Paying for premium
Ms. Loveland said Dawn is seeing more consumers willing to pay a premium for higher-end donuts. This doesn’t necessarily mean the production cost will shoot through the roof, however. All it takes to grab consumers’ attention is a little creativity.
Donuts are no longer synonymous with the word bargain. Specialty donuts at California Donuts sell for $2, $2.50 or $3. The specialty menu includes the signature Panda donut made with Oreo pieces, Blueberry Toast Crunch, Strawberry and Nuts, Samoa, and Lucky Charms.
Along those lines, Hurts Donut Co. has grown from one Springfield, Mo., location in late 2015 to locations through six states from Wisconsin to Arizona. The growth is thanks, in large part, to donuts topped with quirky ingredients like breakfast cereal and Nutella.
“Those unique flavor combinations like those used by Hurts and different applications with donuts can satisfy consumer appetite for creativity and flavor,” Ms. Loveland said. “And these types of donuts can command a higher price in the bakery. The success we’ve seen with customers doing this is proof that it is possible in the market.”
Of course, helping retailers deliver with these higher-end donut products calls for some extra attention.
“Planning for high-end concepts shares the same supply chain forecasting tools used in the control of inventory for the preponderance of all s.k.u.s,” Mr. Appling said. “If a unique ingredient is called for, uncertainty in the forecast must be balanced in the forecasting model by adjustment of safety stock buffers.”
Ms. Loveland said the high-end donut trend has been a success for Dawn, which has focused on the support it provides to customers when they are starting up or making changes in operations.
“Our technical baking team has vast knowledge of the equipment, the processes and all the nuance of making great donuts,” she said. “They work hand-in-hand with our customers in their manufacturing facilities, as well as during local store openings. We’re doing a lot of work with research and insight to identify consumer trends that are happening now, and ones that are on the horizon so we continue to provide our customers with the tools and ingredients they need to grow their bakery.”
