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How Bagels by Krispy Kreme uses virtual restaurants to sell breakfast in Oz

Driving morning demand and awareness for bagels was the challenge for Krispy Kreme in Australia. Virtual restaurants helped them win over customers and grow relevance in the AM.

  • Virtual restaurants launched

  • Rise in new, unique customers

  • Lift in incremental sales

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Krispy Kreme dreams of bagels

Krispy Kreme donuts are world-famous. But in Australia, CMO Russell Schulman explains, donuts are “seen as an afternoon and evening treat – customers are mostly purchasing for dessert”.

“So we had these big, beautiful stores waiting for people to visit us in the morning to try our new bagel range. Being an American brand – it’s round, it has a hole in it – bagels made a lot of sense for us, but we needed to educate our customers.”

Still, American-style bagels are something of a novelty in Australia. And Krispy Kreme doesn’t traditionally sell bagels globally. To launch a new breakfast item that’s rarely seen in Australia, Krispy Kreme launched a new virtual restaurant on the Uber Eats app called “Bagels by Krispy Kreme” and the breakfast market came calling.

“This was a really fast, quick, easy way to test something. From a marketing perspective – understanding our customers – it plays a huge role.”

Virtual restaurants unlock morning demand

Bagels can be found on in-store menus in Australia. But according to Russell, it’s the virtual restaurants that drove – and continue to drive – demand in the morning. “We see double the amount of sales in salmon bagels on virtual restaurants. It’s a far more effective sales-driver. The sales drastically passed our expectations in the first couple days.”

Our restaurant partner now plans to keep Bagels by Krispy Kreme on the Uber Eats app for the long haul, as a testing ground for new concepts. Russell adds that they’ve already had success introducing milkshakes and coffee items. “This was a really fast, quick, easy way to test something,” he says of his experience launching virtual restaurants. “From a marketing perspective – understanding our customers – it plays a huge role. We’d rather go down that path and continue to innovate.”