As donut sales shift increasingly to grocery stores and c-stores, suppliers are working harder than ever to meet the demands of those markets and to keep up with industry trends — among them consumers’ preference for healthier options, and the rise of cake-based donuts.  

Donuts generated $40 billion in revenue in 2016, a figure that is projected to rise to approximately $55 billion by 2024, according to Global Doughnuts Market Outlook 2024, a report by New York-based Goldstein Research. 

Leading the pack in terms of sales is the North American region, which boasts nearly 50% of the world’s gross donut sales, and thus holds the largest market share of any geographical region. Kathy Sargent, marketing director of bakery for Corbion, a global supplier for leading food manufacturers of ingredients that keep foods fresh and safe from the day of production to the day of consumption, says “donuts are becoming increasingly popular as an entire product category.” In the last few years, Corbion has seen a significant growth in its donut-related product sales, which total more than $1 billion for that company alone. 

Some of the key trend and growth drivers identified in the Global Doughnuts report are an increased number of baking shops and outlets; an accelerated habit of snacking across the globe; and changing lifestyles in urban cities moving from home-cooking towards more on-the-go meal options. 

Keith Appling, executive vice president of sales and merchandising for Lawrence Foods Inc., a broadline manufacturer of premium bakery ingredients, confirms that the appeal of donuts to consumers has grown so much that it is no longer considered just a breakfast item. “Our customers are merchandising donuts to capture consumer snack and dessert sales as well, and our sales have been growing with the total category growth.” Lawrence Foods manufactures fillings, glazes and icings that can be used for both cake and yeast donut production. 

Donuts are quickly gaining popularity in supermarkets and convenience stores in particular. Sargent reported that U.S. retail sales of donuts at supermarkets and convenience stores reached $1.97 billion for the 52 weeks ending Nov. 27, 2016, which represents a 3.4% increase from the previous year. Moreover, from 2012 to 2016, supermarket sales of fresh donuts increased by an average of 5.2% each year.  

The Global Doughnuts report indicated that the classic yeast-based donut still dominates sales globally, representing 65% of the total global market share. Corbion offers a variety of tools and resources for yeast-based donuts, including its Ultra Fresh Sweet and Ensemble lines, which bundle leading-edge technology with formulation expertise to deliver convenient, easy-to-use solutions for bakers and bakery manufacturers.

Nonetheless, and despite consumers’ general preference for the Dutch-origin yeast-based donut, that donut is being chased by a multitude of novel American riffs on the classic treat. In particular, the popularity of cake-based donuts—which made their initial appearance in the United States in the 1830s as a result of chemical leavener, a new product at the time—has risen sharply in recent years. Sargent explained that while yeast-raised donuts are typically lighter and fluffier in texture and made from sweet dough fermented with yeast, cake donuts are generally a little crispier and made from sweetened batter that is leavened with baking powder and then extruded in oil to cook.  

Given these changes in preferences and consumers’ constant demand for something new, bakers are now tasked with creating donuts that meet the growing demands for fresh and premium products, as well as an increasing demand for more shelf-stable pantry options and products that last longer between store visits. The demand for creativity and competition for donuts has grown quickly. 

Yeast-raised donuts take longer to produce because of the time required for fermentation and proofing, while cake donuts have a simpler method of preparation with shorter mixing, resting, and batter frying times. With a faster baking process and a longer shelf life, it is not surprising that consumers and suppliers alike are looking to the cake donut as the superior option. 

According to Sargent, yeast-raised donuts are best eaten right away, given their shelf life of 12 hours to a few days.  Cake donuts, by contrast, tend to last a bit longer and are more versatile due to their density. Packaging yeast donuts can increase their shelf lives, but packaging impacts the breakdown of the glaze due to water and mobility issues. To help bakers overcome the hurdles associated with freshness and expiration dates, Corbion’s Ultra Fresh Sweet enzyme solution provides several days of extended freshness for products in the bakery and up to 45 days of extended freshness for packaged donuts. Corbion continually assesses the latest innovations to help bakers provide high-quality donuts that consumers can keep handy in the pantry.  

Similarly, Lawrence Foods performs continuous testing with a variety of donuts and shortenings to ensure the highest quality finished products. Generally speaking, the eating quality of a pre-fried cake donut is superior to that of a pre-fried yeast donut.   The ease of offering a good quality cake donut combined with the longer shelf life makes it an appealing offering for retailer.

Mike Docherty, vice president of marketing for Brill, a CSM Bakery Solutions company, a global leader in bakery ingredients, products and services for retail and food service markets, as well as artisan and industrial bakeries, says that while Brill has not necessarily seen huge growth in cake donuts sales as a whole, “there are retailers who are having great success with their cake donut programs. In these cases, what seems to distinguish these retailers’ donut programs is the assortment of visually appealing and exciting flavors of iced donuts.”

In fact, Docherty says, within the cake donut segment, iced and glazed varieties are strongly outpacing other types of cake varieties, such as plain, sugar, cinnamon or candy topped. Additionally, within the foodservice sector, Brill saw a double-digit increase in menu penetration for cake donuts in 2017, mostly driven by frosted, glazed or iced varieties. “From our experience, having the right icings and glazes to create an eye-catching, indulgent donut offering is critical to realizing success, both on an everyday and seasonal basis,” he says. 

Growing in tandem with consumers’ increasing purchase and consumption of donuts is the growing awareness of the health consequences of the foods they eat. Accordingly, manufacturers and bakers have had to balance consumer preferences for more nutritional transparency and simpler ingredients, while maintaining the great taste and the fun of a dessert. As just one interesting and visible example, business entrepreneurs Ondrea and Marquez Fernandez recently received a $300,000  investment from Barbara Corcoran for their protein-packed donut company, The Dough Bar, on the primetime entrepreneurial investor series Shark Tank. 

Sargent says that Corbion continuously assesses the latest trends to help its customers meet these ever-changing consumer demands to deliver greater transparency, whether that’s through non-GMO, consumer-friendly ingredients and shorter labels or innovative formulations and stabilizers.  To better serve its customers in their efforts to remain compliant with FDA regulations and satisfy consumer demands for more transparency and healthy, products, all of Corbion’s solutions are PHO-free as of December 2017.

Impending FDA regulations requiring the removal of all partially hydrogenated oils from baked goods by June 2018—a deadline that was recently updated to January 2020—was the primary motivator behind Corbion’s development of SweetProTM and Ensemble emulsifier solutions. These product lines allow bakers to eliminate partially hydrogenated oils while safeguarding the quality, taste, texture, appearance, and crumb structure of products. Corbion works side by side with its customers to better understand and address their application needs. Driven primarily by the increasing demand for cleaner labels and simplified ingredients, Corbion has expanded its Pristine clean-label portfolio to include cake mixes, bases, and icing stabilizers. While these solutions are not specifically designed for donut applications, they allow bakery manufacturers to reduce keystrokes in ingredient labels by up to 42 percent without compromising quality, taste or texture.

Appling says Lawrence Foods also has had to keep up with the increased demand for healthy donut options.  Lawrence Foods works with its customers to ensure that they are meeting the demographic trends within their marketplace. “We do have customers that use our Wholesome line of products that have a simpler ingredient list,” he says.  Appling was quick to point out that there is no “one size fits all” approach to the category, though, and that Lawrence Foods’ customers know their shopper base best.  Appling also pointed out that Lawrence Foods products are trans-fat-free in order to comply with FDA requirements, relying on frying shortening to meet government requirements for the end product.