Why Krispy Kreme Is Kissing Your Grocery Store's Snack Aisle Goodbye

Krispy Kreme is practically synonymous with donuts — the company's NASDAQ symbol reads DNUT — and it sells massive amounts of them. Last year, for example, Krispy Kreme sold 1.63 billion donuts, its highest number ever.

But Krispy Kreme has diversified since being bought by the JAB Holding Company in 2016. For starters, it got into the cookie business, taking over Insomnia Cookies in 2018. It also made big moves to expand its donut base, announcing nationwide delivery service through DoorDash in 2020. That same year, its donuts debuted in grocery aisles, as Krispy Kreme premiered two new product lines — Krispy Kreme Doughnut Bites and Krispy Kreme Mini Crullers — at Walmart stores across the U.S.

Results from these diversified revenue streams have been varied. Insomnia Cookies, for example, has been a smashing success, according to a recent earnings call for the company shared via The Motley Fool. Currently, there are 231 cookie shop locations, but Krispy Kreme is projecting enormous growth for the brand. It's expecting to open its first international locations in Canada and the U.K. later this year. Delivery sales have been robust as well, for both Insomnia and Krispy Kreme. The grocery-sold snack products, however, have not been as successful.

In fact, as Food Dive has recently reported, Krispy Kreme is shutting down this part of its business, and shuttering the facility where the products were made.

Krispy Kreme's three-year packaged snack experiment is over. According to Food Dive, the company will stop production on grocery snack items like its Doughnut Bites and Mini Crullers, with the factory that has been producing them since 2020 slated to shut its doors in May. Over 100 workers are expected to lose their jobs as a consequence of this closure. Krispy Kreme, for its part, was quite clear about why it decided to pull the plug.

"Our fresh daily doughnut business is strong, profitable, and growing quickly. This is the area where we are focusing our investments and resources," Krispy Kreme announced in a statement regarding the closure, shared via Food Dive. "Because of this, we chose to exit our underperforming, extended shelf-life snack aisle business and cease production at our manufacturing facility in Concord, North Carolina, where these snack aisle products were made."

This doesn't necessarily mean, however, that Krispy Kreme is getting out of grocery stores entirely, or ending its partnership with Walmart. Three weeks ago, for example, the Greater Long Island Media Group reported that the brand's signature fresh donuts were available at multiple Walmart stores in Long Island, New York. What the recent news about Krispy Kreme closures seems to indicate is that the chain is exclusively focused on selling fresh donuts.