The choice to explore alternatives unlocks Krispy Kreme’s shareholder value and allows the company to focus on the core strategy of the donut business.
According to Mike Tattersfield, CEO of Krispy Kreme, the company initially acquired a majority stake in 2018 of Insomnia to build up its own e-commerce and digital capabilities in addition to helping the cookie brand grow domestically and abroad. In the wake of the success of both efforts, the alternatives serve as the next strategic step for both companies.
“Krispy Kreme has expanded rapidly through our capital light omni-channel model, and the brand is now in 37 countries selling fresh doughnuts through nearly 13,000 points of access daily,” Tattersfield said. “Looking ahead, our goal is to expand to more than 75,000 points both by entering three to five new countries each year and developing new channels like quick service restaurants.”
Insomnia has experienced rapid growth with over 250 bakeries in three countries since being acquired by Krispy Kreme. The cookie company is expected to bring in a revenue of $230 million in the 2023 fiscal year, with 45% of that revenue generated digitally.
“It has been an honor to partner with Krispy Kreme in an unprecedented chapter of growth for Insomnia Cookies,” said Seth Berkowitz, founder and CEO of Insomnia. “As we enter our 20th year of delivering warm, delicious cookies, we are now a sizeable multi-channel enterprise but still have a huge runway ahead in the attractive $700 billion indulgence industry, and I look forward to leading our Insomniacs in our next phase of significant domestic and global expansion.”
Evercore and Morgan Stanley & Co. LLC have been hired by Krispy Kreme as financial advisors.