WINSTON-SALEM, N.C. (AP) — Krispy Kreme Doughnuts Inc. plans to enter a supply chain distribution deal with Sysco Corp., the nation's biggest food distributor.
The proposed agreement allows Sysco subsidiary Sygma to distribute proprietary doughnut mixes, other ingredients and supplies to Krispy Kreme franchise and company-run shops in the eastern U.S.
Another Sysco subsidiary, IFG, will handle the export of Krispy Kreme goods to the 20 foreign countries where its international franchisees operate.
Krispy Kreme outsourced distribution to its shops in the western U.S. in 2008.
Sysco, based in Houston, is expected to start handling the eastern U.S. distribution and international exports during the second and third quarters.
Last month Sysco reported that its fiscal second-quarter net income fell nearly 4 percent on higher food, fuel and other costs. Food makers, distributors and grocers are all coping with higher costs for food, which they are struggling to pass along to cash-strapped customers.
Shares of Krispy Kreme, based in Winston-Salem, N.C., slipped 4 cents to $6.11 in Wednesday afternoon trading. Sysco's stock fell 16 cents to $27.92.