Two donut leaders in food service are emphasizing their signature menu item in different ways.
Dunkin’ Brands Group, Inc., Canton, Mass., is focusing on simple ingredients along with a simplified menu that prioritizes donuts. Krispy Kreme Doughnuts, Inc., Winston-Salem, N.C., is finding branding partners for its donuts.
Dunkin’ Brands Group, the parent company of Dunkin’ Donuts and Baskin-Robbins, plans to remove synthetic colors across its menu by the end of 2018. The colors include those in donut icings, fillings and toppings.
“This is a significant undertaking on the part of our product development teams and suppliers,” said Nigel Travis, chairman and chief executive officer of Dunkin’ Brands, when the goal was announced last March. “However, we are committed to meet the evolving needs of our customers, including their preference for more nutritional transparency and simpler ingredients, while maintaining the great taste and the fun, vibrant colors expected from Dunkin’ Donuts and Baskin-Robbins products.”
Dunkin’ Brands also in 2017 set a goal to simplify its menu. Coffee and donuts became dominant items under this strategy. David L. Hoffman, president of Dunkin’ Donuts U.S. and Canada, talked about the company’s donut possibilities in a July earnings call.
“This is a category in which we have significant equity as the No. 1 retailer nationally, and given our scale, we have the ability to offer fun and innovative products at a great value as compared to boutique players in the space,” he said. “The recent cake batter donut and current s’mores donuts are great examples of this.”
Dunkin’ Brands’ 100% franchised business model includes more than 12,400 Dunkin’ Donuts restaurants globally.
Krispy Kreme, which has 1,300 retail shops in 31 countries, has been a private company for more than a year. JAB Beech, Inc., an indirect controlled subsidiary of JAB Holding Co., completed its acquisition of Krispy Kreme in July 2016.
Krispy Kreme in 2017 partnered with other brands to offer limited-time-only donuts OMGhirardelli (April) and Reese’s Peanut Butter (August). Mint chocolate donuts and sea salt caramel donuts featured Ghirardelli chocolate. The Reese’s Peanut Butter donut featured Reese’s peanut butter Kreme filling and was dipped in chocolate icing and topped with a chocolate and peanut butter drizzle as well as Reese’s mini peanut butter chips and peanuts.
“In partnering with The Hershey Co., we’re satisfying an intense desire that Krispy Kreme and Reese’s fans never knew they had,” said Jackie Woodward, chief marketing officer of Krispy Kreme.
Smaller food service outlets in which donuts dominate the menu were equally creative.
Cake donuts account for about 70% of sales for the Hurts Donut Co., a 15-store operation based in Springfield, Mo. Cotton candy donuts are a top-seller. Toppings for the company’s donuts include breakfast cereal and Nutella swirled into the shape of an emoji. The Doughnut Project in New York City late in 2017 featured a wine-flavored donut with Fonseca Port’s Bin 27 Port.
On the retail level, Kansas City-based Hostess Brands, Inc. in 2017 launched Hostess Cinnamon Sugar Crunch Donettes, which are topped with a mixture of cinnamon and sugar and a crunchy crumb. Category leader Hostess saw its U.S. retail donut sales shoot up to $365 million in the 52 weeks ended Nov. 5, 2017, a 3.2% increase from the previous 52-week period, according to Information Resources, Inc., a Chicago-based market research firm.
Overall donut sales were up 1.3% to $2,021 million even though U.S. retail donut sales for Grupo Bimbo S.A.B. de C.V. slipped 2.9% to $337 million. Trailing Hostess and Bimbo in U.S. retail donut sales was McKee Foods Corp., Collegedale, Tenn., at $278 million, up 2.9%. U.S. retail sales for JAB Holding Co., owner of the Krispy Kreme brand, increased 5% to $268 million.