Should Krispy Kreme Go Healthy?

Krispy Kreme (KKD), a name you can hardly speak without salivating, is having a great year. Shares are at $9 -- double what they were a year ago. Profit and sales are on fire.

So in order to keep momentum going, the company is ... getting healthier?

Chief executive James Morgan wants to add oatmeal, yogurt and fruit juice to the menu, Bloomberg Businessweek reports. He's also looking at specialty coffee, starting with custom blends in September and espressos and lattes over 18 months.

Homer Simpson would be disappointed, and I admit I am as well. You visit Krispy Kreme to indulge in a warm, sugary bit of heaven that melts in your mouth. That's what turned the doughnut chain into a superstar. You don't go there for oatmeal.

But Krispy Kreme needs to increase sales and maintain its fragile recovery. It was only six years ago that the company imploded in an accounting scandal and a series of bad management moves. Krispy Kreme closed half of its 390 stores and suffered 14 quarters of losses, Bloomberg Businessweek reports.

Business is much improved. Now, the store is taking a cue from McDonald's (MCD), which has seen fantastic results from its McCafe line of coffee and espresso drinks. And it's also stealing a bit of strategy from Starbucks (SBUX), which upgraded its menu with healthier eating options.

One food marketing professor says Krispy Kreme can target people in their 20s and 30s who may not be the Starbucks aficionados that other generations are. "Starbucks isn't really their brand," Nancy Childs told Bloomberg Businessweek. "Krispy Kreme has room to step up."

Krispy Kreme will still have its signature doughnuts. And even as it turns healthier, it's giving the carb-loving, calorie-consuming masses something else to drool over: doughnut milkshakes. The Daily Mail reports that the company is testing milkshakes at a handful of stores in three flavors: chocolate cake, raspberry-filled and, of course, original glazed.


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