Recession proof donuts?

Donuts, perhaps chief among comfort foods, have proven to be resilient in difficult economic times.

“A lot of quick service restaurants are experiencing downturns in sales given the economy, but donuts seem recession proof,” says Anthony Bonelli, C.E.O. of LaMar's Donuts, headquartered in Lincoln, Neb. “Our numbers are up, the last figures I saw said 11 percent.”

He thinks donuts afford customers an escape from their economic woes. While people may be sacrificing new cars, vacations and other big-ticket items, they aren't going to deny themselves the comparatively small expense of coffee and a donut.

Dunkin' Donuts International, Canton, Mass., continues with an aggressive national growth strategy which includes expanding in existing markets and moving into new markets. St. Louis was the most recent expansion area. More than 100 new locations are projected for St. Louis and the surrounding counties alone.

The embattled Krispy Kreme Doughnuts Inc., Wintson Salem, N.C., though, continues to fluctuate in numbers of store locations. The company added 124 new locations in the past year, rebounding from an 81-store reduction the previous year, but that number is largely a reflection of growth overseas. Financial woes and decreasing sales continue to be a problem locally, and after posting a third quarter loss, the company expects to close a “significant” number of its American stores.

Tinkering with portions

Armed with an understanding of several current consumer trends, foodservice bakery chains are taking aim at certain consumer segments, tailoring product lines to lure them.

The miniature dessert trend is still picking up momentum. A recent survey of 1,600 foodservice professionals in the American Culinary Federation pegged the phenomenon as one of the top three menu trends for 2009. Miniature desserts' great strength is their simultaneous appeal to both senses of healthfulness and decadence.

Desserts aren't the only bakery products now subject to downsizing in bakery chains. Portion control is a cornerstone of healthful diets, and Au Bon Pain is making it easy for customers to practice restraint with its new Portions Menu. Items on the Portions Menu include a chickpea and tomato salad, humus and cucumber, a green bean and almond salad and mozzarella and tomato.

“The idea with the portions menu is that everything is 200 calories or less,” Frechette says. “People love them, they share them like tapas. They are popular little snacks that people like because they are uniform in calorie count.”

Heading home

Consumers are scaling back on going out to eat, hurting the restaurant industry overall. But that doesn't mean those consumers can't be reached.

“People are tending to eat at home more,” Gumpel says. “But it isn't hurting our transaction rate. People just buy things that they can take home with them.”

Gumpel sees an increase in sales at Panera for loaves of bread, coffee cakes and other items that can be enjoyed by entire families at home instead of individuals on the run.

Breadsmith, which focuses almost solely on bread, is acting on the trend.

“We are trying to get dinner recipes that call for our products into the hands of all of our customers,” Schuk says. “That way, we can incorporate ourselves into our customers' home meals. We do a monthly calendar to let customers know what breads will be featured when, and every calendar has a recipe on the back.”

Different times, different customers

More chains among the Top 50 see opportunity in non-traditional dayparts. Breakfast was the main target for major foodservice bakery chains this year, with numerous breakfast sandwich innovations designed to offer upscale breakfast products on the go. One of the unforeseen benefits of the expansion into new dayparts has been the addition of a new type of customer.

Quick casual chain consumer markets had, in the past, skewed heavily to females. The breakfast sandwich lured a male contingent that wasn't present before.

“Part of it is that the women have dragged the men in their life into these restaurants, and they liked it. Part of it was the addition of a hearty breakfast,” Gumpel says. “Now, we see tool belt-wearing men stopping by for a sandwich in the morning. It's making us rethink the menu.”

The success of breakfast among quick casual chains has them continuing to pour resources into the daypart.

“We are seeing more transactions during breakfast, so we are working on more innovations in breakfast sandwiches and innovations in coffee,” Frechette says. Au Bon Pain is experimenting with egg wraps to add dimensions to its existing breakfast.

Panera will be looking to tap into the forgotten afternoon daypart in the coming year. A menu featuring cookies and brownies will aim to draw those seeking an afternoon pick-me-up.