McDonald’s and Krispy Kreme are in talks to expand partnership

Key Points

• Krispy Kreme is in discussions to expand its partnership with McDonald’s, which began testing doughnut offerings at select McDonald’s locations in Kentucky more than a year ago. The partnership is being explored as part of a strategy to enhance customer visits to McDonald’s, where Krispy Kreme’s doughnuts would complement the coffee offerings.
• Krispy Kreme’s discussions with McDonald’s have focused on aspects such as ensuring the delivery of fresh and timely doughnuts, determining the necessary scale for expansion beyond Kentucky, and evaluating the commercial viability of the partnership. The pilot program aimed to gauge customer demand and assess operational considerations.
• Krispy Kreme, known for its fresh doughnuts, has been able to increase its prices without negatively impacting sales. The company’s “hub and spoke” model efficiently produces and distributes its doughnuts to retail locations, supporting both loose and pre-packaged doughnut sales. While the company’s third-quarter earnings and revenue fell short of expectations, Krispy Kreme’s stock has risen more than 20% this year, with a market capitalization of $2.10 billion.