Amidst the stress from the upcoming presidential elections, there is some good in the country that Americans can still take comfort in.
McDonald’s and Krispy Kreme have announced a partnership to sell Krispy Kreme doughnuts at McDonald’s restaurants nationwide by the end of 2026.
That’s right, Americans can soon have a glazed doughnut with their Big Mac. Talk about living the dream, like imagine it happening to Singapore one day…
The rollout, set to commence in the second half of this year, is expected to take about two and a half years due to the significant expansion required for Krispy Kreme’s distribution network.
Shares for Krispy Kreme Soars
As a result of this collaboration, McDonald’s will be the exclusive fast-food partner for Krispy Kreme in the US.
The announcement led to a surge in Krispy Kreme’s shares, which soared 39% following the news, marking one of its best days in the stock market.
Krispy Kreme operates on a “hub and spoke” model, where production hubs, either stores or doughnut factories, distribute freshly made doughnuts daily to retail locations like grocery stores and gas stations. This efficient system enables Krispy Kreme to make and distribute its treats effectively.
Partnering with McDonald’s presents a significant opportunity for Krispy Kreme to expand its reach.
The doughnut chain currently delivers its products to 6,800 third-party stores. McDonald’s, with approximately 13,500 restaurants in the US and plans to open 900 new locations by 2027, provides a vast platform for Krispy Kreme to tap into new markets.
Krispy Kreme CEO Josh Charlesworth stated that the company aims to service about 6,000 McDonald’s restaurants with its existing infrastructure, primarily consisting of doughnut shops with excess capacity.
Additionally, Krispy Kreme is enhancing its capacity to reach roughly 7,500 McDonald’s restaurants that it currently cannot access. This expansion aligns with Krispy Kreme’s strategy to land in grocery and convenience stores that prefer national suppliers.
The relationship between McDonald’s and Krispy Kreme began approximately a year and a half ago with a test phase involving nine restaurants.
The success of the test led to the expansion of Krispy Kreme doughnuts to about 160 restaurants across Kentucky. Feedback from McDonald’s customers during these tests exceeded expectations, prompting the decision to roll out Krispy Kreme doughnuts nationwide.
For McDonald’s, the addition of Krispy Kreme doughnuts enhances its bakery and breakfast offerings.
Customers will have access to a variety of doughnuts, including the original glazed, chocolate iced with sprinkles, and chocolate iced cream-filled, available individually or in packs of six, throughout the day.
Looking ahead, Krispy Kreme anticipates reaching over 100,000 points of access for its doughnuts globally, up from its prior outlook of 75,000 locations.
Despite concerns about potential competition impacting future sales, and shares falling for both companies over the past year, both Krispy Kreme and McDonald’s remain key players in their respective markets, with McDonald’s boasting a market value of $201 billion.
