Donut innovation gains momentum1/14/2015 - by Jeff Gelski
The donut category in 2014 saw the resurgence of Hostess at retail and the emergence of croissant donuts in food service. Future years may bring a different reason for reformulation. The industry continues to wait to see when, or if, the Food and Drug Administration will act to ban partially hydrogenated vegetable oils.
Apollo Global Management L.L.C. and C. Dean Metropoulos & Co. acquired the Hostess brands in 2013 and formed Hostess Brands, L.L.C., Kansas City. The successful return of Hostess brand donuts was evident in recent U.S. retail sales. Hostess in the donut category rang up sales of $243,255,616 for the 52 weeks ended Nov. 30, 2014, according to Information Resources, Inc., a Chicago-based market research firm.
In October Hostess Brands revealed plans to focus on convenience stores as it rolled out single-serve breakfast items, including a 3.7-oz donut item available in Glazed Donettes.
Hostess in U.S. retail donut sales trailed category leader Bimbo Bakeries USA, Inc. and also McKee Foods Corp. Bimbo Bakeries, Horsham, Pa., suffered a sales decline of 3% over the 52-week period to $355,675,616.
Sales increased 13% to $270,195,264, for McKee Foods Corp., Collegedale, Tenn. The company’s Little Debbie brand led all donut brands with sales of $269,508,992 for the 52-week period ended Nov. 30, 2014. The overall donut category saw sales increase 10% to $1,802,441,984.
Donut innovation in food service in 2014 came through a 2013 invention. Dominique Ansel, a chef, introduced the Cronut, a croissant-donut hybrid. The Cronut brand and product became a registered trademark of Dominique Ansel Bakery, based in New York City.
On Nov. 3, 2014, Dunkin’ Donuts introduced a Croissant Donut that features a flaky croissant ring that is glazed like a donut. The item has 24 layers of buttery dough and distinctive glaze used on the chain’s glazed donuts. It is crisp on the outside and soft and flaky on the inside, according to Dunkin’ Donuts.
In mid-December Dunkin’ Donuts said it had sold more than 4.6 million Croissant Donuts and planned to extend the item’s availability into 2015.
Krispy Kreme Doughnuts, Inc., Winston-Salem, N.C., had donut innovation success through limited-time offerings in 2014. The chain had such L.T.O. donut varieties as Caramel Coffee Kreme, key lime pie, birthday cake batter dough, carrot cake and pumpkin cheesecake.
In September, Krispy Kreme announced plans to launch Ghostbusters and Stay Puft Marshmallow Doughnuts from Sept. 29 to Oct. 31. The Ghostbusters donut featured a marshmallow Kreme-filled shell topped with white icing, a green “splat” inspired by the “Slimer” and a Ghostbusters logo sugar piece. The Stay Puft Marshmallow donut featured a marshmallow Kreme-filled shell topped with white icing, decorated with the Stay Puft Marshmallow Man’s face and a sugar piece hat.
“The traction we gained from this out-of-the-box partnership is an example of the creativity we strive for with all of our limited-time offerings,” said Tony Thompson, president and chief executive officer of Krispy Kreme, in a Dec. 19 earnings call.
Donut makers soon may need to get creative by formulating products without partially hydrogenated vegetable oil. In the Nov. 8, 2013, Federal Register, the F.D.A. tentatively determined that partially hydrogenated oils, a primary source of industrially produced trans fat, are not Generally Recognized As Safe. If the proposed rule is finalized, food manufacturers no longer would be permitted to sell partially hydrogenated oils, either directly or as ingredients in another food product, without prior F.D.A. approval.
Palm oil is one option for donut makers wishing to keep the same taste and texture in product without using partially hydrogenated oils. Palm oil was a sustainability issue in 2014. Through June 2014, more than 11.1 million tonnes of certified sustainable palm oil accounted for 18% of global palm oil, according to the Roundtable on Sustainable Palm Oil, which seeks to promote the growth and use of sustainable palm oil products through global standards and stakeholder engagement.
Dunkin’ Brands Group, Inc., Canton, Mass., on Sept. 16, 2014, announced a commitment to source only 100% sustainable palm oil in the United States by 2016. The company plans to work with its suppliers and franchise-owned purchasing cooperative to source palm oil 100% traceable to the mill by the end of 2015 and to the plantation by the end of 2016.