

        works for me everytime, and KKD's business model is easy to understand.

    • So what if Starbucks buys out KKD????

      There's a motion from SBUX shareholders to look at acquiring KKD... a motion the board has agreed to hear.

      • 3 Replies to bussman24
      • "So what if Starbucks buys out KKD????

        There's a motion from SBUX shareholders to look at acquiring KKD... a motion the board has agreed to hear."

        Do you realize how implausable this is? Why would any company acquire a company with:

        1. No financials
        2. No permanent management, to speak of
        3. Significant potential legal liabilities on several fronts
        4. SEC investigations
        5. Hedge fund control
        6. A busted business plan
        7. Zero collateral in the case of default

        I could go on and on. NO ONE is going to acquire KKD until these issues are cleared up, if ever. There is just no reason to take this risk.

        As a SBUX shareholder, I would be outraged if they risked my capital on a flyer like this. Why not just have KKD deliver donuts to SBUX stores? No risk, no capital, no exposure.

      • SBUX and DD are pure brands, built carefully over a period of time. I doubt either would take a chance with diluting the vale of their respective brands. In fact, what has happened to KKD is that, instead of nurturing their popular image, Livinggod and company went for gimmicks like "donut theatre," gas-station vending and supermarket consignments -- hardly in keeping with the "hot-glazed" picture.

        Maybe other more diversified companies would take a look, but not these two.

      • yes, and they will pay $.20 per share

    • Selling significant coffee out of 300-350 locations is a total pipe dream.

      "total pipe dream"
      ...pretty consistance with their current business plan.

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