Doughnut revenue increase

Dunkin' DonutsAccording to data from NDP CREST, a New York based market research firm, doughnut sales from quick service restaurants like Dunkin’ Donuts and Krispy Kreme are up for the third straight year after several years of ebbing sales.

More than a year ago, doughnut makers began to notice their breakfast business wane as people became more concerned with healthy eating.

Investors, who at the time shied away from bakers to focus on healthier snack companies, are now putting their money back into doughnuts.

While the rest of the food industry is racing to appear more healthy, with Subway, McDonald’s, Taco Bell and Pizza Hut saying they will eliminate man-made additives in some of their popular food, doughnut makers have found renewed success with more decadent flavours.

Consumers’ relationship with doughnuts has changed, industry observers said, primarily because doughnuts are no longer seen as a breakfast food. Especially in light of the fact that they are cheap.

“This is not a breakfast business,” said Will Slabaugh, MD of financial services firm, Stephens. “This is much more of treat business than a breakfast business.”

Dunkin’ Donuts, which includes Dunkin’ Donuts and Baskin-Robbins, has transitioned its profits away from doughnuts themselves. It makes 57 per cent of its profits off coffee sales and another sizable chunk off breakfast sandwiches.

Krispy Kreme, which makes 88 per cent of its money off doughnuts, this quarter launched a line of three frozen lattes because they help profit margins and ease the company into more regular coffee sales.

You have 7 articles remaining. Unlock 15 free articles a month, it’s free.