Like peanut butter and jelly, or cookies and milk, doughnuts and coffee just go together. To make this combination business official, Krispy Kreme is now owned by Caribou Coffee owner, JAB Holding Company.
According to a press release on May 9, Krispy Kreme was purchased for $1.35 billion.
German company JAB purchased the Minnesota-based coffee company in 2012, and last December they also acquired Keurig, which, is another big player in the coffee business. The companies have continued to operate independently after being purchased by JAB, but the corporation is on it’s way to becoming “the Budweiser of coffee,” analyst Pablo Zuanic said.
The acquisition of companies is nothing new, and is a common practice in the business world. Just two years ago, Comcast Cable acquired Time Warner Cable for $67 billion.
There are many benefits associated with acquiring other companies. Not only does it help eliminate the competition, but it can also increase performance, decrease the cost of production and help the acquiring company grow their market share, without having to do the work themselves.
With their inclusion into JAB, Krispy Kreme will increase their coffee sales, and continue selling their famous pastries to a larger market. Proof of this higher standing in the market was seen when the donut company’s stock rose over 24 percent.
Krispy Kreme’s headquarters in found in Winston-Salem, N.C. The company was started in 1937 and current has 1,100 store locations around the world, with 300 of those locations in the United States.
JAB’s experience with the foreign market will also help Krispy Kreme get back on track after losing business and stores in international locations.
Dunkin’ Donuts is one of Krispy Kreme’s larger rivals, and they have been making most of their profits from coffee drinks, so it is only appropriate for Krispy Kreme to join in on the success.
Before being purchased by JAB, Krispy Kreme signed contracts to sell 12 -ounce bags of ground coffee in 2015 and bottled ready-to-drink coffee beverages in 2014.
Krispy Kreme’s new access to a wider range of beverages and breakfast foods will also help them enter the low-carb diet consuming 21st century.
With the increasing amount of focus on eating healthy, people are viewing doughnuts as a rare treat, rather than a daily breakfast option.
By adding more healthy options, like egg white breakfast sandwiches and sides of fruit, Krispy Kreme will bring in a large group of customers.
When looking at the business history of JAB Holding Company and the Reimann family, the wealthy German family that owns the holding company, it is clear that the both the family and company are dedicated to bringing the world a variety of food and beverage options, while also helping restore businesses to their former glory.