Robots will begin frosting and filling the cakes within the next 18 months

Robots will begin frosting and filling the cakes within the next 18 months

Crispy Cream (DNUT) aims to shorten the time in the donut production line through automation.

“Maybe in the next 18 months, you’ll see some automation start in the frosting, the filling, the sprinkles, even the packaging,” Mike Tattersfield, CEO of Krispy Kreme, told Yahoo Finance Live (video above).

Winston-Salem, North Carolina, Inc. announces investment as part of Investor Day Along with its long-term forecast to generate $2.15 billion in revenue by fiscal year 2026.

The addition of the bots is part of an effort to maximize the opportunity for new hubs and a modern model in the US, and increase access points to fresh daily delivery (DFD) stories for grocery stores, convenience stores, quick-service restaurants, and other locations. With this model, customers can get a full-sized donut produced that day locally without ever going to a Krispy Kreme location.

“We have some very large factory stores…we have 12,000 access points today, which are getting fresh donuts globally,” said Tattersfield, stressing the key task of getting as many fresh donuts to various locations. “You have to start looking at the automation capacity for that because it goes into grocery stores. It goes into convenience stores.”

By the end of fiscal 2022, Krispy Kreme estimates that it will have approximately 5,400 access points in 30 countries, bringing in total revenue of about $475 million. By 2026, the company expects to have more than 12,000 access points in 45 countries, with plans to generate more than $660 million in revenue.

Meanwhile, the automated lines—which will produce 18% of Krispy Kreme donuts over the next 18 months—are expected to generate $2 million annually on a $6 million investment.

Take the “recurring task out of work” for employees

John Evanko, an analyst at JP Morgan, who has an overweight rating on Krispy Kreme stock and cut its price target to $13.00 from $15.00 last week, noted that the donut company is currently spending more than $100 million on donut production in the U.S., of which $60 million associated with post-production labor that includes icing, in-line packaging, and automating mounting/boxing jobs.”

Despite these automation plans, Tattersfield stressed that the employees of Krispy Kreme—also known as Krispy Kremers and Insomniacs (the employees behind Insomnia’s cookie business)—remain at the heart of the business with the goal of eliminating tedious tasks.

An employee carries a holiday sundry box at a Krispy Kreme Donuts store in Burbank, California, US, July 1, 2021. REUTERS/Mario Anzoni

“We still continue to lead the experience side with Krispy Kremers and Insomniacs, so I always find that when companies do great work, they balance the way they try to do it and try to get the recurring task out of the business.”

In a competitive environment for hiring and retaining talent, Tattersfield said, the ability to grow as an employee is what sets a person apart.

“It’s really about the opportunity for growth,” he explained. “When you’re at a company our size, even today, there are still over 400 donut shops with a long growth trajectory…that nationwide growth becomes a very attractive proposition. I’d love to see that our donut shop managers are now owners.”

Brooke DiPalma is a correspondent at Yahoo Finance. Follow her on Twitter at @BrookeDiPalma Or email her at bdipalma@yahoofinance.com.

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