Doughnut Sales Still Digging Holes

AMY SUNG

Doughnut sales are on the decline, while category share has increased just recently in the past year.

Sales seemed to have rebounded after the low-carb craze, and the category grew until 2006. Last year, though, sales decreased by 2.5% over 2006, according to Jonna Parker, senior account manager at Perishables Group.

“However,” she noted, “doughnuts were still the largest category in breakfast bakery, with more than a third of sales.

“All other breakfast bakery categories increased sales in 2007, making doughnuts' losses seem more apparent to retailers. Most recently, in the latest four weeks ending March 29, doughnut sales were still down year-on-year about 1%. So, we have not seen a rebound on the national trend.”

While doughnuts remain a popular item at in-store bakeries, after inflation, 2006 sales of $1.29 million represented a drop of 0.5% over the prior year, according to Mintel's “In-store Bakeries” report in July 2007.

Because of consumer concern over trans fats and the growing interest in whole grains, some suppliers are attempting to reinvigorate sales by approaching the category from a new, healthier angle, Mintel's report noted. In fact, Krispy Kreme launched a Whole Wheat Glazed doughnut that has only 180 calories and is made with 100% whole wheat.

Alan Hiebert, researcher at the International Dairy-Deli-Bakery Association, Madison, Wis., agreed that this is a possible window of opportunity for the doughnut category.

“I wouldn't be surprised to see more whole grain doughnut options introduced,” Hiebert said.

“In my opinion, a doughnut high in whole grains will be similar in taste to a white-flour-based doughnut. If people want to eat doughnuts, they may be attracted to one that can help them get their whole grains.”

The lack of healthy options contributes to the doughnut category's deficiency in growth, according to Parker.

“We are not seeing a growth trend in doughnuts as we find, in limited fashion, in other bakery categories,” he said.

“This is likely caused because it is difficult to produce a doughnut with a [good-tasting] eating experience that is also healthy. Trans fats are needed to make glaze stick, for example. In the end, many consumers want health, but also don't want to trade off for quality.”