Krispy Kreme to Sign Distribution Agreement with Sysco Corporation

By: Krispy Kreme | 3 Shares 108 Reads

WINSTON-SALEM, N.C., March 23, 2011 // PRNewswire // -- Krispy Kreme Doughnuts, Inc. (NYSE: KKD) today announced that it plans to enter into a supply chain distribution agreement with Sysco Corporation, a global leader in marketing and distributing a wide range of food and related products to the foodservice and food-away-from-home industry.

Under the proposed agreement, Sygma, a Sysco subsidiary, will distribute proprietary doughnut mixes, other ingredients and supplies to Krispy Kreme franchise and Company shops in the eastern United States. Sysco subsidiary IFG will be responsible for export of Krispy Kreme goods to the 20 foreign countries in which the Company's international franchisees operate. The proposed agreement is not expected to have a material effect on the Company's consolidated revenues or balance sheet.

Krispy Kreme outsourced distribution to shops in the western United States in 2008. The anticipated transition to Sysco in the eastern U.S. and internationally is expected to take place in the second and third quarters of calendar year 2011. Upon completion of the transition, the Company will have outsourced all of its domestic and international distribution operations.

"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, NC. 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.

About Sysco

Sysco is the global leader in selling, marketing and distributing food products to restaurants, healthcare and educational facilities, lodging establishments and other customers who prepare meals away from home. Its family of products also includes equipment and supplies for the foodservice and hospitality industries. The company operates 180 distribution facilities serving approximately 400,000 customers. Sysco's worldwide sales for its fiscal year ended July 3, 2010 were $37 billion. For more information about Sysco, visit their home page at www.sysco.com.

About Krispy Kreme

Krispy Kreme is an international retailer and wholesaler of premium-quality sweet treats, including its signature Original Glazed® doughnut. Headquartered in Winston-Salem, N.C., the company has offered the highest-quality doughnuts and great-tasting coffee since it was founded in 1937. Krispy Kreme is proud of its Fundraising program, which for decades has helped non-profit organizations raise millions of dollars in needed funds. Today, Krispy Kreme can be found in more than 640 locations around the world. Krispy Kreme Doughnuts, Inc. Visit us at www.KrispyKreme.com.

SOURCE Krispy Kreme Doughnuts, Inc.

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