Donut success in all sectors is pushing the creativity of retail donut shops in interesting ways.

KANSAS CITY — When the three most popular bakeries in the United States are donut shops, based on a Travel + Leisure magazine report citing Instagram data, it may be time to officially proclaim the donut as America’s favorite sweet baked good, surpassing the once beloved cupcake.

Instagram recently examined the most-photographed places on its app and delivered an enlightening list of the country’s top 15 bakeries and cafes that appeared on users’ feeds in late 2016, according to Travel + Leisure.

Topping the charts was Café du Monde, the iconic New Orleans cafe where beignets (square French-style donuts) have been served since the original coffee shop opened in 1862.

Ranking second and third, respectively, were Portland, Ore.-based Voodoo Doughnut and California Donuts in Los Angeles.

“Paying attention to trends and what’s happening in the food world is what helps us be in the know,” said Danette Kuoch, manager of California Donuts, which opened 35 years ago as a tiny donut shop but catapulted into fame based on its eye-catching, photo-worthy creations. “We have now become a late night dessert spot in Los Angeles. Our product is unique. We are inventors, not followers.”

It’s quite amazing to point out that her parents fled Cambodia during the Vietnam War and came to Los Angeles as refugees, looking to pursue the American dream.

Decades ago, donuts represented a low-cost business start-up for many Cambodians in Southern California. According to a 2010 article in The Atlantic magazine, Ted Ngoy led the way after immigrating in 1975 and opening a chain of donut shops once he learned the business. Mr. Ngoy reportedly trained a wave of Cambodian immigrants that followed and, by the mid-1990s, 80% of California’s donut shops were Cambodian owned and operated.


California Donuts is one of countless donut shops across America that is finding success.


Fast forward to 2017, and donuts are no longer synonymous with the word bargain. Many shops sell gourmet donuts that are as colorful as they are costly. London’s Dum Dum Donutterie reportedly serves a $1,975 donut topped with Cristal champagne caviar, gold leaf, Tahitian gold vanilla beans and Italian-made Amedei Porcelana chocolate, as reported by The Daily Mail. There are numerous shops in the United States selling gourmet donuts every day for $3 to $4 apiece.

Specialty donuts at California Donuts sell for $2, $2.50 or $3. The specialty menu includes their signature Panda donut made with Oreo pieces, Blueberry Toast Crunch, Strawberry and Nuts, Samoa, and Lucky Charms.

To say that Ms. Kuoch and her creative social media team are savvy is a massive understatement. California Donuts boasts a whopping 463,000 followers on Instagram. They are equally active on Snapchat.

“First of all, having a product that attracts the eyes of others is important to building relationships on Instagram and with Snapchatters,” Ms. Kuoch said, adding a warning about when and when not to post. “If you have great content to post, the more you post, the better. But if you don’t have great content, it’s better not to post at all.”

Macro trends

It’s no wonder that retail donut shops are pushing the envelope on their donut creativity, as they are pushed harder by greater competition for donut sales from the supermarket and convenience-store sectors.

U.S. retail sales of donuts at supermarkets and convenience stores reached $1.97 billion for the 52 weeks ended Nov. 27, 2016, which was up 3.4% from the previous 52 weeks, according to Information Resources, Inc., a Chicago-based market research firm. Over the past four years, supermarket sales of fresh donuts have risen by an average of 5.2% a year.

Acquisitions have two leading donut makers taking different paths. Hostess Brands, Inc., after being acquired by Gores Holdings, Inc., became a publicly traded company. Krispy Kreme Doughnuts, Inc. turned into a private company after JAB Beech, Inc. acquired it.

Krispy Kreme Doughnuts had 1,133 stores worldwide when the first quarter ended May 1, 2016, which compared with 1,003 at the end of the previous year’s first quarter. Krispy Kreme stopped trading on the New York Stock Exchange after JAB Beech, Inc., an indirect controlled subsidiary of JAB Holding Co., completed its acquisition of the company on July 27, 2016. The portfolio for JAB Holding Co. includes coffee companies Keurig Green Mountain and Jacobs Douwe Egberts. The transaction had a total equity value of about $1.35 billion.

“JAB’s experience and industry knowledge make them the ideal partner to help grow the iconic Krispy Kreme brand throughout the world,” said Tony Thompson, chief executive officer of Krispy Kreme, when the deal was first announced May 9, 2016. “We remain focused on our long-term strategy and continuing to offer our premium, high-quality donuts and sweet treats to consumers around the world.”

Krispy Kreme Doughnuts continued to focus on limited-time offerings in 2016, featuring the Zombie donut, the Pumpkin donut and the Spider Web donut in October; and the Melted Snowman donut and the Santa Belly donut in December. Also in December, the company introduced a Nutty Cocoa Ring donut that is dipped in Nutella hazelnut spread, topped with crunchy hazelnut pieces and drizzled with chocolate icing.