Krispy Kreme said on Tuesday that it will no longer sell its doughnuts at McDonald’s restaurants after the partnership failed to deliver cost-effective results for the doughnut maker.
“Ultimately, efforts to bring our costs in line with unit demand were unsuccessful, making the partnership unsustainable for us,” Krispy Kreme CEO Josh Charlesworth said in a statement.
The companies said the partnership will end on July 2.
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McDonald’s and Krispy Kreme announced the partnership in March 2024, and intended to sell the doughnuts at all McDonald’s locations in the U.S. by the end of 2026.
“We had strong collaboration with Krispy Kreme and they delivered a great, high-quality product for us, and while the partnership met our expectations for McDonald’s and Owner/Operators, this needed to be a profitable business model for Krispy Kreme as well,” Alyssa Buetikofer, McDonald’s USA’s chief marketing and customer experience officer, said in a statement.
Krispy Kreme paused the planned nationwide rollout in early May, saying it was “reassessing the deployment schedule together with McDonald’s while it works to achieve a profitable business model for all parties.”
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Charlesworth said during an earnings call that demand dropped below expectations after the initial launch, “requiring intervention.”
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| DNUT | KRISPY KREME | 2.60 | -0.02 | -0.76% |
| MCD | MCDONALD’S CORP. | 291.45 | +2.00 | +0.69% |
The doughnut chain said it plans to drive future sustainable growth by making its products available in more places though profitable U.S. expansion via high-volume retail points of distribution and capital-light international franchise growth.
McDonald’s said Krispy Kreme represented a small, non-material part of its breakfast business, which it said is a “core pillar” of its business strategy.
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