The Hole Truth

Doughnut chains barely glaze the Dallas market

"Ah, doughnuts," Homer Simpson once said after a huge doughnut saved his life, "is there anything they can't do?"

It's a rhetorical question, actually--one not meant to be answered. Doughnuts make a poor doorstop, substitute hockey puck, or objet d'art. On the other hand, they fit nicely over the spokes of a ship's wheel.

Some 226 doughnut shops operate in the Dallas area, yet our city lags behind the rest of the nation in doughnut-mania. Concord, New Hampshire, for example, supports seven shops in a city of 36,000, or one doughnut shop for every 5,142 people. Allentown, Pennsylvania, provides one shop for every 9,545 of its residents. Each shop in Dallas must feed 12,389 people.

"Mostly, it's the weather," explains Joe Saleh, manager of the Dunkin' Donuts in Arlington. "In the East, it's colder, and they sit around drinking coffee at the doughnut shops." It's not that we're averse to fattening foods or empty calories, of course. The Krispy Kreme in Arlington--the first in the Dallas area--sold 25 million doughnuts over the past two years, and 350 people per day crowd through Saleh's shop. But according to NPD, a Chicago-based marketing-information firm, the South, with 35 percent of the population, consumes only 31 percent of the doughnuts. The Midwest and Northeast lead the way, chomping down on 48 percent of the fried treats, despite housing a smaller (42 percent)--but obviously more gluttonous--portion of the population.

"I think it's a great market," contends John Orrell, owner of the Krispy Kreme franchise in Dallas. "A lot of guys are jealous of us for getting this market." Orrell opened the area's first Krispy Kreme two years ago in Arlington. Last year, he opened a second location in Grapevine. He plans to open 10 to 15 more shops and a distribution center in the next few years. The distribution center will eventually produce 850 dozen doughnuts an hour and will target the local wholesale market--grocery stores, convenience stores, and the like. Doughnut sales at grocery-based bakeries nationwide topped $1 billion in 1999, according to the Food Marketing Institute.

Perhaps the problem is the dearth of national brand-name chains. Only two Krispy Kremes and six Dunkin' Donuts exist in the area. By contrast, Plymouth, Massachusetts, has eight Dunkin' Donuts stores. "In Chicago, we had a Dunkin' Donuts about every mile," observes recent transplant Craig Swenson. When Krispy Kreme arrived in the Dallas market two years ago, it was huge news, causing traffic jams, dogs and cats living together, the whole works. Informal surveying of local residents suggests that the North Carolina-based chain is already the No. 1 doughnut shop in Dallas. "Krispy Kreme is simple, sweet, yet tasty to the bite," says Tim Sheley. Crowds pour in whenever the famous "Hot Doughnuts Now" sign flickers on--sort of a Pavlovian thing. "I've heard people say ours are the best; I've heard people say theirs are the best," says Dunkin' Donuts' Saleh, unable to pinpoint a difference. "We've definitely got a bigger variety, and we both serve hot doughnuts."

Nationwide the two chains sell about 8 million doughnuts per day. That's close to 2 billion empty calories, depending on glaze, filling, sprinkles, and other variables. "Right now, the consensus seems to be settled on Krispy Kreme," says Dana Dombrowski, "but I think it's just the thing to like. I'm partial to Shipley's." Doughnut fanatics can be quite, well, fanatic. "There's Krispy Kreme, Dunkin' Donuts, and Southern Maid," says Jennifer Moody. "The rest can just go away." Krispy Kreme operates 175 stores nationwide and plans aggressive expansion. Dunkin' Donuts, based in Massachusetts, is the world's largest doughnut franchise, with 3,600 stores in the United States alone. It has Fred the Baker. Lesser-known chains include Southern Maid Donuts (14 local shops) and Donut Palace (55 local shops).

Only nine Dallas-area doughnut shops employ the traditional spelling, while 211 opt for the Americanized "donut." Three places hyphenate the word for some odd reason. Still, no matter how you spell it, doughnuts, donuts, and do-nuts are all big business. They rank among the top five breakfast foods prepared at restaurants but eaten off premises, according to rankings by NPD. Krispy Kreme requires potential franchisees prove a net worth of at least $2.5 million or $750,000 per planned store. It demands the financial wherewithal to open at least three stores in the franchise area. Dunkin' Donuts reported an annual sales volume of $2 billion in 1999.

The humble yet profitable product has been around for centuries, but it wasn't until 1920 that an entrepreneur named Adolph Levitt invented an automated doughnut machine--called, unimaginatively, the Wonderful Almost Human Donut Machine. Vernon Rudolph founded Krispy Kreme 17 years later in Winston-Salem, North Carolina. Dunkin' Donuts spun out of William Rosenberg's luncheon service in 1946. It now operates shops in 40 countries.

Still, the greatest moment in doughnut history occurred right here in Richardson. Yep, back in 1978, for reasons unknown, a group of people fried up a doughnut more than 5 feet in diameter.

Mmmm. Doughnuts.

 
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