USA – Multinational coffeehouse and doughnut chain Krispy Kreme has revealed it will sell its doughnut offerings in 2,000 McDonald’s outlets by the end of the year, an increase from the 1,000 outlet estimates announced in September.
Krispy Kreme is on track to have its doughnuts available at 12,000 McDonald’s locations by 2026, according to President and CEO Josh Charlesworth.
Starting in the week of November 18, the doughnut chain will expand its delivery service to restaurants in Indiana and Ohio.
These states border Louisville, Kentucky, where the partnership was first tested, as well as Chicago, where Krispy Kreme began supplying doughnuts to approximately 400 McDonald’s locations in October.
By the end of November, the company will extend its delivery service to Pennsylvania and West Virginia, bringing Krispy Kreme products to another 1,000 restaurants.
Charlesworth noted that McDonald’s is supporting the launch with a comprehensive local marketing campaign, which includes TV ads, social media, and outdoor billboards.
Despite the rapid expansion, most of Krispy Kreme’s doughnut-making facilities are operating below capacity, with some producing only 25% of their maximum output.
Charlesworth explained that the accelerated rollout provides an opportunity to improve the capital efficiency of these existing production hubs. The company also plans to open new high-volume facilities in underserved markets like Minneapolis and Massachusetts, aiming for quicker paybacks.
Charlesworth further shared that there has been no measurable cannibalization of Krispy Kreme’s sales in the Chicago market, where the company’s existing stores have not been impacted by the new McDonald’s partnership.
However, the rapid expansion of Krispy Kreme’s delivered-fresh-daily network, which refers to the distribution of doughnuts to retailers and restaurants rather than individual consumers, has put pressure on the company’s logistics infrastructure.
As a result, CFO Jeremiah Ashukian revealed that Krispy Kreme is considering using third-party delivery services to manage some of its retail and restaurant deliveries. This strategy would help the company avoid scaling expenses related to fuel and truck maintenance.
After conducting tests with third-party logistics providers, Krispy Kreme has issued a request for proposals from potential delivery partners.
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