John Lindsay, CEO of Baker & Baker, provides his insight into the growth of the doughnut market and what opportunities there are for producers.
By John Lindsay, CEO of Baker & Baker:
Doughnuts are now an established, value-driving category within in-store bakery and food service in all major markets throughout Europe.
However, 2022 has been a challenging year in many respects, with inflation and raw material dominating. So what is it about the humble doughnut that continues to generate consumer appeal? Where is the market heading? And what factors should retailers and bakeries consider for their doughnut offering?
Doughnuts and in-store bakery
The ease of serve combined with the potential to deliver value for the consumer makes doughnuts a clear choice for retailers and food service. Doughnuts are a popular option for consumption on the move, at home or at a range of social occasions.
Whether delivered fresh, or frozen and then thawed in-store, doughnuts are a straightforward product for retailers or food service outlets to execute well. The vast assortment of colours, toppings and flavour combinations creates endless possibilities for operators to develop a standout offering that can entice consumers.
Size of the market
The doughnut category itself is quite broad – when combining ball, ring and mini doughnuts alongside yum yums, the value of the category in the UK is now very similar to fresh bakery cookies as the driving force behind American Sweet Bakery.
There is significant variation in performance and consumer interest across these sub categories. For Baker & Baker, a European based manufacturer of sweet bakery products, the ring doughnut segment is driving much of this growth currently, and its long-term prospects are bright.
In the UK, ring doughnuts are in volume growth whilst the value of the category is up year-on-year, mainly as a result of inflation and price rises. However, although inflation is clearly a factor in the heightened value of the category, it is a less significant factor than in other food categories.
Inflationary pressures
The cost-of-living crisis and inflationary pressures have had a significant impact across all of continental Europe and the UK. Whilst food inflation has hit a record high of 14.7% in the UK1, the situation has been arguably more severe on the continent, with Germany seeing an 18.7% year-on-year rise2.
Such rapid and unprecedented price increases are expected to continue into 2023, although many retailers and manufacturers believe the worst of the inflationary effects are beginning to subside. Inflation, however, has undoubtedly disrupted the category...
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Caitlin Gittins
Editor, International Bakery
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