IT COSTS A LOT OF MONEY FOR KRISPY KREME TO DELIVER DOUGHNUTS TO
MCDONALD’S LOCATIONS. PHOTO BY JONATHAN MAZE
The fast-food giant has long struggled to effectively sell pastries to go along with its extensive coffee menu, despite repeated attempts. In 2023, for instance, it removed its cinnamon roll, blueberry muffin and apple fritter from the menu. The company has wanted to sell pastries for some time, believing them to be a hole in its breakfast menu. It had hoped the Krispy Kreme partnership would fill that hole—no pun intended—but that’s not what consumers want from McDonald’s. They are going there for breakfast sandwiches. THE DOUGHNUTS ARE NOT AT THEIR BEST Under Krispy Kreme’s current business model, the company makes doughnuts at its shops and then delivers them to kiosks at retailers and other locations, known as DFD doors. It makes sense to improve the economics of those shops and to increase access without a heavy capital investment. But few things are better than a hot glazed Krispy Kreme doughnut. So customers
would be driving to McDonald’s for a product that isn’t quite as good as they could get from the shop itself. Many customers in social comments to me argued that this was a reason this partnership didn’t work. That’s fine in a place like Walmart or Walgreens, but at McDonald’s, customers can get an Egg McMuffin instead that is at its best. MCDONALD’S TRAFFIC HAS BEEN WEAK The fast-food giant hasn’t exactly been rolling in excess customer traffic lately. The Krispy Kreme rollout has coincided with McDonald’s sales and traffic challenges, brought on by consumer price frustration and economic issues. Breakfast has had some of the worst traffic this year. According to Revenue Management Solutions, traffic in the morning was down 8.1% in May at fast- food restaurants. In other words, Krispy Kreme was selling the same doughnuts customers can get in many other places nearby in a restaurant that serves fresher food at a time when there
are fewer customers coming in. That was always difficult. NO MARKETING Krispy Kreme had little choice but to roll out the sale of doughnuts at McDonald’s locations gradually, so it could prepare the logistics and build new locations—as it is doing in Minneapolis. As such, McDonald’s wasn’t really marketing the partnership. Most of its customers couldn’t get the doughnuts. The company could do local marketing. But its real power is in its national marketing capabilities. The lack of marketing meant many customers didn’t know they could get Krispy Kreme doughnuts at their local McDonald’s. But if the company did start marketing too early, many customers would go to their local McDonald’s only to not find doughnuts. One wonders whether the partnership would have been better off as a long-term test in one region while Krispy Kreme developed its locations so it could roll the whole thing out nationwide more quickly.
JULY 2025 RESTAURANT BUSINESS
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