How To Scale a Convenience Store Food Brand With Dan Shapiro, CEO at Krispy Krunchy Foods
Dan Shapiro is the CEO of Krispy Krunchy Foods. He started his career as a third-shift cashier at a convenience store and worked his way up the ranks by getting promoted simply because he always showed up on time. Taking a leap of faith, Dan joined Krispy Krunchy Foods, taking the company to the top of the nationwide quick-service food industry.
Here’s a glimpse of what you’ll learn:
Dan Shapiro discusses the history of Krispy Krunchy Foods
Krispy Krunch Foods’ strategies for the future
Why many people have not heard of Krispy Krunchy Chicken despite having 2,700 locations in 48 states
Lessons Krispy Krunchy Foods learned during the pandemic
The challenges Krispy Krunchy Foods is facing
Exciting opportunities that Krispy Krunchy Foods hopes to leverage
The two worst pieces of advice Dan has ever received
What you’ll learn in this episode:
How can you promote a food brand when your food is primarily sold at convenience stores? Is advertising or developing an app a smart and cost-effective way to make your brand known so the company can grow, or is there an alternate way to scale your company?
If your brand is only sold at third-party locations, you have to find ways to promote products differently than the way restaurant owners or grocery store food brands do it. Krispy Krunchy Foods sells its fried chicken in convenience stores and does virtually no advertising. CEO Dan Shapiro says the business model they use is to put Krispy Krunchy Chicken in a location where people are already coming in for a different reason, brand it up to make it look exceptional, and it will sell itself. The main focus they use to grow is getting into more convenience stores and finding operators interested in the Krispy Krunchy Chicken brand. Its fried chicken has become very popular, expanding to 2,700 stores in 48 states.
On this episode of From Persona to Personal, Roger Hurni welcomes Dan Shapiro, CEO of Krispy Krunchy Foods, for a lively conversation about managing a brand with a unique business model. Dan explains the strategy the company uses since its Krispy Krunchy Chicken is mainly sold out of convenience stores, how its marketing approach differs from standard restaurant locations, and how the company is growing its brand without advertising.
Resources mentioned in this episode:
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Episode Transcript
Intro:
This is From Persona to Personal podcast. Today's episode is brought to you by Off Madison Ave. Off Madison Ave creates meaningful moments of brand trust and influences how people interact and engage with brands. The science behind their approach taps into your audience's motivations and desires. After all, if you're not changing your audience's behaviors, you can't truly unlock all of your brand's potential. Now, let's get started with the show.
Roger Hurni 0:06
Hello everyone, I am Roger Hurni, the host of From Persona to Personal, where I get to speak with top leaders in the food and beverage space. Before I get to today's guest, I want to let you know that today's episode is brought to you by Off Madison Ave. At Off Madison Ave, we use behavioral science to create meaningful moments of brand trust, which influences how people interact and engage with companies. Our behavioral approach taps into your audience's motivation and prompts them to shift behavior. After all, if you're not changing your audience's behaviors, you can't truly unlock all of your brand's potential. These proven behavioral models and methods are the strategic foundation for your brand success. Visit offmadisonave.com. That's A-V-E dot com. To learn more. Now today, I'm super excited to have with me, Dan Shapiro, who is the CEO of Krispy Krunchy Foods. He started his career as a third shift cashier in a convenience store and you talk about working your way up. He kept getting promoted, as he likes to say simply because he showed up on time, which might be a low bar. But in all honesty, I think that's the mark of a good employee. Dan eventually ran C-store companies. And that experience paid off as he grew Krispy Krunchy in C-stores and turned it into a national brand. Dan, welcome to the show.
Dan Shapiro 1:27
Thank you. Glad to be here.
Roger Hurni 1:31
Krispy Krunchy man, it's been around since 1989. How has that growth happened? And and give us a little background on that and maybe what does the future growth strategy look like?
Dan Shapiro 1:44
So I'm going to sort of talk a little bit about my, you know, background and then how I got involved. So as you said, I started as a third shift cashier in Austin, Texas, simply because I got stuck in Europe after college, couldn't get back lost my job, and figured I'd do that, you know, for a little while and you know, no intention of staying in and then because I was you know, ended up showing up on time, I kept getting promoted very low bar in convenience stores. So in the meantime, a guy named Neilan Urbane from Lafayette, Louisiana that's you know, so Southwest Louisiana is Cajun country South East is Creole. So New Orleans is Creole. You know, Lafayette is Cajun. So he ended up developing he was a C-store operator ended up developing Krispy Krunchy in his own convenience stores, you know, came up with the flavor profile, mild Cajun flavor, and started growing it locally, you know, was out there, you know, in his car, you know, knew other convenience store operators and was selling it. So, I ended up helping a friend of mine run a fuel job company in Independence, Kansas. So I'm flying up and down to Kansas every week. And you know, we had convenience stores, but we were also selling fuel. So I decided, you know, a fuel job can pretty much sell fuel anywhere. So I decided let's sell some fuel in Louisiana first store we ended up selling fuel to was a convenience store that had Krispy Krunchy in it. And that was the first time I ever, ever really heard or was familiar with Krispy Krunchy, and this is 2001. And so we had a truckstop in Kansas City that had a kitchen. And so I thought you know, this is a good product. Let me go run down this guy, Neil, who I did not know, and tell him that, hey, I want to bring Krispy Krunchy up to Kansas. I know he's going to be excited. So I ran him down. I told him what I wanted to do. He was not excited. I'm like, why not? He said, A, we don't know if the flavor profile will translate outside of South Louisiana and B how you're going to distribute it. Nobody's going to distribute for one store. I said that's a good point. So we agreed on a deal where we formed a new LLC, and he owned 51%. I own 49% I said let's grow it we'll see what happens. So we ended up growing it in Kansas and Missouri and I got more involved in the company. And in 2005 Hurricane Katrina hit South Louisiana, pretty much decimated the company. You know, you know at this point, he probably had about 70 or 80 stores that he was selling to and I had about 15 or 20 up in Kansas and Missouri and took down most of the stores in Louis-, in South Louisiana. So at that point, I said I'm joining the company. You know, I'm a C-store guy. So here's what we're gonna do. We're gonna grow this thing nationally. So we can be geographically diverse, so a natural disaster is not going to take the company down. And so in 2006, is when I actually joined the company as Executive Vice President. And I basically, you know, at that point, we started growing the company. So now today we have roughly 2,700 locations mainly in convenience stores. And just as a point of reference, there's 152,000 convenience stores in the United States, and about 90,000 of them are independent, meaning 10 stores or less, people don't really they think, seven elevens circle, okay, two-thirds of the C-stores in the United States are independently owned. And that's really our whitespace. Because it's, it's, you know, it's, it's easier to get an independent who wants to make money, you know, to go put it in then, then a company who's got a, you know, you got to go up through the various, you know, levels of organization until somebody finally says, yes,
Roger Hurni 5:54
Yeah, well, 2,700 locations is there's 152,000, CD stores, two-thirds of them, I think you said are independently operated. Basically, you're just barely tapping into that market.
Dan Shapiro 6:07
We got a lot of whitespace. Exactly.
Roger Hurni 6:10
So, that begs the question. 2,700 locations 48 states, I don't get it, like how have people not heard of you?
Dan Shapiro 6:23
We don’t advertise. So, I mean, basically, we don't advertise. So the model is put our concept in a location where people are already coming for a different reason. Brand it up, make it look like it's something and it'll sell. So we don't really need to do a lot of advertising, we get contacted all the time from people who want to advertise, it doesn't, you know, we don't really need it that much.
Roger Hurni 6:51
Interesting. Do you? Do you feel? I don't say that advertising, the end all be all of everything, generally, is it you can easily grow a great brand with the way you have through word of mouth through, you know, the experience of it. There are lots of ways to grow a brand. But you ever feel like not advertising, but is there some kind of brand reputation management that you might want to embark in? To just get your name in the same list of competitors when people start rattling off? Chicken stores? You know, chicken fried chicken chains?
Dan Shapiro 7:36
Yeah, I don't know. That's a great question. You know, there's something cool, I think about being everybody's little secret, you know, so when, you know, when people see us, you know, like, I when I travel on planes, I wear my Krispy Krunchy shirt. And either people have never heard of us or they think it's their they think it's the best chicken out there. And it's their secret. You know, when people will come up, I mean, I'll have flight attendants, they'll come up and they'll like, as they're passing the aisle, their vote, my favorite chicken. And of course, I'll ask him where, what where do you, you know, Miami or New York? So I have a one of our US Senators Bill Cassidy sends me pictures of Krispy Krunchy outlets that he passes, you know, as he travels, so, you know, it's just, it's just cool. You know, having that sort of unknown we were. So there was a Wall Street Journal article a few years ago, where they, they interviewed this one of these celebrity chefs, Dale, I'm gonna get his name wrong. I can't remember Tilldale or something. Anyway, and he was talking about that there's this little place in New York, near him, called Krispy Krunchy. And this is he said, it's, it's America's best fried chicken. He said this is. And so this was in the Wall Street Journal. And we were like, holy crap, you know. And so from that Thrillist, did a whole article on us and it was it was called something like, America's best fried chicken chain you've never heard of. And so, you know, then we sort of liked that we embrace that. You know, people call it gas station chicken, which we used to I mean, we hated right, but now we've, we've, we've lived with it. We started embracing it. So yeah, sort of cool.
Roger Hurni 9:42
No, I get, I get the cool factor of that. On a personal note, I happen to love chocolate, but I particularly love orange chocolate and there there was a place I grew up in New York that had orange chocolate, and I kind of feel like It's a little best-kept secret kind of thing because most people don't combine those two flavors. You know, everything's peanut butter and chocolate, because every season, so I understand the little like, best kept secret thing. But you said you were thrilled about the Wall Street Journal article wouldn't, wouldn't it be important to you to do more of that kind of stuff, just from a b2b perspective to help tap into the market opportunity that's in front of you for another 70,000 stores?
Dan Shapiro 10:31
Probably, yeah. Especially for you know, so any kind of advertising that we do, is really geared toward operators more than the, you know, what, my daughter who is who works for our company, and she sort of does, you know, marketing and social media. And she could we call those the eaters, and there and so. So we do, you know, the advertising, we advertise in convenience store, magazines, you know, there's about three big ones. Right. And we do trade shows, you know, you know, we do knacs, which is National Association of convenience stores. So, for our model, if we can get more operators interested in us and wanting to do us, that's really where the growth will be, I think.
Roger Hurni 11:30
Yeah I mean, just, I deal a lot with consumer behavior. And I don't think advertising is your solution here. And I and I'm certainly not suggesting, hey, go find an agency, go do whatever you need to go do. I think that there's a bifurcated approach that seems to be apparent. One of the operators as you aptly pointed out, the other opportunity is you have a fan base, I mean, they are incredibly loyal. And they're keeping this as a secret, there's an opportunity to tap into that fan base, it seems, and build that community, and allow that community to help get you additional organic growth. So it sort of becomes a bottom-up where they go to their Steam Store. It's like, why don't you have Krispy Krunchy here, you know, that becomes this other groundswell that you could tap into food for thought, free advice, you know.
Dan Shapiro 12:24
We may need to hire you as a marketing guy, you know, so, you know, I don't know. I mean, so, I'm not a marketing guy. You know, I'm, I'm an operations guy. And, you know, yes, you're right. I mean, if I could have, you know, the public going out there demanding that the C-store get Krispy Krunchy, that would be awesome. Right, so yeah, and, you know, and maybe social media is the way to do it. But there's a lot of social media, you know, going on around us or a fair amount. And, you know, we have, you know, hilarious TikTok videos that people do with Krispy Krunchy. You know, we've had a couple of celebrities to some TikTok videos, you know, their little secret, you know, food that that they like, you know, their guilty pleasure. One was asked, and she said Krispy Krunchy and of course, we were blown away.
Roger Hurni 13:23
So pardon the pun, no, actually don't pardon the pun food for thought it was just the thing about let's shift gears because I'm kind of curious about a couple of other things. The pandemic really messed up a lot of people, I have a funny feeling, it didn't change your business, and it probably enhanced comfort food, particularly fried chicken, geez. You know, I gotta imagine you did well during the pandemic. So I'm kind of curious to hear about that and were there any lessons learned going through it?
Dan Shapiro 13:55
So we did do well, during the pandemic, I will say it scared the hell out of us when it first started. And, you know, because, you know, convenience store, well, there was labor issues all over the place, because people were afraid, you know, we ended up you know, shipping signs out to all of our C-store operators, you know, signs, you know, that could put in their store that you know, yes, we're open, you know, convenience stores ended up being a central businesses and were not closing and every convenience store executive I talked to told me that you know, 2020 and 2021 ended up being being their best years in terms of sales volume, and it's really because in my opinion, a lot they got a lot of new customers because especially think about small towns restaurants are closed bars are closed where you're gonna go, you know, you're gonna go, so there were new customers who wandered into these convenience stores, you know, whether they were doing Krispy Krunchy or another food, you know, they're now you know, buying food from a convenience store, which they've never from a gas station, quote unquote, which they've never done before. And finding out, you know, it's pretty damn good, you know, and so we ended up with new customers convenience stores ended up with new customers.
Roger Hurni 15:22
You know, it's, again, it's not surprising because people turn to comfort food. In any type of crisis, obviously, the pandemic being one, we're now facing another one, potentially with a recession. And I can see it happening again, in the work I've done with consumer behavior, there's, there's been a shift in dining habits where people after being cooped up in their house for so long and making meals, you know, wanted to go out a lot more experiment with different kinds of restaurants. Are you, are you seeing a shift with that dining habits to like, okay, we're gonna go get now that we're used to this, right, a behavior can be singular, but a habit, you know, that takes place multiple times over a period of time. Now that people who'd never been to a convenience store before to go get chicken and have now experienced that, are they continuing to like a Sunday is going to be our once, like, go out and get a meal and bring it home or on Tuesdays, because we're really busy. It's a convenience thing. And they can sort of assemble a meal at home by by doing that, how is that dining experience changed post-pandemic for you, with your customers, or is it, has it not?
Dan Shapiro 16:40
So it has changed. You know, it has softened since you know, since restaurants and everything else open, everybody's having labor issues now. So that's one of the big, that's when you know, whether you're a poultry plant or a convenience store, there are labor issues going on. So so that's one of the issues that everybody's having, in addition to that, so one of the and I'd forgotten to mention this, but during the pandemic, we embraced the delivery apps hard. Right? And, you know, so so a lot of our convenience store operators ended up getting on, you know, UberEATS, DoorDash, etc. So and so that became a piece of business that they hadn't had before. And for some of them, it depends on geography. Some of them, it's pretty significant.
Roger Hurni 17:37
Well, I mean, I see where that makes total sense. But again, people are sheltered and they want people to come just bring it to the door and sort of drop it off. I noticed that speaking of apps, I noticed that the and correct me if I'm wrong, I noticed there was an Android app for Krispy Krunchy, but I didn't see an iPhone platform app for it in my research. Is that by design? Or how are you using the app? I know, I know, branded apps are a really big deal for rewards programs for communicating one-to-one at scale with customers, there's a lot of opportunity there. What are you doing in that arena? Or is that just sort of a fluke, one-off?
Dan Shapiro 18:21
That's a fluke, one-off, so it's, it's so so because our model is convenience stores, and we're not a franchise, and we're a piece of their business? So you know, we're 20% of their business or something like that. Right. And you have so many of these independent operators. So unlike a real franchise, where the week they could say, okay, you know, it's going to cost you, Mr. Operator, $25 a month for each one of these stores to have, you know, to be on the app. We can't do that. I mean, we tried. But, you know, we couldn't get enough of our operators willing to pay $25 a month, or whatever it was, it was roughly that. So, you know, and we're not we can do 2500 or 2700 locations times, $25 times 12 months, so we're not going to so anyway, so we haven't done an app. I mean, we did an app as a test. And, you know, unfortunately, it's really not operating anymore. Because of that.
Roger Hurni 19:31
Well, I mean, again, food for thought, you know, I personally wouldn't charge them anything, you know, to create the app.
Dan Shapiro 19:38
Right, but we I mean, it will cost us that much that money. So what I'm saying is, you know, do the math, do you know 2700 times 25 times 12. And it's pretty significant. And you know, and I'm making up the 25 but I will have something like that. So it was just something we weren't ready to do. You know, so, you know, we and we may play with it in the future again. Now that we, we, you know, we've grown some more.
Roger Hurni 20:08
Yeah, well, some free advice, I think there's a different approach there for you. And that would be, you know, create the app, don't charge them geofence 2500 locations, and use proximity to like when someone's driving by or behavior. And they've not been in a Krispy Krunchy, say, in two weeks, or by a location in one of those geo fences, send a push notification to go by, you'll make up the money on the back end of the purchase. But, again, food for thought, good piece of advice free for being on the podcast, and I totally appreciate that.
Dan Shapiro 20:43
So let's, let's go we love and, and we are amateurs. Okay, so we're still, you know, so anything like that is, you know, we certainly think about and see if it makes sense for
Roger Hurni 20:56
hopefully, this is a two-way street here and learning experience, and it's good lessons for you. And I love when people get out of the conversation our listeners is, hey, I've never tried that, or, you know, this guest really gave me a good piece of advice on a core value or something interesting with how they've grown the business organically. And, and that's really, truly the essence of the podcast. So hopefully, people are out there, taking notes from what you're saying, when I'm saying and, and learning and going out forth and prospering. Let me let's, let's pick up one more time. So I'm kind of curious, like, you got this great growth, you experimented with a couple of things, you have a certainly a massive opportunity in front of you. What's keeping you up at night? Like what challenges are you facing now that gives you pause.
Dan Shapiro 21:51
So we have a lot of new salespeople and a lot of new employees, you know because we've grown and we've hired people, great people. And we really need, so there's a lot of training that has to happen, in my opinion for them. So, you know, we have to vet a store, for example, you know, not all stores, you know, we can't just go into any store that wants us there's got to be, you know, foot traffic, and you know, and, you know, we can't save a store that's struggling, it has to be a viable store. So first of all, how do you vet a store? So, you know, for a salesperson, and then the second and tougher piece is how to vet an operator? Right? You know, because as one of my old or experienced salespeople told me once, some years ago, I said, I'd, I'd rather have a good operator in a crappy store than a crappy operator and a good store. And he's absolutely right. You know, and the problem that we find is that we have, you know, remember where 20% of their business. So, this is not a franchise where they paid, you know, a franchise fee, and, you know, and they had to go and get a building, and, you know, and that sort of stuff, you know, and it's their whole livelihood, we're just a piece of their business. So it's easy for an operator to, you know, sort of put us on the back burner, and hope that it'll run itself, and it won't. And so our salespeople have to be in there, they have to be, you know, making sure it's run correctly, helping the operator who may have no food service experience, you know, we do a lot of training, you know, when we open a store, you know, we have a trainer, one of our trainers in the store for you know, for for five days, and then they come back for two days afterward. So, you know, so we do a lot of training like that. But then there's the actual managing of the store and running of the store. And, and so our salespeople really have to be in there assisting in inventory control and margin control, and all that sort of stuff, as well.
Roger Hurni 24:13
Yeah, I get that. That's a lot of heavy lifting for them for them to do. That said, now that you've got to give him me, like what keeping you up at night, let's pivot 180 degrees. kind of curious as to what you're really excited about, beyond the whitespace opportunity in front of you. So
Dan Shapiro 24:43
Well, that's what I'm excited about. I'm excited.
Roger Hurni 24:45
I know you're excited about that. I'm trying to beat your dad.
Dan Shapiro 24:50
So we're doing a lot of different things. So one of the things we're trying to do is so, you know, we want to develop a really good chicken sandwich because that's the big thing now, right? Sandwiches are huge for car and I'll tell you, you know, Popeyes put sandwiches back on the map. And now everybody's getting sandwiches, and you know, and it's so and we want to have, you know, a really good, you know, our chicken, I do believe our chicken is as good or better than anything that's out there. You know, it's, it's an, you know, it's marinated, you know, it's infused with a, you know, a mild Cajun spice. I can't say, you know, we have a chicken sandwich, that's decent. It but it's not as good as anything out there. So I'd like to, you know, I'd like to get a better chicken sandwich. You know, and then there are some other so we're we're actually in the Smoothie King Center, which is where the New Orleans Pelicans play. So that's unusual for us. Because, you know, that's not a convenience store. You know, we're in a few casinos, which is also unusual. So, you know, and then and then we constantly get requested International. I mean, we constantly have international requests. And in fact, so you know, right now, you know, we're, we're looking at a potential South Africa, we're, you know, and so, anyway, those are, those are some pretty exciting things, I think.
Roger Hurni 26:27
Excellent. I find it fascinating that you have done the opposite of Krispy Kreme. Krispy Kreme had their own stores, and they went into C stores, which hurt their brand. You start off in C stores, but your brand is so strong and so good. It's now trying to expand either organically or by design or both out into other opportunities that aren’t C stores, and it's being accepted. And I just there's no question there is more of an observation on it just sort of fascinating that, you know, one brand tried to expand by going into C stores and theoretically failed. And your brand coming from C stores is succeeding wonderfully.
Dan Shapiro 27:20
So we actually, we opened our first Krispy Krunchy in Walmart, in Phoenix, as a matter of fact. And we're this week, we're opening to more so our next two in Florida. So that, you know, that came out of the blue. And so that's, that's exciting for us, you know, because we just get a lot more eyeballs on our, on our brand that way. Yeah.
Roger Hurni 27:48
Well, you had been really great. I only have one more question, Dan. You, there's been just some really great things from this conversation. I think people will take away. But I've always found every situation has a learning opportunity to it. Everyone's always asking him questions like What's the best advice you've ever gotten? I'd actually like to know what's the worst advice you've ever gotten
Dan Shapiro 28:34
The worst advice? Let's see the worst advice I've ever gotten. So so the worst advice was actually from the company that I was helping up in Independence, Kansas, when I decided to give them notice, and tell them that I was going to go and you know, do this Krispy, Krunchy thing, which at the time was nothing or very little. And the worst the advice they gave me was, don't do it. Stay here. And so you know, and so I didn't. I didn't take their advice. It's probably the worst advice. The other worst advice was, I guess, at a college let's go to law school, which I also didn't do.
Roger Hurni 29:17
Well, it worked out so there you go. There you have it. It worked out. Well. You've been very gracious with your time Dan and I appreciate it immensely. Everyone I've been speaking with Dan Shapiro the CEO of Krispy Krunchy Foods. Dan, where can people learn more about you and Krispy Krunchy?
Dan Shapiro 29:36
So they can go to our website krispykrunchy.com. And remember, you got to do it with K so Krispy with a K, Krunchy with a K dot com. And, and you can learn all about us on the website.
Roger Hurni 29:51
Wonderful, wonderful. Well again, thank you so much, Dan. I am Roger Hurni and we will see you next time on From Persona to Personal.
Outro:
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