Sunday, October 15, 2006

Krispy Kreme and Wacky Tobacky

And now, on the "Don't You Have Anything Better To Do?" front...
Thanks to the Asheville Citizen-Times for the following article about the struggling doughnut makers' latest attempt to emerge from bankruptcy.

Krispy Kreme turns to tobacco veterans for fix, marketing help
By IEVA M. AUGSTUMS AP Business Writer
CHARLOTTE, N.C. (AP) -- Nearly two years after its stock collapsed amid an accounting fiasco, Krispy Kreme Doughnuts Inc. faces a host of lawsuits, a criminal investigation and declining sales. Meanwhile, efforts are under way in New York and Chicago to ban a key ingredient of its famous doughnuts, one that helps make the trademark treats so darn addictive.
Sounds a lot like the challenges faced by executives at Big Tobacco, and that's just where Krispy Kreme has turned to for help.
Last month, Winston-Salem, N.C.-based Krispy Kreme named Charles A. Blixt, a former executive vice president and general counsel at Reynolds American Inc., as its new general counsel. A week later, the company appointed Andrew J. Schindler, the retired chairman of Reynolds American, to its board of directors.
"They have long and distinguished careers at (Reynolds) and they left in pretty good shape. It's not a huge transition for them," said Mike Lord, a professor of corporate strategy at Wake Forest University. "Importantly, what's key is that they do have a great wealth of experience to manage under adversity."
...The latest threat is less imminent, but potentially more devastating. In both New York and Chicago, public health officials want to ban the use of artificial trans fatty acids, found in some shortenings, margarine and frying oils - ingredients in everything from pie crusts to french fries to, yes, Krispy Kreme's famous glazed doughnuts.
"These guys were successful in the tobacco industry fighting all the public health people, and here we have another industry with similar challenges," said Paul N. Bloom, a senior research scholar at Duke University's Fuqua School of Business. "I don't think Krispy Kreme can be accused by people saying they were deceived about the healthiness of the product - it's a doughnut. But that doesn't necessarily stop people from trying."
...But the company's financial troubles came at the height of the Atkins Diet craze, when carbohydrates were unwelcome on plates nationwide. And while some critics call the New York and Chicago efforts unnecessary meddling, the proposed bans on trans fatty acids are clearly aimed at fast-food restaurants such as Krispy Kreme.
For now, Krispy Kreme has one big marketing advantage over the cigarette companies - despite the worrisome trans fat push, there's no effort under way to ban the sale of doughnuts to minors, or locking away the snacks behind store counters. Still, Lord sees plenty of overlap between marketing doughnuts and cigarettes.
"It's one simple product," Lord said. "And they are both bad for you."


OMG. Lord, you have GOT to relax. Nobody who goes to the doughnut shop is looking to enhance their well-being. They want a treat, plain and simple. What has happened to America that causes an organization like KK to hire top legal minds to combat the anorexics and Atkin-heads? God forbid we should ingest something that tastes good!

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