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Krispy Kreme acquired a majority stake in Insomnia Cookies in 2018 when the brand had 135 units. As of the current date, there are approximately 250 Insomnia Cookies locations.
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Krispy Kreme is considering strategic alternatives for Insomnia Cookies, including a potential all-cash sale. The decision comes as Insomnia Cookies expects to generate approximately $230 million in revenue for the year.
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**Expansion Plans**: Insomnia Cookies had plans to open 30 to 40 new stores in the current year, with a payback period of approximately one year due to healthy four-wall margins.
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**McDonald's Partnership**: Krispy Kreme has been testing the sale of its doughnuts at McDonald's units as part of its strategy to expand into quick-service restaurants.
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Krispy Kreme aims to "unlock shareholder value" and concentrate on its core strategy of producing, selling, and distributing fresh doughnuts daily.
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Insomnia Cookies experienced a 24 percent growth in revenue in Q4 2022, driven by strong same-store sales and high productivity from new store openings. The brand's average unit volume (AUV) increased to $850,000, an 8 percent rise compared to 2021.
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Insomnia Cookies currently operates in three countries with more than 250 bakeries. Approximately 45 percent of its revenue comes from digital channels. In 2022, the brand opened 23 new stores and finished the year with 231 shops, representing steady growth.
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Krispy Kreme intends to move away from retail shop growth and focus on production center hubs that distribute fresh doughnuts to various points of access, including grocery stores, gas stations, food trucks, and smaller retail stores.
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