McDonald’s has recently announced a major partnership with Krispy Kreme, which will see the popular doughnuts sold at McDonald’s restaurants nationwide by the end of 2026. This is a significant move for both chains, as it opens up new distribution channels and opportunities for growth.
The rollout of Krispy Kreme doughnuts at McDonald’s locations will begin in the second half of this year and is expected to take approximately two and a half years to fully implement. Krispy Kreme will more than double its distribution in order to meet the demands of this partnership. McDonald’s will be the exclusive fast-food partner for Krispy Kreme in the U.S. during this time.
Krispy Kreme utilizes a “hub and spoke” model to efficiently produce and distribute its doughnuts. Production hubs, which include stores and doughnut factories, send freshly made treats to retail locations such as grocery stores and gas stations. By partnering with McDonald’s, Krispy Kreme has the opportunity to expand its reach significantly. The company currently delivers its products to 6,800 third-party stores, with plans to increase this number in the future.
Krispy Kreme CEO Josh Charlesworth mentioned that the company’s existing infrastructure, specifically doughnut shops with excess capacity, will be used to service about 6,000 McDonald’s restaurants. This partnership not only benefits McDonald’s and Krispy Kreme but also improves the efficiency and productivity of the distribution network over time. The increased demand for doughnuts from new customers, including McDonald’s, will help Krispy Kreme’s production lines operate at higher volumes with minimal additional costs.
The relationship between McDonald’s and Krispy Kreme began about a year and a half ago with a test run at nine restaurants. The successful pilot later expanded to approximately 160 restaurants in Kentucky. During the test phase, demand from McDonald’s customers exceeded expectations for both chains. This positive outcome led to the decision to roll out Krispy Kreme doughnuts nationwide.
With the inclusion of Krispy Kreme doughnuts in McDonald’s menu offerings, customers will now have access to a variety of options, including the original glazed, chocolate iced with sprinkles, and chocolate iced cream-filled doughnuts. This partnership is expected to enhance McDonald’s bakery and breakfast offerings, catering to a wider consumer base.
Looking ahead, Krispy Kreme aims to reach more than 100,000 points of access globally for its doughnuts. This is a significant increase from its previous target of 75,000 locations. Currently, Krispy Kreme’s products are available in over 14,100 stores across 39 countries.
Shares of Krispy Kreme have experienced a 20% decline in the past year, leading to a decrease in market value to $2.11 billion. Concerns about potential competition from weight loss drugs like Novo Nordisk’s Ozempic have impacted investor sentiment. However, McDonald’s stock has risen by 2% over the same period due to consumer preferences for its affordable food and beverages. The company currently has a market value of $201 billion.
The partnership between McDonald’s and Krispy Kreme represents a significant opportunity for both companies to expand their market presence and offer customers new and exciting menu options. With careful planning and strategic execution, this collaboration has the potential to drive growth and profitability for both chains in the years to come.
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