As we discussed previously in these abstracts, McDonald’s and Krispy Kreme entered into a novel partnership in late 2022, making Krispy Kreme doughnuts available at just a few McDonald’s restaurants in Louisville, Kentucky. The initial experiment was a substantial success, leading to an expansion in March 2023, growing to 160 McDonald’s restaurants, though all of them remain in the same general geographic region.

By November of 2023, the growing experiment continued to reap success, and the companies began talking about how they could make it even more expansive. Notably, Krispy Kreme recognizes that its expanded distribution options have allowed it to sell much more of its delicious products, and at higher prices. People have been appreciating the availability of glazed doughnuts, purchasing them frequently and even paying more than they would at a Krispy Kreme location to obtain them easily from McDonald’s.

For McDonald’s, the collaboration also is proving beneficial in its attempts to build its reputation as a café-like location and a source for good coffee (and compete more effectively with Starbucks or Dunkin). By relying on Krispy Kreme to supply consumers with sweet treats to dunk in their morning Joe, McDonald’s also can reduce its need to produce its own cinnamon rolls or blueberry muffins and thus simplify its operations.

The challenge is making sure that the Original Glazed are (as Krispy Kreme famously promises) hot and fresh in the fast food locations. After initially adopting it in 2021, Krispy Kreme has leaned more heavily into its hub-and-spoke distribution system, in which various production hubs—including both dedicated manufacturing facilities and larger stores that can function as doughnut factories—supply local stores with both individual treats and prepackaged boxes of a dozen doughnuts. Thus far, it has been successful in keeping the 160 regional Kentucky stores constantly supplied with fresh desserts, but whether it can achieve similar success nationwide remains an open question.

Even as it proceeds with this broader distribution strategy in partnership with McDonald’s though, Krispy Kreme has pulled back on another experiment, in which it considered forays into consumer packaged goods. In that effort, it installed packaged mini-crullers and doughnut bites in Walmart stores, designed with sufficient preservatives and packaging that would allow them to sit on grocery store shelves for extended periods.

But the primary appeal and feature that sets Krispy Kreme apart is the freshness of its baked goods. Even if consumers buy a box of a dozen prepackaged doughnuts, the sweet treats were made that same day, such that they still offer the fresh texture and glazed crunch that people associate with the brand. Thus, preservative-filled, packaged grocery store versions held little appeal, prompting the company to shut down that distribution channel.

Still, the promise of distribution through McDonald’s implies a massive expansion for Krispy Kreme and a substantial product line increase for McDonald’s. Thus as the experiment continues to grow, so do your own chances of grabbing a glazed in a nearby drive-thru.

Discussion Questions

1. What is the advantage of a collaboration like this one, compared with McDonald’s simply making and selling its own doughnuts and Krispy Kreme simply selling through its own locations?

Sources: Amelia Lucas, “McDonald’s and Krispy Kreme Are in Talks to Expand Partnership,” CNBC, November 9, 2023; Zoe Strozewski, “Krispy Kreme Is Discontinuing Its Grocery Store Doughnut Line,” Eat This, Not That! March 21, 2023; Tom Ryan, “Does Krispy Kreme Fill a Hole in McDonald’s Menu?” Retail Wire, October 24, 2022