People - July 2006

CEO wants Krispy Kreme to make lots more dough
by Chris Richter

Winston-Salem-based Krispy Kreme Doughnuts Inc. once was a Wall Street wonder. Its glazed doughnuts, each packing 200 calories and 12 grams of fat, still are the undoing of dieters. But investors have been turning up their noses at its stock.

That doesn’t faze Daryl Brewster, 49, named president and CEO in March. “The opportunity was to run a company that was characterized by a great brand, which Krispy Kreme clearly is, great products, which Krispy Kreme clearly has, and great people, yet that had some real challenges.”

His goal is to restore the company’s reputation, tarnished by accounting irregularities, overzealous domestic expansion and questionable acquisitions and franchise buybacks. The company avoided losing its position on the New York Stock Exchange by filing its annual report for the fiscal year ended Jan. 30, 2005, just two days before the April 30 deadline. It lost $198.3 million on revenue of $707.8 million; the previous year, it had $48.5 million profit and $649.3 million revenue. Krispy Kreme must issue its report for the fiscal year that ended Jan. 29 by July 31.

Brewster has helped revive other beleaguered food brands, including Planters nuts. “[It] was a business that really struggled in the mid-1990s, when everybody was concerned about fat. Planters equaled nuts equaled fat equaled bad.” The company brought back the monocle-wearing Mr. Peanut and paid for research into the health benefits of nuts. Planters was a great brand, he says, but it wasn’t in sync with consumers. “Obviously, there are certain parallels to North Carolina-based doughnut companies.”

A Westfield, N.J., native, Brewster earned a bachelor’s in economics in 1978 from the University of Virginia. After getting an MBA in 1982 from UNC Chapel Hill, he was assistant brand manager for Jell-O, which General Foods owned. He also worked for Campbell Soup and Nabisco before going to Kraft, where he became president of its $6 billion North American snack and cereal division in 2003.

Brewster is enthusiastic about expanding outside the U.S. The company awarded development rights to Americana Group, a Kuwaiti company that plans to open about 100 stores in the next five years in markets such as Egypt, Saudi Arabia, the United Arab Emirates and Kuwait. “[Most] of the world is outside this country, and we think this represents an opportunity for us. What we have seen and confirmed in recent trips is that the Krispy Kreme brand and the product really do travel.”