Krispy Kreme, Sysco Corp. Team on Distribution

WINSTON-SALEM, N.C. -- Krispy Kreme Doughnuts Inc. is close to signing a supply chain distribution deal with Sysco Corp.

Terms of the agreement call for Sysco subsidiary Sygma to distribute proprietary doughnut mixes, other ingredients and supplies to Krispy Kreme franchise and company locations in the eastern portion of the United States. In addition, Sysco subsidiary IFG will be responsible for export of Krispy Kreme goods to the company's international franchises in 20 foreign countries.

The deal with Sysco is expected to take place in the second and third quarters of 2011. The company had previously outsourced distribution to locations in the western United States in 2008.

"Partnering with Sysco, a world-class logistics company with expertise in the restaurant industry, allows us to benefit from their buying power and the size and reach of their distribution network," said Brad Wall, senior vice president of supply chain and off-premises operations for Krispy Kreme. "By completing the outsourcing of delivery of doughnut mixes, ingredients and supplies, we expect to further simplify our supply chain operations and add capabilities and services for our franchisees."

The company will continue to produce its proprietary doughnut mixes and concentrates at its mix manufacturing facility at Ivy Avenue in Winston-Salem. As part of the proposed transition that facility will supply mix products to Sysco, as well as to the company's west coast distribution partner, for delivery to Krispy Kreme shops, and to contract mix manufacturers domestically and abroad.