Krispy Kreme doughnuts to be sold nationwide in the US by McDonald's by the end of 2026

Although it will take around two and a half years to complete, the rollout will begin in the second half of this year as Krispy Kreme more than doubles its distribution to meet the partnership's requirements. For the term of the arrangement, McDonald's will be Krispy Kreme's exclusive fast-food partner in the United States.

The doughnut chain produces and distributes its goods profitably by utilising a "hub and spoke" business model. Freshly cooked doughnuts are shipped daily from production centres, which are either storefronts or doughnut factories, to retail establishments like supermarkets and petrol stations.

The collaboration with McDonald's presents Krispy Kreme with a significant chance to grow. As of December 31, it was delivering its doughnuts to 6,800 independent retailers. McDonald's now operates 13,500 restaurants in the United States, and by 2027, it hopes to add 900 more.

Additionally, Krispy Kreme has been increasing its capacity in order to supply freshly made doughnuts to the approximately 7,500 McDonald's locations that it is now unable to reach.

Usually, the network of Krispy Kreme doughnut restaurants produces more of the delicacy than it can sell. Given the increased demand from McDonald's and other new clients, its manufacturing lines can produce more goods at a lower cost per unit.

About a year and a half ago, McDonald's launched a test run of Krispy Kreme doughnuts at nine locations, sparking the beginning of the two brands' collaboration. A few months later, about 160 eateries in Louisville and Lexington, Kentucky, were part of the experimental programme. During the national rollout, the doughnuts will continue to be sold at those original sites.

Krispy Kreme doughnuts are a welcome boost to McDonald's bakery and breakfast menu. The burger company has been focusing more on coffee, which goes well with doughnuts, while removing other baked goods like cinnamon buns from its menu.

Customers at McDonald's will be able to purchase solo or six-pack packs of the traditional glazed, chocolate-iced, sprinkle-filled doughnuts and cream-filled doughnuts. Doughnuts will be sold all day long at the establishments.

From its previous projection of 75,000 sites, Krispy Kreme has increased its long-term expectations to more than 100,000 points of access for its doughnuts worldwide. There are presently over 14,100 locations selling the chain's doughnuts in 39 countries.

(Sources: cnbc.com)