382: Capturing Cultural Moments and Power Partnerships with Dave Skena, Global Chief Brand Office...

Hey, thanks Alan. Thanks for having me.

Yeah, there are definitely worse things you could talk about.

Oddly enough, I did, which totally helped me out when I was interviewing for this job, by the way. So that did work out. But I was on a vacation. I grew up in Pittsburgh, and we had gone on vacation in North Carolina, and my mother, we'd heard about Krispy Kreme, but there was some cool donut or whatever, and we didn't know much about it. Anyway, we went to one and it was great. And my mom said, I was probably about 13 at the time, and we sat down and we walked in and we were going to get a donut, and my mom got a cup of coffee, and they just gave us a donut. And that's what I think made it memorable. And then I had the donut, it was hot, it was fresh. So we certainly lucked down, and when we got there, they gave us each a donut for free. And honestly, I think that's what made it stick with me. You know, what kind of company gives their best product away for free? But they had asked us if it was our first time at Krispy Kreme, we said yeah, they handed us a donut. And then honestly, I remember that puts you in a good mood. You're usually in a good mood anyway, and you sat down, we had our donut, and my mom and I talked, and it was one of the first times I remember anyway my mom telling me a lot about herself when she was younger. And it was honestly a pretty cool moment. And it just happens that I remember my first experience with Krispy Kreme. But as I've had this job, I realized a lot of people seem to remember their first time with this brand in ways that you don't always remember the first time you had an experience with a brand. And I think that's pretty cool. I think that's a unique thing. There aren't a whole lot of brands where you can remember where you were the first time you had it. And I really do, and I think a lot of people do, and I think it's a special kind of brand.

Yeah, I think there's a lot of reasons the brand's special, and I'm sure we'll get into that, but that's definitely one of them. Not a whole lot of brands are easily shareable or show you their entire manufacturing process before you eat it. It's just got a lot of unique things about it.

Yeah, well, you know, I guess it's probably like most people's pathways in careers. It sure as heck isn't a straight line. I'll take you in the way back machine. I thought I was going to be an economist. I studied economics and political science undergrad, and then absolutely none of that happened. I got my first job at Anderson Consulting, now it's Accenture, and I loved it actually. I loved everything about it. But I was, with my Poli Sci degree, immediately put into coding computers for inbound shipment interfaces for large companies. And that was probably not the highest best use of my brain. I found out there are a lot better computer programmers than me. But I noticed that all these CPG companies I was consulting to, the people that either ran the company or influenced the company a lot, they came from this function I knew very little about called marketing. And I thought marketing was just advertising, just communications, like probably a lot of people. I didn't really know what brand management was. But I started to see what it could be. And so I said, well, that sounds like something I want to be involved with right there. And so I went to Kellogg Business School and I started over. And I took a big pay cut after my MBA program and coughing up that money to go into an entirely new industry. And I started, I was lucky to start at Kraft Foods, which was a fantastic training ground, absolutely top-tier training and academy kind of company. It was great. And then after about six years there, I'd had three kids by that time, my wife's family was down in Plano, Texas, and a couple of my good friends moved from Kraft to PepsiCo and their Frito-Lay division. And so it was at that point, even though I loved Kraft, a pretty easy choice to go down to join Frito-Lay. And I spent about 10 years at Frito-Lay in a whole bunch of roles, and I absolutely loved it. So I got to experience big brands and small brands, brands with lots of money and brands with not so much money, and entrepreneurial brands. And it was just awesome. And then I felt like it was time to have the big seat in becoming Chief Marketing Officer. So I left consumer packaged goods for the first time and went into restaurants at a chain called Ruby Tuesday. We were taking it from being a public company into a private company, and then we completed that. And I took on my next role here with a little bit more to it here at Krispy Kreme. So that's the quick and dirty path there, but lots of zigs and zags along the way. But for the last 20 years or so, all in marketing.

Yeah, I feel like I could have probably carried most of the chip boxes with little to no effort. I think that if I'd been in that role, I would have probably eaten all the inventory. I love all the products. My daughter's actually starting at PepsiCo here in a couple weeks. And I just think I've been so lucky to have a couple absolutely extraordinary companies that taught me how to perform in an environment that's a little smaller, more entrepreneurial. And I think it's been a huge benefit to me in my career to have those guys in my background.

Yeah, I mean, there's a lot that's different about Krispy Kreme. And I feel when you look backwards, your experience makes sense in leading you to this one place, but you never would have guessed it looking forwards. Because if I hadn't had the restaurant experience at Ruby Tuesday, I don't think I'd understand that aspect. If I hadn't had all the traditional classical marketing training from CPG, I don't think I could be as effective here either. Because Krispy Kreme really is sort of a hybrid model. We have our fresh shops, our theater shops where you have, which is most of what we have in the United States, these theater shops where you get that hot fresh original glazed off the line. We also have these fresh shops which don't have the production in them in a lot of areas of the world, just have the donuts. And then we have what we call Delivered Fresh Daily, or DFD, which is our donuts available in grocery stores, which has all the aspects of shopper marketing and retail logistics and all that. And so it is a really different model. It is something that you just don't see with other restaurants or something within CPG that you just don't see them extending into own retail like we are. So without both of those things in my background, which I never could have planned, I don't think I could be nearly as effective. And that model is one big difference. This sort of omnichannel company where we're trying to make sure we get extremely fresh product, whether it's e-commerce or in a grocery store or of course in our shops, is a challenge because we are a fresh donut company. And fresh is critical. Fresh is what makes it light and airy and delicious and all that. So we've always got to deliver on that product promise and the brand promise in every one of these channels. And that makes it very unique. And to deliver something of such, I mean, it's accessible. Krispy Kreme donuts aren't super expensive, but they are premium in the sense that it's something you're not able to get with another type of donut, another type of snack. So that makes it really interesting. But I think one of the cool things about Krispy Kreme and the thing I love the most is what you talked about at the beginning. I'm blown away. When I worked at Frito-Lay, one time I got to tour the plant in Irving, Texas where they make Doritos and Cheetos and stuff, and you got to sample a couple right off the line. There was this hot experience. And when you can have a product fresh off the line, it will be incredible. That's an incredible experience. There just aren't too many companies on planet Earth that want to show you from the time you make the dough to the time you put it in your mouth the entire manufacturing process. And you can see how fresh it is because you could watch that thing from the moment it was put in the hopper to it was in your mouth. And I think that's incredible. And I think people appreciate that sort of authentic, wholesome experience in an indulgent product like a donut. You're getting the best, freshest thing you can get. It's awesome.

Yeah, I think we had to put that in for a reason.

Absolutely. You know, it kind of does start with the product, though, because not everybody could replicate what we do the way we do because the product itself is something that makes you feel good. And then on top of it, you can share it, which also makes you feel good. So when the pandemic hit especially, but we've always been generous with sampling and things like that, we thought about what kind of role can we play here? We all remember what it was like when everything shut down and all the uncertainty. It was a very serious situation. And even in those most serious situations, there must be a way where something, a product like ours which provides comfort and joy, we could do something there. And so we thought about what's our role in this thing? Well, we're not the doctors and the nurses. We're not the healthcare professionals. But we can show them we appreciate them. We're not these graduates who just had their last few months of school robbed from them, but we can show we feel for them. And so we created these things called Acts of Joy. And the first one was free donuts to healthcare professionals every Monday for eight weeks with no strings attached. Just show up and tell us how many donuts you want, and we just gave them to you. Which was pretty insane, right? It is now that you think about it after the fact. Well, definitely that was a word they used to describe me at the time. But a crazy thing did happen. In that first few weeks, we got our clocks cleaned. People came in, we didn't sell much because people just lined up to take everything for free. And then a crazy thing started happening. In hindsight, and even right there when we did it, it did a few things for us. It reminded people in a very obvious way that hey, we're open. And a lot of things weren't. So without even really having that as one of its main intentions, it created awareness that Krispy Kreme's still open, which was huge for a brand with a relatively low media spend, communications budget, all that stuff. So that was great. And then two, I think people thought, look, these guys are trying to do something. They're trying to be part of bringing a little comfort, a little joy to this. And in the days that weren't Mondays, our sales started booming. And people, I think, were pretty pleased with us. And then we did that. So that was one. And more and more as we went through, even the healthcare professionals who we wanted to give everything for free would say, you know, I'll have a couple original glazed, but can you please let me pay for three or four more dozen for the crew? And so it turned into a really good thing not just for the brand but also for the business. Because we're trying to do that, of course. One of the things that made it all work was the earned media was newsworthy. And so the word got out. The word was able to get out because the news media thought it was so counter-cultural almost that somebody was being so kind in a time we really needed it. We were all appreciative of the healthcare workers at that time. That was really the first thing where we said, well, this makes sense for our brand DNA. We have a product that can bring a lot of happiness to people and make them feel good and just bring a little smile in a tough day-to-day. And then we thought about where else do we have these kinds of things? We came up with a dozen, we called internally Acts of Joy, and we just started doing them. Another big one that we felt great about was graduates. High school graduates who had all that last few months of graduating stripped away from them. And we, at drive-through only, said, hey, wear your cap and gown or anything from your high school and give you a free grad dozen on this certain day. And we didn't know what would happen with it, but the traffic started early, it lasted all day. We had a few situations where our ops leader would call me and be like, oh my God, Dave, the police want to shut the store down because of the traffic jam. And it was like the pain and horror in her statement. I was empathetic to her, don't get me wrong, but that was also like my expression was like, oh my gosh, it's working so well. The cops, let's try this out. He has a different feeling. But we did work through all that. We learned a lot, and we made a lot of people happy. And I think those graduates, I like to think they'll remember that for a long time. We got so much positive praise for that. And then flashing forward a year later when the vaccine came out, and I know in later days there's some controversy about that, but we just thought, how can we encourage society to get us past COVID? And part of that, we thought at that time, was to encourage people to get this vaccine when it came out. So after it just came out for the elderly but before it hit mainstream, we said we'll give everybody who got the vaccine, just come in, tell us if you got it, and you can have a donut every day, each day, every day for the rest of the year. And that was taken advantage of by a lot. And again, one of the keys to make all this stuff work was you have to do something so interesting and so provocative that the media wants to talk about it. Otherwise, it runs the risk of going unnoticed. So those are a few of the things we did. And we continue to look for more. And we have a lot of fun things that aren't so societal. We love science and STEM. So we've done a Mars donut, we've done one celebrating Artemis, we've done a strawberry moon donut. We've just got a thing for science because we know a lot of teachers use those events to teach their kids about science in high school or grade school. And donuts are always a fun way to engage people.

Yeah, exactly. It's like a little kid moment. You know, go get your vaccine and then Mom or Dad will get you a small toy.

Yeah, I mean, we don't really view happiness or anything like that as something that's a fixed pie, or brand love as some sort of fixed pie. And what we found is when we collaborate with other brands that perform a similar function that people love, especially like a Hershey's or an Oreo or Biscoff, people love that because people love more than one product. They love more than one brand. So when you can put them together, sometimes it's one plus one equals a lot more than two for them. It's just a really great treat. And we welcome them in. They help us. There's such great collaborators, most of these partners we have, whether they're Oreo or Chips Ahoy or Hershey's or Good Humor and so on. We try to partner and collaborate with other sweet indulgent brands that can kind of combine the taste of our donuts with the taste of another brand that they love. And we're always doing that. We have done that time and again, and people have appreciated it time and again. It benefits our brand to be associated with those wonderful power brands. And lucky for us, it benefits those brands to be associated with Krispy Kreme. So it's a real win-win. And it's something we've worked on a lot over the years and gotten better at over the years. In those scenes, you know, we have a lot of success on special occasions like Christmas, Valentine's Day. But these power partnerships we have with these other big sweet treat brands, they help us turn what otherwise holiday free time into a really special reason to come to Krispy Kreme and try something new. People are always interested in what kind of new things we can provide. And these partnerships and the partners we work with, they're awesome collaborators. And we keep trying to come up with new things. And there's some on the way, I promise you that.

I think, look, ultimately we're a pretty low frequency brand. We're an occasional indulgence, not something like a lot of quick serve restaurants where it's habitual, people are there multiple times a week. That's kind of not our game. So I think when we provide these partnerships, one thing we're doing is creating an opportunity for some people who it's just that nudge they need to make it worth the trip. We don't have, and don't intend to have, a hot theater shop on every street corner. That's not our game. So people tend to have to drive a little further to get to a Krispy Kreme in most areas. And we want to make it worth the trip. And so those partnerships, I think a lot of times if you love Twix and you love Krispy Kreme, that'll get you going 10 miles out of your way sometimes to make that happen. And we'll probably talk a little bit more about access because that's one of our biggest challenges with consumers. It's not having them like our product, not having them become aware of our product. It's just providing access to them. It's a big part of the strategy we talked about before. So we want to make it worth it for them to seek us out and get that extra trip. And something for them to share. So that's a big part of the strategy: how do we constantly find reasons for people to come into the shop? Because a lot of times they won't be on their way. And another way to do that is, of course, expand the reach of things so that they don't have to go further, in the local grocery store or whatever, make it easier for them to access it.

Yeah, whereas some of these partnerships you just talked about, we're partnering with an Oreo or Hershey's, they do expand the way people think about Krispy Kreme and what makes sense. 'Oh, that's cool. I hadn't thought Krispy Kreme could do that.' So there's some mental availability. Whereas our DFD program is about expanding physical access to the donut and having points, we refer to them entirely as points of access, so that people can more easily find the brand that they love. And our biggest thing that we want to reassure people is that what you see in the grocery store was made fresh, delivered fresh, put on that shelf fresh, and is the same quality product you would get at the shop. Now, we haven't quite found a way to have everyone streaming off an assembly line at your local Walmart, but maybe someday. But they are made just as fresh as the donuts on the shelf in the shop. And so that has been a big part. And over the years, we've added thousands of these access points through retail partners, grocery stores, most recently in a test with McDonald's. But we're adding more ways for people to just access the brand that they want, and have that little smile on their day, that delicious donut make their day a little bit better, even if they can't get to a fresh shop.

Well, one thing is I'm a, I guess the right phrase now is performance marketer. I don't really understand all the labels as well, but I know that I hold every penny prisoner and I want to get the most out of every dollar we spend. And marketers are fond of talking about top of funnel things. 'Oh, we did a great job. Our awareness ticked up two points.' That's nice. And you got to do that. You got to build the brand with what you do. But you've also got to build the business. So I like seeing results. And there are ways to make that marketing budget stretch. But one of the most important ones is to make sure you're constantly monitoring with every means you have at your disposal the performance of each thing you do. And if you don't have a huge budget, and we don't, we do a lot of A/B testing. So you'll test certain ad units in one market and another ad unit in another market, and then you pour all the money into the one that works best. And social media has been a huge benefit on the performance marketing side to us because you can see so quickly who your message is resonating with. And then you can spawn look-alike audiences for that message with the types of people who seem to be engaging with the ad. And you can geo-target it around your shops. You can geo-target it to make sure you're only hitting geographies where you are. So one of the big things on the paid side is the flexibility and precision that social media channels allow, whether they're TikTok, Instagram, Facebook are some of the ones we use the most. They just allow a really good degree of specialization or targeting in a value sense, or targeting ads towards people who are responding and engaging with it independent of any demographic or psychographic, and of course geofencing in an area where they're likely to visit your store. So that's one aspect of it. But I think one of the biggest things we've done at Krispy Kreme that has been enormously powerful is what we're talking about before: when you can do something that's completely in keeping with your brand DNA that becomes newsworthy and gets a massive amount of word of mouth and a massive amount of earned media PR. Where you do something so interesting or so in tune with pop culture that it becomes part of the conversation. That's how you win. I mean, you're right, we're not P&G. We don't have a billion dollar marketing budget to do all the traditional tools through frequency and bang, bang, bang on people until they buy your shampoo. I think those are great, by the way. They work. I'm not despairing. I'm just saying we need different tools. And for us, earned media and using our product as a way to participate in culture has been a way where we've gotten billions and billions and billions of earned media impressions and talk value that drives traffic. It's not just awareness. It's not just good feeling about the brand, although it does both those things. It sells, and it sells immediately.

Yeah, well, you know, and I have to say, just to for all my marketing friends who might hear this, it would also be fun to do this with unlimited resources. Yes, it's not like, just to be clear, I'm not begging for fewer resources to get my job done. It would actually be awesome to have more. But yeah, you do the best you can with the hand you have, the cards are dealt. And it's true. Small companies, and obviously I'm familiar with the book you're talking about, that theory. I do think sometimes people forget about the product. They always want to ladder up to address the emotional space and trying to occupy something there, and sometimes forget the reason to believe of why you can. Whether we're talking about Gatorade or Nike or Disney or little Krispy Kreme, right? But it starts with the fresh original glazed donut that is unlike other products. And it's very difficult to replicate. If you walked into a venture capitalist with the business model of we're going to build a manufacturing facility in every shop we have, probably that'd be hard to get. But we've done it and we've made it work over 86 years. So we already have that credibility. And that's what leads to the ability to multiply happy. The fact that we're sold in dozens is a huge benefit that we have. I mean, how many, this is crazy, Alan. This is a real thing. The overwhelming majority of our donuts are consumed by someone who didn't buy them. And maybe that seems off. Well, yeah, you bring a dozen into the office and people eat them, or you bring a dozen home like you talked about your experience as a kid. But there aren't many products where people buy them to give them to other people. I mean, no one goes and buys a dozen cars. It just doesn't happen. So that starts with some of these product attributes that you can ladder them up into this emotional space of generosity and sharing. And that is where they belong. People come to associate that with you're a brand that is generous. And so therefore we are generous, and our people are generous with our product. But you can't forget the product. I think that is the hack. Always have a good product, and then you can take it places.

I think the biggest probably experience early, even before my career started, was after undergraduate work, I went on a scholarship over to a school in England. And I didn't know anybody in the whole country. And I'd done well as a kid in college, I did all right, but was that luck? Or can you maybe perform well in a new situation? And going abroad, it wasn't England, it wasn't much of a language barrier there, but still you didn't know anybody. Everything was new. Even the way the classes work felt different. But you learned that you can perform in that new situation and do well. That meant a lot to me because it made me feel like my undergraduate stuff wasn't a fluke and that maybe this is a repeatable thing. And then getting thrown into a professional world with Anderson Consulting, which I loved Anderson so much, and having to learn computer programming on the fly. But I was never the best computer programmer, that's for sure. But I was good. I did my job well. Learning, hey, you can handle this. So I think any time you're thrown into a situation early in your career where inside you're feeling like, man, I don't know if I can do this, but then you find out you can, it's just incredibly empowering to think this could be a repeatable trend. I can do this. It helps you gain a lot of confidence. And those two things happened very early on in my career, which gave me the courage later to switch into this career I wanted to do more, which was marketing, even though I knew nothing about it in brand management, and to kind of leave a whole career behind and start over again. I think had it not been for those early formative experiences in my career, there's no way I would have taken that risk. And I think taking risk is a big deal. Having the courage to take risks is probably the best thing I did when I took some big leaps of faith. They generally got rewarded. They don't all pay out, by the way, but they usually pay out. And those early experiences gave me confidence to take some risks later.

Yeah, if I could talk to my younger self, I think the pep talk I'd give is like, hey, good job when you took that risk. Just leaving consulting to go into a new profession felt like a risk. Taking a step back in terms of pay after consulting to start over in marketing felt like a risk. Leaving a job to go to another, that's a risk. Changing industries, it's a risk. But they've all kind of worked out, right? And if it weren't for those risks, I wouldn't have the chance to do what I'm doing now. And that is the best advice I could give to my younger self or to anybody new in their careers. If you work hard and you're generally easy to get along with and you're reasonably smart, then you have everything you need to take risks. And probably that's the biggest determinant of how far people go in their careers.

Well, I know it sounds like, I actually go two ways with this. The first, I think every marketer, a lot of marketers do care about performance marketing and evaluating performance, but I think more and more marketers who just do things that have soft or loose performance metrics, I think that's going to become a less and less prominent feature of marketing over time. There'll still be some industries where the whole game is awareness and top of mind, and they can still do that. But in general, in industries like mine and CPG, I think marketers, to make their profession as strategically important as it is and should remain, need to be able to demonstrate to the CFOs that they're the best thing you can do with a dollar. The best thing you can do with the dollar. So I think every marketer should care a lot about performance marketing because I believe, I really do believe, that every dollar is an investment you can make somewhere. So our job as marketers is to show not only that we're building the brand, because we have to build the brand, but that it's a good way to spend a dollar, not just over time but also in the near term. And I think that's eminently provable with the tools we have now as marketers to show that. So I feel every marketer should be looking to sort of heighten all of marketing by demonstrating that we deliver both hard and soft benefits to a company.

Well, I think the counter trend is, at least in the US, but it's honestly not just the US, it's weird that unity is now like a zag. That's weird. You look at so much out for so long. Brands, big brands, Coke, Disney, whatever. There were just a lot of things that people agreed on and there was no division with them. And looking for ways where you can bring people together versus pull them apart is right now in our climate something that's hard to do. And trying to participate in moments of culture that are positive and not antagonistic, I think is a marketing zag that I invite any company, please join us in trying to do things that try to pull people together. I think at this point, that is something that we could really use. And I think it used to be the norm, and now I think it's becoming more unusual. And it hurts me to call it a subculture, but I do think unity is coming back. I think optimism can come back. I think caring about one another can make a comeback. And I think brands can be a little part of helping consumers demonstrate that that's where they want to be. We're not the heroes of the story. We're the tool the heroes of the story can use. And the consumers are the heroes. And if we can be a part of them trying to knit things back together, we want to help.

I think this is going to sound so cliche, but I don't care. It is AI. I mean, but maybe not in the way you think. I'm not eager to salute our artificial intelligence kind of thing. I just mean more as, honestly, when I think about AI for our marketing department, which probably like every marketing department, you use it. There's a lot of repetitive stuff that you just do, whether it's writing simple concepts, screens. There's hours and hours and hours every marketing department can save. And it's only going to get more with AI just by using ChatGPT for now. But I mean, Microsoft when they start embedding AI tools into Microsoft Office, the productivity gains I think from AI tools will be as big as going from a ledger to Excel. It will be huge benefits just in productivity. And so that's the one side. I think a group of marketers will be able to do an enormous amount more work than they can now. And there's an endless amount of work to do. So I don't really think so much about job dislocation. I think more of there won't be job dislocation for once. Maybe we'll be able to have everything planned far enough ahead like we wanted to. So productivity. And the other side of it, though, is I think as people start using this more and more, I think the ideas will get more derivative. And they'll all be things you've seen before. And so the other challenge and opportunity for marketers, I think there'll be an increasing premium on any truly original idea. Truly original ideas are going to become harder and harder and harder to come by. And I think the best opportunity for truly original ideas will come from good old-fashioned human brains. So while AI is a huge productivity tool, I also think it represents a challenge for marketers to think about how they add value when a tool like AI can knock down so many of the easy tasks.

Alan, I really appreciate you having me. I love talking about marketing and I really enjoyed talking with you.