Krispy Kreme Gets Krafty

There's a new chieftain at Krispy Kreme (NYSE:KKD). Daryl Brewster, who until recently served as the president of the North American snack and cereal division for Kraft Foods (NYSE:KFT), is taking over the troubled doughnut specialist.

Brewster replaces turnaround expert Stephen Cooper, who became Krispy Kreme's interim CEO last year, after disgraced helmsman Scott Livengood was given the boot more than a year ago. Livengood presided over an empire that crumbled quickly following accounting snafus and franchising shenanigans. Krispy Kreme's maladies initially seemed to result from the low-carb-diet craze going on at the time, but serious allegations of misdeeds at the company soon surfaced.

Krispy Kreme's fall from grace burned many investors, myself included. The debacle also stung Motley Fool Stock Advisor newsletter subscribers. Krispy Kreme proved to be a disastrous recommendation; by the time David Gardner issued a sell recommendation, the shares had shed nearly 89% of their original value. (Thankfully, David and his brother Tom have more than offset that one bad call with a ton of market-thumpers. The average Stock Advisor pick is up 59.1%, far better than the 19.1% average market return in that time.)

As for Brewster, he's definitely qualified for his new position, although I didn't expect the next Krispy Kreme leader to come from the world of prepackaged foodstuffs. After all, I'm not the only one who thought Krispy Kreme's brand was diluted by its push into grocery stores. The quality control and the eating experience associated with those market-boxed products fell far short of digging into a freshly glazed pastry under the glow of the "Hot Doughnuts Now" neon sign at the local Krispy Kreme shop.

Retail distribution is an area for improvement, sure, but I figured that it was more critical for the company to repair its frayed franchisee relationships. Executives from behemoths such as Kraft, Sara Lee (NYSE:SLE), Tasty Baking (NASDAQ:TSTY), and Flowers Foods (NYSE:FLO) could definitely help guide Krispy Kreme in the right direction when it comes to stocking grocery-store shelves, but that means nothing if the flagship stores are still in shambles.

Still, I'll give Brewster the benefit of the doubt. After Livengood's tenure, I'm hoping that things can only get better for Krispy Kreme.

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Longtime Fool contributor Rick Munarriz really did drive to a Krispy Kreme store once to collect his free dozen doughnuts after a Florida Marlins 13-hit performance promotion during the storied 2003 season. The Fool has a disclosure policy. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.