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Krispy Kreme chooses Manchester for first UK factory
US-based doughnut giant Krispy Kreme is opening its first UK manufacturing unit, as it bids to double its number of stores in the country within the next five years.
Krispy Kreme UK has taken up a 10-year lease on a 5,392 sq ft production unit on Heywood, Manchester, which will create up to 40 jobs and house a manufacturing line and processing kitchen with the ability to produce 3,000 doughnuts per hour.
Chief financial officer Rob Hunt said: "We looked at a number of industrial parks across the North West but Heywood proved to be the perfect location for us, not only because of its fantastic transport links but also because it is brand new and therefore, highly suitable for food grade use."
Krispy Kreme UK has 42 branded UK outlets, said Hunt: "This move is the next step for our expansion plans to double the number of stores in the next five years."
The UK expansion reflects a successful 2010 for Krispy Kreme, which expects to report global revenues of $17-20m this year, and predicts this figure could rise to $22-24m in 2011.
Within the UK, Krispy Kreme provides a range of glazed doughnuts from Krispy Kreme branded stores plus instore cabinets at outlets such as Tesco and Moto service stations, as well as in coffee bars and kiosks.
The firm also offers coffee and speciality beverages, while it is testing ‘soft-serve' drinks served in cones, shakes and doughnut sundaes, having identified the need to bolster its presence in what it sees as the high-margin beverage sector.
During a conference call earlier this month, chief executive Jim Morgan said the Krispy Kreme brand was "significantly under-penetrated with substantial room for growth" worldwide.
Within the 11am-2 pm sales window he noted that the brand was "almost non-existent", due to the firm's doughnut-centric focus that it wanted to extend.
"We also think we'll have products that will offset the traditional slowdown that doughnut sales have in the warmer summer months," he said.
Founded in 1937, Krispy Kreme opened its first UK store inside Harrods, London, in 2003, and the company said the move was the latest stage in rapid expansion phase that means it now has 640 outlets open worldwide, 564 of which are franchises.
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