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Sweet Expansion: McDonald’s to Offer Krispy Kreme Doughnuts Nationwide by 2026
Ticker Tea
March 27, 2024
📝 SUMMARY: In a significant move within the fast-food and bakery industry, McDonald’s ($MCD) has announced its plans to roll out Krispy Kreme ($DNUT) doughnuts nationwide across its US restaurants by the end of 2026. This ambitious expansion, set to commence in the latter half of this year, positions McDonald’s as the exclusive fast-food partner for Krispy Kreme in the United States, underscoring a pivotal moment for both brands.
The collaboration necessitates a substantial expansion of Krispy Kreme’s distribution network, more than doubling its current reach to fulfill the demands of the partnership. Krispy Kreme, which already delivers to 6,800 third-party stores, will face the challenge of extending its unique "hub and spoke" distribution model to approximately 13,500 McDonald’s restaurants across the US, with an additional 900 locations expected by 2027.
Krispy Kreme’s CEO, Josh Charlesworth, expressed confidence in their existing infrastructure’s ability to service around 6,000 McDonald’s outlets initially, leveraging doughnut shops with excess capacity. The company is also enhancing its production capabilities to reach the remaining McDonald’s locations, aiming to utilize this expansion as a catalyst for broader efficiency and productivity improvements across its distribution network.
This partnership, initiated from a small-scale test in nine McDonald’s restaurants about a year and a half ago, has already shown promising demand, exceeding expectations during its pilot phase in Kentucky. With plans to sell Krispy Kreme’s iconic doughnuts all day, including the original glazed and chocolate iced varieties, McDonald’s aims to strengthen its bakery and breakfast offerings while complementing its focus on coffee.
As Krispy Kreme sets its sights on a future with over 100,000 global points of access for its doughnuts, this partnership marks a strategic effort to grow its "deliver fresh daily" channel, promising a significant boost in production efficiency and profitability for both companies amidst the rising health and diet trends affecting the industry.
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