Does Krispy Kreme fill a hole in McDonald’s menu?
McDonald’s is beginning a small test of the sale for a limited time of select Krispy Kreme doughnuts at nine restaurants in Louisville and the surrounding area.
Starting Oct. 26, the locations will sell original glazed, chocolate iced with sprinkles and the raspberry-filled doughnuts. Customers can order them individually or in packs of six.
The product will be delivered fresh daily to McDonald’s and will be available all day while supplies last. Revenue sharing details weren’t disclosed.
“McDonald’s is always looking for ways to give our fans more of what they crave, and we often conduct tests to inform future menu decisions,” said McDonald’s in a statement. “This small-scale test will help us understand how offering new bakery items like Krispy Kreme could impact operations in our restaurants.”
McDonald’s added, “So go ahead, Louisville — it’s time to try a Krispy Kreme doughnut with your fav McCafé coffee order. We can’t think of a better way to start your morning… or afternoon… or evening…”
The test follows Krispy Kreme’s move in 2021 to shift its distribution strategy to a “Hub-and-Spoke” model, delivering fresh doughnuts daily to wholesale accounts (i.e., grocery, c-stores) and selling them for the same price at its stores. Previously, its wholesale focus was on a limited amount of older products at a discount.
Krispy Kreme is seeing a 300 to 400 basis point margin benefit in U.S. cities fully implementing the change. Supported by 411 production hubs globally, the company finished 2021 with 10,427 points of access, up 25 percent year-over-year, with a goal to reach 50,000 in coming years.
“We know that fresh matters,” Krispy Kreme CEO Michael Tattersfield told analysts in May. “As our customers tell us, this is the most important attribute when purchasing a sweet treat.”
For McDonald’s, potential benefits include offering a new category “without adding operational complexities” that should drive traffic, particularly for the most-profitable daytime, breakfast, according to Alicia Kelso, at National Restaurant News.
Ms. Kelso likened the collaboration to co-branding efforts such as Red Robin’s use of their kitchens to distribute Donatos pizza. She wrote, “Such a strategy increases efficiencies in a time when higher costs mandate as much.”
- McDonald’s USA Serving Krispy Kreme Doughnuts at Nine Louisville Area Restaurants During Limited-Time Test – McDonald’s
- Here’s why the McDonald’s and Krispy Kreme collaboration makes sense – Nation’s Restaurant News
- McDonald’s teams up with Krispy Kreme for test doughnut run – Today
- Some McDonald’s will start selling Krispy Kreme doughnuts. Here’s where you can get one. – USA Today
- Krispy Kreme, Inc. (DNUT) Q1 2022 Earnings Call Transcript – The Motley Fool
- Krispy Kreme Charges Toward 50,000 Points of Access – QSR Magazine
DISCUSSION QUESTIONS: Does the collaboration between Krispy Kreme and McDonald’s make sense for both companies? What should define success for Krispy Kreme and McDonald’s?