Matías Rosenthal, CEO of Grupo Premier Chile, the firm responsible for the US brand touching down in Chile, tells us that new stores are on the way.
The Krispy Kreme store in Kennedy street in Santiago is full; the smell of freshly-baked donuts and coffee accompanies the nearly 80 customers who are lining up at that time of day. It is 9:30am on Thursday, April 20, and the store has been open for a week.
A few days ago, this same sidewalk had people camping out on it and was surrounded by the media seeking to understand the furore triggered by these US donuts. Those responsible for the brand touching down in the country are Grupo Premier Chile, a national subsidiary of the holding company that operates under the same name in Mexico. They are also the ones behind Little Caesars pizzas.
While Matías Rosenthal (41), CEO of the firm, talks about the phenomenon, a hot, freshly-fried glazed donut arrives at the table. “Do you realize that it’s another sensation? There’s a before and after; it’s like a mix between a fresh churro, but it’s not heavy,” says the business administration and MBA graduate from Columbia. He eats one too.
The story of Krispy Kreme is a long one. The company began as a wholesale business in 1930 in North Carolina. In the 1940s, its founder, Vernon Rudolph, developed the automatic cutter that shapes the donuts to this day. In the 1990s, they implemented the hot light sign, which announces to the street that the doughnuts (given their name for the dough used and because they traditionally contained nuts) are freshly prepared. In the early 2000s, they opened their first branch outside of the United States, in Ontario, Canada.
During those years, business was not going well. In 2005, they filed for Chapter 11 and were acquired by the English fund JAB for about US$1.35 billion. They closed and restructured, and when everything was in order once more, they reopened the company on the stock market. Today, it has a market capitalization of US$2.5 billion.
The first approach to Krispy Kreme started in 2019, recalls Rosenthal. “We had the pizzas on one side, and that obviously generated revenue and procurement at certain times, but we wanted something complementary to that. We liked coffee, breakfasts, tea time, different celebrations,” he says.
The pandemic arrived and the franchise process became slower and more complicated; however, negotiations continued. In early March 2022, when the deal was being closed, Rosenthal traveled with his team to Las Vegas to experience the stores. It was there that he tried Krispy’s frosted donuts for the first time. “I said, ‘this is from another planet,’” comments the CEO. He didn’t like donuts until then. They toured the factories, learned about the machines and the recipe, and learned how to cook the donuts.
“I think they (the owners of the brand) chose us because they saw what we’d done with Little Caesars. We’d won all the international awards and we wanted to be the best restaurant operators in the world,” he points out.
In late 2022, they began to make noise on social networks, and in the words of Rosenthal, “to generate fear of missing out (FOMO).” In March this year, they set out with carts to give out donuts in different parts of the city, and “when we saw that 2,500 people came to see what we were doing in Nueva Las Condes, where we had to get out quickly and a cart full of products was stolen, I thought, ‘we’re ready, we’ve done it, we’ve hit the bullseye.’”
They have been training the team for a month, and he also went to Los Angeles for three weeks to soak up the business. “I like to get my hands dirty; I know how to use the machine, make coffee. I get stuck in as much as I can; if I don’t know something, I like to look for the answer,” he states.
On April 11, they announced the opening for Thursday 13. Their more than 60,000 Instagram followers found out and a Krispy Camp was set up, where the first 30 people could stay.
The owners of Grupo Premier in Mexico are the Gaxiola Coppel family. They started out in that country more than two decades ago in the car industry. Today, they own retail businesses and have more than 50 brands. They are constantly involved with real estate, mass consumption and other business areas. In 2006, they entered the food sector with Carl’s Jr. (hamburgers), and realized that they could obtain good numbers with the quick service restaurant (QSR) model, which was becoming fashionable in private equity.
In 2016, they sold the hamburger chain and, at the same time, took over Little Caesars. At the time, they said that they wanted to diversify their operations outside of Mexico. They chose Chile, and the people from Carl’s Jr. told them, “There’s a Chilean who knows the industry well.” They contacted Ronald Santolaya, with more than 40 years of experience in QSR in the United States and Chile.
To learn more about investment opportunities in food industry in Chile, check out the following article.
Source: Diario Financiero
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