Kreme Vs. Cream

In May, Krispy Kreme (KKD) joined a long list of companies blaming the low-carb fad for subpar earnings. But if Atkins is destroying the doughnut market, how to explain the smash U.S. debut of Japanese cream-puff maker Beard Papa's? When the chain opened its first two American outlets in New York this spring, lines for the $1.25 pastries began snaking around the block. Already a $189 million empire in Asia, Beard Papa's will open five more stores this year, including another in New York and locations in Los Angeles and Washington.

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