Krispy Kreme boss shrugs off UK’s tightening anti-obesity rules

Krispy Kreme’s chief executive has hit back at UK restrictions on where unhealthy foods can be sold in stores, saying consumers can be “trained” to look for its doughnuts in different locations.

Rules controlling foods high in fat, salt or sugar have been in partial effect in the UK since October, barring large stores from placing such items in prominent positions near checkouts and store entrances.

Although more restrictions are expected in the coming months, Mike Tattersfield said the North Carolina-based company would push for growth in the UK market by exploring new ways to reach customers.

“You do have a short-term displacement,” Tattersfield told the Financial Times, “but the opportunity starts to be that you just continue to train your customer in different parts of the retailer and other retailers that we are not in today . . . We’ll look at the channels to continue to maximise growth.”

“Whenever you have regulations that kick in and as you shift business, customers still continue to look for what we do,” he added.

In the UK, Krispy Kreme sells its doughnuts in supermarkets such as Tesco and Sainsbury’s, as well as in standalone stores.

The company, which serves 32 countries, posted $54.9mn in profits for the first quarter ended April 2, up 12 per cent from a year earlier. While it does not disclose UK-specific profit figures, those for its international segment declined 21 per cent to $13.6mn, due to cost inflation.

Asked if he sees a threat from healthier alternatives to Krispy Kreme’s doughnuts, Tattersfield said he believed it was unlikely that people would start consuming these items regularly.

“I don’t see the world changing to kale cake for their break every single day,” he said. “No disrespect to kale, but it’s not that much fun to share.”

Tattersfield’s comments underscore the challenge for the government in trying to promote healthier eating and reduce intake of foods with high sugar, salt and fat content.

Dirk Van de Put, chief executive of Mondelez, which owns confectionery brands including Cadbury and Milka, said in January that although the UK rule change had deterred some “impulse buys”, sales were “holding up quite well” as stores found secondary locations to promote the products.

The effect is “far from the magnitude that we could have taken and I’m expecting that [as] the consumer gets used to this new set-up of the stores that the volume growth will come back”, Van de Put added.

In addition to the new location rules, the Department of Health and Social Care plans to implement restrictions on volume promotions for specified foods — including buy-one-get-one-free deals — this October.

The rule has been delayed for a year to “allow the government to review and monitor the impact of the restrictions on the cost of living in light of an unprecedented global economic situation”, the department said last May.

There will also be restrictions banning adverts for foods with high sugar, salt and fat on TV before 9pm and paid-for adverts online, taking effect in 2025.

Krispy Kreme relisted in 2021 following its acquisition in 2016 by European investment group JAB Holding.

In the US, the company is expanding its channels by piloting at 160 McDonald’s restaurants.