US-based international doughnut shop Krispy Kreme on Wednesday signed a deal to open 25 shops across Colombia.
The doughnut deal comes on the heels of a list of companies, including coffee purveyor Starbucks, announcing their entry into Colombia after a government-led campaign has invited foreign investment into the Andean country and has welcomed foreign companies to set up operations.
“This is a very exciting and important announcement for Krispy Kreme as we enter the market in South America with IRCC, the leader and a true innovator in the Colombian food service industry,” said Jeff Welch, Krispy Kreme President— International in a press release.
Felipe Baptiste, CEO of VA! Group, said he expects the deal to seal a “great partnership” with the Bogota based subsidiary, IRCC international. Krispy Kreme signed on to partner with VA! Group’s Colombia subsidiary IRCC to open shop.
Krispy Kreme sees the Colombia deal as a first in developing their presence in the South American market.
When Starbucks announced its entry into Colombia in August of this year, many viewed it as a direct competitive threat to Colombia’s Juan Valdez establishment, a Starbucks-like franchise backed by the National Federation of Coffee Growers of Colombia.
Student protesters sang out cries against multinationals and pleaded for Starbucks to “go home” during the first wave of National Strike protests that went violent and shut down some regions of Colombia from late August through early September.
Some Colombians believe the arrival of Krispy Kreme to be a delight. “I think it’s great,” says Esteban Castano, a Bogota resident. “The small Colombian pastry shops aren’t really that high quality. But another type of ‘Dunkin’ Donuts’ would be great.”
Nicolas Junca, a student in Bogota, believes it will help Colombia because of the new opportunities that the company will bring, saying the arrival of the international doughnut-maker “opens us up to the world and it’s going to generate employment here in Colombia.”
Colombia’s presence of foreign companies runs the gamut, ranging from mining and energy companies, like Toronto-based Pacific Rubiales Energy, to IT companies, like India’s technology consulting and services provider Infosys.
India’s Ambassador to Colombia Riewald Warjri told Colombia Reports that Indian businesses see opportunities in the pharmaceuticals industry, as well as business process outsourcing (BPOs) and automobile manufacturing.
“Pharmaceuticals are growing in Colombia,” said the Ambassador. “The industry looks at [Colombia] as a hub.”
For Baptiste, an expanding middle class and young, consumer-driven, urban population in Colombia could mean an upward trend of demand for consumer products, like doughnuts.
“In a market where the consumption per capita has a lot of space to grow, we are very grateful to Krispy Kreme for choosing us as its partner in developing the Krispy Kreme brand in the Colombian market,” says Baptiste.
The Ministry of Commerce, Industry and Tourism was unavailable to comment on what impact Krispy Kreme and other multinationals will have on the Colombian economy when Colombia Reports went to press.
Krispy Kreme Corporation is headquartered in Winston-Salem North Carolina. VA! Group is one of the leading restaurant groups in Colombia, controlling a wide portfolio of franchise brands. The Bogota-based company also operates in neighboring Ecuador, Chile, Panama and the US.
Interviews with Esteban Castano, Nicolas Junca
Krispy Kreme to bring shops to Colombia (Miami Herald)