Outside a renovated warehouse in South End that dates to the 1900s, the smell of sugary baked goods wafts through the air. A worker in a white lab coat walks out of a door labeled “kitchen lab” where hundreds of piping hot glazed donuts make their way down an assembly line.
Over the last several months, Krispy Kreme has quietly opened its new corporate offices and test kitchen space in Charlotte. And by the end of the year, the Winston-Salem-based doughnut maker will open a 4,500-square-foot retail shop toward the front of its building where customers can test limited edition donuts and offer feedback on what kind of recipes the bakery chain should try next.
The facility at 2116 Hawkins St., near Sycamore Brewing, houses Krispy Kreme’s global product and innovation center. The office is where Krispy Kreme has relocated its marketing, development, human resources, finance and operations teams. The facility houses about 80 employees, with space for up to 120.
In addition, a number of C-suite executives, including CEO Michael Tattersfield and CFO Josh Charlesworth, are also now based in Charlotte.
Founded in 1937, Krispy Kreme has said it will maintain its corporate headquarters in Winston-Salem. The idea behind establishing a Charlotte corporate office is to have “multiple centers of gravity here in North Carolina,” according to David Skena, the company’s chief marketing officer. He spoke during a recent tour of the newly renovated facility.
“All of the innovation (and) marketing and stuff is really focused here, but all the supply chain and manufacturing is up there. There’s a lot of interaction between the two. We can’t live without them and vice versa,” Skena said of the Winston-Salem offices.
Krispy Kreme recognized Charlotte’s fast-growing population as an opportunity to grow the company through young, new talent, too. according to Terri Zandhuis, Krispy Kreme’s chief people officer who oversees human resources.
“What’s interesting about Charlotte is many people decided ‘I want to be in Charlotte and then I’m going to find a job.’ Historically it was ‘I am going to move where the jobs are,’ “ Zandhuis said. “Now there’s such growth that I’ll set up there and find a job there.”
‘That’s not us’
The Charlotte expansion marks a new chapter for Krispy Kreme, which sold itself in 2016 $1.35 billion to JAB Holdings. That’s the German investment firm which also owns Kuerig, Panera Bread and Caribou Coffee.
Along with the opening of its Charlotte office and store, Krispy Kreme is opening a retail location in Concord later this summer. It has also renovated other shops in High Point and Matthews with contemporary store layouts, with plans to do so at Cotswold, too.
Krispy Kreme, which did not receive any incentives to relocate operations to Charlotte, moved dozens of workers into a WeWork uptown over a year ago before making the permanent move to Hawkins Street. The time in the co-working space was a way to introduce the company’s employees to working in an open concept, Zandhuis said.
In Krispy Kreme’s new South End digs, high-tech workstations and state-of-the art audio-visual systems and meeting pods dotted throughout the open space stand in contrast to the original hardwood floors and exposed red brick walls. Bright, doughnut -patterned wallpaper greets employees in a small atrium that leads to the company’s bathrooms.
Krispy Kremers, as the brand calls its employees, wear jeans and sneakers to work.
In the facility’s test kitchen, white-coat workers experiment with recipes using different flavors, toppings and fillings — bags of Skittles, Kit Kats and chocolate-covered espresso beans sitting on a table nearby are evidence of recent experiments.
The company’s doughnut production lines handle 270 of the baked goods per turn, meaning it’s possible to make small batches that can be sampled.
“For every 100 things we try, probably two or three make it in. But that’s what you do,” Skena said.
At Krispy Kreme’s shop attached to its South End offices, customers will be able to try limited edition recipes made onsite, Skena said. Some of the limited flavors the company has tried before include blueberry glaze, lemon glaze and pumpkin spice.
“Sometimes you need objective third-party opinions,” Skena said.
The experimentation is Krispy Kreme’s answer to the designer donut trend. Throughout Charlotte and beyond, companies like Duck Donuts, Your Mom’s Donuts and Pepperbox Doughnuts have been popping up and have generated large followings.
“When you look at some of these premium donuts... some of them, they do what they do and they charge $50-something a dozen. That’s not us. We want to be more accessible to everyone,” Skena said.
Experimentation is the specialty at the Charlotte test kitchen, but that doesn’t mean Krispy Kreme is getting away from its most popular doughnut, the original glazed. Employees call it the “OG,” as in, “We don’t want to mess with the OG,” Skena said.
The local labor market is vibrant and presents strong candidates to pick from, Skena said. Having creative, young minds at the corporate office will help Krispy Kreme innovate and create Instagram-worthy doughnut styles appealing to all types of customers, making the 80-plus-year-old brand more competitive.
In a bid to up their recruiting game, corporations in Charlotte have increasingly looked to refurbished old warehouses for their funky new workspaces. According to a recent survey from Capital One, 71% of millennials said they would pick a job based on the company’s “workplace design and environment.”
This year, Duke Energy opened an innovation center at Optimist Hall, a former pantyhose mill built by Daniel Augustus Tompkins, who was also built the Krispy Kreme building on Hawkins.
The Charlotte marketing communications firm Wray Ward said in May it will move its corporate offices to a 1950s-era industrial building in FreeMoreWest. Ally Bank recently opened an “innovation studio” in Camp North End.
“The type of groups who want to be part of adaptive reuse space are kind of in this war for talent. A lot of companies are turning to (these spaces) to attract that workforce,” said Tom Fitzgerald, an executive at the real estate firm JLL who marketed the space to Krispy Kreme.
Local developer Asana Partners bought the Krispy Kreme building, which totals 32,000 square feet on 2.1 acres, for just over $9.6 million, county real estate records show. Asana bought the site as a spec property, meaning the firm didn’t have a tenant lined up before the purchase.
South End, too, has become an increasingly popular place for corporations to open offices. In April, LendingTree announced it will relocate its headquarters to South End from Ballantyne. Austin-based Dimensional Fund Advisors recently opened its East Coast headquarters on the former Common Market Site on South Tryon Street.
“The growth here, the energy here, the opportunity to come into a space like this and make it so reflective of the brand, you know that was an easy win as we got in here,” Krispy Kreme’s Zandhuis said.