McDonald’s® USA and Krispy Kreme® Announce Expanded National Partnership
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Insights
The strategic partnership between McDonald's and Krispy Kreme to offer fresh doughnuts at McDonald's locations is a notable development with potential implications for both companies' market share and brand positioning. By integrating Krispy Kreme's offerings into McDonald's extensive network, we're likely to see an uptick in foot traffic and average order value, as doughnuts may encourage add-on purchases to existing orders.
From a market expansion perspective, Krispy Kreme's decision to leverage McDonald's nationwide presence could significantly increase its market penetration, effectively doubling its points of access. This move aligns with the trend of strategic partnerships in the food industry aimed at expanding consumer reach without the capital expenditure of opening new locations.
However, there are operational challenges to consider, such as ensuring the consistency and quality of Krispy Kreme products across various McDonald's outlets. The logistics of daily fresh deliveries and maintaining product quality throughout the day will be critical for customer satisfaction and the success of the partnership.
From a financial standpoint, this collaboration could serve as a growth catalyst for both McDonald's and Krispy Kreme. For McDonald's, it's an opportunity to diversify its breakfast and snack offerings without significant R&D investment. The incremental revenue from doughnut sales and the potential to attract new customers could positively impact same-store sales growth—a key metric for investors.
Krispy Kreme stands to benefit from increased sales volumes and improved economies of scale. The partnership could enhance its operating leverage by optimizing production utilization and distribution efficiency. It's essential to monitor how this strategy affects Krispy Kreme's margins, given the costs associated with scaling up operations and the potential need for price adjustments to fit McDonald's value perception.
Investors should track the rollout's progress and customer reception, as these will be leading indicators of the partnership's financial success. The phased approach allows for adjustments and optimization before a full-scale launch, which is a prudent strategy to mitigate risk.
Examining consumer behavior, the collaboration taps into the 'convenience' and 'indulgence' trends that are prevalent in today's fast-paced lifestyle. By offering a popular treat like Krispy Kreme doughnuts, McDonald's could see an increase in visits not only during traditional breakfast hours but throughout the day, capitalizing on the 'snacking' culture.
The initial consumer excitement and demand noted during the test phase in Kentucky suggests a positive market response. However, it's important to consider the long-term consumer engagement—whether the novelty will wear off or if doughnuts will become a staple in the McDonald's menu lineup.
Additionally, the health-conscious segment of consumers might view this partnership with skepticism. It will be interesting to observe how both brands manage this perception and if they introduce any healthier options or portion sizes to appeal to a broader audience.
Krispy Kreme to provide fresh doughnuts daily at McDonald’s restaurants nationwide; Phased rollout will begin in 2H 2024 with nationwide availability expected by the end of 2026
Krispy Kreme to provide fresh doughnuts daily at McDonald’s restaurants nationwide; Phased rollout will begin in 2H 2024 with nationwide availability expected by the end of 2026. (Photo: Business Wire)
The Golden Arches and Krispy Kreme, one of the most beloved sweet treat brands in the world, are teaming up for a national expansion. Fans will begin spotting Krispy Kreme doughnuts in their local McDonald’s restaurants later this year as part of a phased market rollout across the country. Nationwide availability at participating restaurants is expected by the end of 2026.
Three of Krispy Kreme’s most popular doughnuts will be delivered fresh to McDonald’s restaurants every day. They’ll be available individually, or in boxes of six, starting at breakfast and lasting throughout the day – while supplies last:
- The iconic Original Glazed® Doughnut: A melt-in-your-mouth doughnut covered in Krispy Kreme’s signature glaze. The doughnut that started it all.
- The Chocolate Iced with Sprinkles Doughnut: A chocolatey twist on the original, dipped in chocolate icing and covered in rainbow sprinkles.
- The Chocolate Iced Kreme™ Filled Doughnut: Made with a light, fluffy dough and filled with a smooth Kreme™ filling then dipped in chocolate icing.
This follows a successful test at 160 McDonald’s restaurants in the
“Since the launch of breakfast nearly 50 years ago, we’ve continued to offer new menu items, flavors and experiences that have made McDonald’s an irreplaceable part of fans’ morning routines,” said Tariq Hassan, McDonald’s USA’s Chief Marketing and Customer Experience Officer. “This partnership is an exciting next step in that journey and a chance to unlock new business opportunities in the breakfast category and throughout the day. Our fans’ love for Krispy Kreme runs deep, and we can’t wait to make it even easier for them to satisfy their sweet tooth at McDonald’s restaurants across the country.”
“The top request we receive from consumers, every day, is, ‘please bring Krispy Kreme to my town.’ Partnering with McDonald’s on a national scale will provide our fans and doughnut lovers unprecedented daily access to fresh doughnuts and the joy that is Krispy Kreme,” said Krispy Kreme President and CEO Josh Charlesworth.
To celebrate this sweet partnership, Krispy Kreme will give one FREE Original Glazed® Doughnut to all guests who visit
Krispy Kreme More Than Doubles Points of Access
“Significantly, by making Kreme Krispy accessible to fans nationwide through this partnership, we expect to more than double our points of access by the end of 2026. The partnership accelerates the development of our existing Delivered Fresh Daily channel, creating operating leverage through distribution density and production utilization,” said Charlesworth.
Krispy Kreme has been scaling its supply chain, building a support team, adding technology and new equipment, and enhancing field training to support its Delivered Fresh Daily expansion, which includes this phased rollout.
Krispy Kreme and McDonald’s will provide more details regarding the nationwide rollout in the coming months. So, get ready to sweeten up your day as these delicious treats make their way to your local McDonald’s restaurant soon!
About McDonald’s
McDonald’s
About Krispy Kreme
Headquartered in
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. The words “expect,” “plan,” or similar words, or the negative of these words, identify forward-looking statements. Such forward-looking statements are based on certain assumptions and estimates that we consider reasonable but are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial conditions, business, prospects, growth strategy and liquidity. Accordingly, there are, or will be, important factors that could cause our actual results to differ materially from those indicated in these statements. The inclusion of this forward-looking information should not be regarded as a representation by us that the future plans, estimates or expectations contemplated by us will be achieved. Our actual results could differ materially from the forward-looking statements included herein. Factors that could cause actual results to differ from those expressed in forward-looking statements include, without limitation, the risks and uncertainties described under the headings “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in our Annual Report on Form 10-K for the year ended January 1, 2023, filed by us with the Securities and Exchange Commission (“SEC”) and described in the other filings we make from time to time with the SEC. We believe that these factors include, but are not limited to, the impact of pandemics, changes in consumer preferences, the impact of inflation, and our ability to execute on our omni-channel business strategy. These forward-looking statements are made only as of the date of this document, and we do not undertake any obligation, other than as may be required by applicable law, to update or revise any forward-looking or cautionary statement to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, or changes in future operating results over time or otherwise.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240326675550/en/
Krispy Kreme Contact: Liv Weller, Liv.Weller@fleishman.com
McDonald’s Contact: Brittany Kelly, Brittany.kelly@us.mcd.com
Source: Krispy Kreme and McDonald’s
FAQ
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