McDonald's Have A Answer To Wendy's, Taco Bell, Starbucks

At the end of March, McDonalds began selling Krispy Kreme doughnuts at 160 Kentucky outlets.

Krispy Kreme's strategy is to wholesale doughnuts. Its strategy involves freestanding eateries, but adding thousands more doughnut distribution points will drive expansion.

The doughnut manufacturer lacks the resources to support McDonald's nationwide (or throughout all dayparts).

"With the McDonald's facility in Kentucky test, adding trucks and adding significant -- adding production, increasing production in those existing hubs completely sort of

changes the context of us being a much more of a worker behind the scenes, as well as obviously upfront at the the doughnut counter," Krispy Kreme said during its first-quarter earnings call.

McDonald's has 13,000 US locations. Krispy Kreme can't expand fast enough to service the chain nationwide. The burger restaurant could fund expansion and add Krispy Kreme-branded coffee if it purchased its partner.

Krispy Kreme might help McDonald's defend its morning supremacy against Wendy's and Taco Bell. If it served better coffee all day and doughnuts, it could compete with Starbucks.

If McDonald's bought Krispy Kreme, it could rename portions of the McCafe line and have a more credible snack and coffee push that's higher-end but still relates to its working-class background, unlike Starbucks.

McDonald's hasn't mentioned buying Krispy Kreme, so they may just grow their partnership. However, a transaction would unite the brands and let McDonald's decide which competing channels sell Krispy Kreme doughnuts.

It may seek to increase supermarket sales and Target and Walmart sales but reduce convenience shop sales. McDonald's needs Krispy Kreme to keep its early lead and grow throughout the day, so this partnership makes sense.

Click Below For More Interesting Stories