McDonald’s announced plans to sell Krispy Kreme doughnuts at its restaurants nationwide by the end of 2026, starting in the second half of this year. The partnership will be exclusive for the duration of the agreement, allowing McDonald’s to serve as the fast-food partner for Krispy Kreme in the U.S. Krispy Kreme uses a “hub and spoke” model to efficiently distribute its treats, with production hubs sending freshly made doughnuts to retail locations daily. The partnership with McDonald’s will allow Krispy Kreme to expand its reach significantly, as it currently delivers to 6,800 third-party stores and aims to fulfill orders for 7,500 McDonald’s locations.
Krispy Kreme has been expanding its distribution capacity to accommodate the partnership with McDonald’s, as well as to meet the demands of other new customers like grocery and convenience stores. With the addition of McDonald’s as a customer, Krispy Kreme’s production lines can increase volume while keeping costs relatively low. The overall efficiency and productivity of the distribution network is expected to improve over time due to the increased demand generated by McDonald’s and other new customers.
The partnership between the two chains began about a year and a half ago, with McDonald’s testing Krispy Kreme doughnuts at nine restaurants. Following positive customer feedback, the pilot expanded to about 160 restaurants in Louisville and Lexington, Kentucky. The initial restaurants will continue to sell the doughnuts during the national rollout. McDonald’s sees the addition of Krispy Kreme doughnuts as a way to enhance its bakery and breakfast offerings, complementing its recent focus on coffee.
Krispy Kreme’s long-term outlook includes reaching over 100,000 points of access globally for its doughnuts, up from a previous projection of 75,000 locations. The chain currently operates in 39 countries and is looking to expand its presence further. Despite the positive news, Krispy Kreme’s shares have fallen 20% over the past year, with concerns about competition from weight loss drugs impacting future sales. McDonald’s stock has risen 2% in the same period, driven by consumers seeking affordable food and drinks.
Overall, the partnership between McDonald’s and Krispy Kreme represents a significant opportunity for both companies to enhance their offerings and reach a broader customer base. With McDonald’s plans to open 900 new locations nationwide by 2027, and Krispy Kreme’s expansion in distribution capacity, the future looks promising for the successful collaboration between the two iconic food chains.
