Krispy Kreme is getting new products on Walmart’s snack shelves and its online grocery, giving the doughnut brand nationwide retail distribution for the first time just as people have been buying a lot more packaged treats.

Striking a deal with the country’s largest seller of groceries means Krispy Kreme will have additional reach for its brand beyond its own shops, which aren’t as ubiquitous as Walmart stores. Krispy Kreme will be competing directly against the likes of Hostess, Little Debbie and other snack cake brands that have been go-to names on shelves for decades. 

“The most exciting thing to me about this launch is for the first time ever, everybody will be able to access the Krispy Kreme brand,” says Chief Marketing Officer Dave Skena.

Walmart is the exclusive partner for the launch of doughnut bites and mini crullers. Krispy Kreme plans to roll the products into other retailers by 2021. The doughnut bites are similar to the doughnut holes Krispy Kreme sells in its shops though the packaged bites are cake doughnuts, which are easier to distribute than the shops' yeast ones, says Skena.

In some ways, the deal is a return to Krispy Kreme's inception. On July 13, 1937, Vernon Rudolph started to sell doughnuts to grocery stores. People passing by the Winston-Salem, North Carolina building where he made the doughnuts were struck by the scent and wanted to buy them; Rudolph cut a hole in the wall and began selling them directly to customers.

That initial shop led to a chain that now has nearly 1,400 shops in 33 countries. Krispy Kreme also sells its doughnuts in about 12,000 U.S. stores such as convenience stores, mass merchants and supermarkets. The launch with Walmart puts Krispy Kreme into the grocery category in a much larger way, with individually-wrapped snack packs meant as on-the-go snacks, such as a treat a parent might pop into a kid’s lunchbox.

Packing lunchboxes, clearly, has taken a hit due to the coronavirus pandemic. But people are buying more snacks during the coronavirus pandemic. In-store sales of cookies and crackers jumped 21 percent year-over-year to $3.97 billion in the 15 weeks ended June 13, according to Nielsen data, with sales of packaged doughnuts up 19.9 percent to nearly $312 million during that period.

For now, the vast majority of Krispy Kreme’s sales come from its own shops. Krispy Kreme has had “strong sales” at its shops during the pandemic, Skena says. Krispy Kreme doesn’t disclose sales but has been outpacing the industry, he says.

The chain officially launched delivery in late February, timing that proved auspicious as shops soon shut down for dine-in service. E-commerce sales, which include delivery and pickup orders, rose from 2 percent to 4 percent with its Leap Day marketing. E-commerce then soared to about 20 percent of sales soon after COVID-19 hit and later settled in above 10 percent, Skena says. “We’re really glad we got the program running before this happened,” he says.

Krispy Kreme is doing a virtual grand opening for its Walmart deal, playing on the events held when it opens shops. The Zoom event on June 24 is set to include entertainment and music, giveaways of free doughnuts for a year, and an appearance by Krispy Kreme franchisee Shaquille O’Neal. Paid social media and posts on Krispy Kreme’s social channels will be used to promote the products beyond the grand opening event.

Krispy Kreme works with Omnicom Group’s FleishmanHillard on creative and public relations.