With a national deal established with McDonald’s, Krispy Kreme is boosting expectations for how big its distribution network could become.

As a refresher, the doughnut chain uses a hub-and-spoke model in which production centers (hubs) distribute fresh doughnuts daily to several points of access (spokes). Krispy Kreme defines points of access as anywhere fresh doughnuts or cookies (Insomnia Cookies) can be bought: hot light theater shops, fresh shops, carts, food trucks, DFD Doors (i.e. convenience stores, restaurants, gas stations, pharmacies), and cookie stores.

McDonald’s and Krispy Kreme announced in late March that the burger chain will sell fresh doughnuts nationwide, with a phased market launch beginning in the latter part of 2024. The rollout should finish by the end of 2026. Three Krispy Kreme doughnuts will be offered inside locations each day—Original Glazed, Chocolate Iced with Sprinkles, and Chocolate Iced Kreme Filled. Customers can order them individually or in boxes of six all day while supplies last. Customers will be able to buy the sweet treats via in-store, drive-thru, and the mobile app. The expansion comes after McDonald’s tested selling fresh doughnuts in 160 restaurants across Lexington and Louisville, Kentucky.

“We don’t expect it to start till the tail end of the year, but [the McDonald’s rollout] is really thoughtful,” CEO Josh Charles said during Krispy Kreme’s Q1 earnings call. “We’ll obviously naturally prioritize places where we at Krispy Kreme can provide availability faster. But the partnership is going really great so far after what was obviously a great Kentucky test and very thorough test that demonstrated the consumer demand outstripped both theirs and our expectations.”


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The agreement between the two companies lasts one year after the final rollout in 2026. It can be renewed after that.

Krispy Kreme expects U.S. points of access to increase from 7,775 to more than 22,000 by 2026, which includes more than 12,000 McDonald’s restaurants. The addition of 14,000 to 15,000 points of access should result in roughly $340 million to $430 million in incremental revenue and $70 million to $100 million in incremental adjusted EBITDA.

Much of this national rollout can be satisfied using existing capacity, but Krispy Kreme also plans to invest in larger production. Currently, the U.S. has 154 production hubs with spokes, and the goal is to push that to over 200 by the end of 2026. This will be through a combination of adding new hubs with spokes and converting existing hubs without spokes (stores not delivering doughnuts to points of access).

Also, Krispy Kreme wants heavier utilization of its production centers. As of now, the 154 hubs serve about 47 points of access on average. The brand hopes that reaches 100-plus by 2026. The company provided two examples of how this could look. In Philadelphia, there’s 63 points of access served by one production hub. The market earns $7 million in revenue with a 7 percent adjusted EBITDA margin. Krispy Kreme believes that can grow to 300 points of access served by three production hubs. This would boost revenue to $15 million and adjusted EBITDA margin to 14 percent. In Minneapolis, Krispy Kreme has no presence. But in the future, it could reach 400 points of access served by two production hubs. This could result in $16 million in revenue and a 20 percent adjusted EBITDA margin.

Automation could be one way of increasing production efficiency. Krispy Kreme is currently testing a fully robotic line in a Bronx-based facility where doughnuts are being topped, filled, and picked off the line automatically. Additionally, the brand is using digitization to improve yield and reduce waste.

Krispy Kreme is also considering supporting further rollout by partnering with third-party logistics companies. In Washington, D.C., the chain is testing doughnut distribution with Ryder. The company wants to add another city to the test, and it’s also talking to other providers.

“I was just up with the Krispy Kremers and the Ryder team in D.C. myself riding the routes,” Charlesworth said. “And what I could see was that the service level and the quality of the doughnuts is being maintained, which is the primary focus of the test right now—make sure those Krispy Kreme doughnuts show up in the way we would expect and the partnership with Ryder has been great so far.

The doughnut company noted that its relationship with McDonald’s could help growth in other areas, like Walmart, which only lists Krispy Kreme in 25 percent of stores, and Target, which recently signed a deal to expand its partnership. As Krispy Kreme builds its fresh doughnut delivery network, there is no concern around cannibalization or competition from the likes of Dunkin’ or other locations selling their own doughnuts.

“They’re not really doughnut shops. They’re generally beverage-focused, sandwich-focused,” Charlesworth said. “We are the ones who offer a unique, awesome, fresh doughnut experience—Minis for Mom [last week]—constantly bringing excitement and headlines to the category. So, that doesn’t surprise us.”

Following its announcement McDonald’s, Krispy Kreme raised its long-term guidance from 75,000 points of access worldwide to 100,000. For the past three years, global points of access grew by an average of 19 percent per year. The chain ended Q1 with 14,814 points of access worldwide; it hopes to eclipse 33,000 by the end of 2026.

Krispy Kreme’s net revenue increased 5.7 percent to $442.7 million in Q1 year-over-year. Organic revenue grew 6.7 percent to $440.9 million. Adjusted EBITDA rose 5.9 percent to $58.2 million.

Fast Food, Growth, Story, Krispy Kreme