Doughnuts Poised for a Sweet Future

The journey of multinational doughnut chains in India so far has been anything but remarkable. This can be deduced both from the number of such chains and the scale of their operations. Compared to the number of burger and pizza chains that have entered the Indian market and the rate at which they are expanding, the numbers of notable doughnut chains are quite few and far between.

From McDonald’s, KFC, Subway, Pizza Hut to Domino’s Pizza, Burger King and Johnny Rockets, the list of burger and pizza chains is already long and growing in India, which is not exactly the case with doughnut chains. And to understand the scale of their operations, take, for example, the case of American chain Dunkin’ Donuts, one of the major players in India’s nascent doughnut domain.

Jubilant FoodWorks Limited, the company which has exclusive rights for developing and operating Dunkin’ Donuts restaurants for India, declared that there were 50 Dunkin’ Donuts restaurants across 12 cities in India as of 26th October 2017. Barely a year and a half earlier, as of 28th May 2016, there were 74 Dunkin’ Donuts restaurants across 24 cities in India. So, far from increasing, the presence of Dunkin’ Donuts restaurants in India is, in fact, going down. The company said some restaurants were closed to cut losses.

The expansion of other doughnut chains in India is also far from aggressive. While Dunkin’ Donuts was expanding at somewhat feverish pace till the first few months of 2016, the Singapore-based Mad over Donuts (MOD), which entered India in 2008 – the first donut brand to enter India – has kept a slow but steady pace in its expansion drive. On an average, it has added just six stores over the years. But it plans to expand into 15 more cities over the next five years, according to a report in ET BrandEquity of The Economic Times.

American chain Krispy Kreme, brought in India by master franchisee Citymax Hotels, the hospitality division of Dubai-based retail giant Landmark Group, is also on an expansion mode. Although it currently has just 25 outlets in India, The Hindu Business Line quoted Citymax President Vishal Kapur as saying that they were planning to have 80-100 outlets in the country, in the next four years. At present, Krispy Kreme stores are located in Bengaluru, Chennai and Mumbai. Krispy Kreme entered India in early 2013, less than a year after Dunkin’ Donuts opened its first outlet in India.

So at a time when Dunkin’ Donuts is reducing the number of its stores in India, its less fierce competitors, who seemed to have been keeping a low profile in their Indian operations all these years, appear to think that the time is now just ripe to expand their reach and reap benefits from their sweet offerings.

Market Potential

However, the fact that Dunkin’ Donuts has cut down on the number of its restaurants should not give the impression that the doughnut market in India is too damp. The company made it clear that closure of its restaurants at some places was a strategic move to cut losses. It does not mean it will not open new restaurants where it sees potential of doing well. There is, of course, no denying the fact that more and more Indian consumers are becoming health-conscious because of the increasing incidences of obesity, diabetes and lifestyle-related ailments in urban India.

But at the same time, the indulgence market is also thriving. And Indians are known for their sweet tooth. The fact that industry pioneer MOD, which entered the Indian market about four years earlier than Dunkin’ Donuts and Krispy Kreme, is now at the cusp of a major expansion drive should speak volume about the market potential of sweet bakery items in India. What is now more than clear is that doughnut is a well-recognised and established bakery segment in India. After all, who can resist the temptation of a hot doughnut that readies itself to melt in the mouth?

The establishment of doughnut as a new bakery category in the country also opens the door to other small-to-medium bakery establishments, along with the big ones, to cash in on the new trend and come up with their own range of doughnuts which can go well with a cup of coffee at breakfast and can also serve as India’s favourite desserts when topped with generous loads of chocolates and jellies.

In the backdrop of the growing snacking and indulgence culture in urban India, and with the growing tendency among a section of upwardly mobile young urban Indians to experiment with new types of food & beverages, one can say that though the market of doughnuts has not grown stupendously in India till date, but it has a good potential to enjoy a sweet growth in the near future. In fact, one can infer that the market for doughnuts in India is now ripe for leaping into the road of impressive growth  

Innovation and Quality

The leading doughnut chains in India offer quite a lot of varieties. They are no longer restricted to their sweet avatars. Krispy Kreme recently introduced their savoury range of doughnuts and Dunkin’ Donuts also wants to introduce India-centric offerings in this category. And these products are not targeted at adults alone.

Dunkin’ Donuts also brought out a range of doughnuts keeping in mind the tastes and preferences of kids. It believes that with evolving lifestyles and parenting methods, the tastes and habits of kids have evolved over time, too. Additionally, with the influx of the mall and weekend outing culture, kids are now more exposed to eating out. Moreover, they also possess the decision making power when it comes to eating out across occasions.

The ‘Designed in India, for India’ DunkyDoos range of donuts from Dunkin’ was an attempt to give parents one great way to connect with their little ones over food in a fun and playful manner. It also addressed a business opportunity of creating additional occasions for purchase – arising out of the growth of this consumer segment.

Doughnuts go well with a cup of coffee, tea, or a glass of shake as well. Naturally, both Krispy Kreme and MOD offer a range of beverages, along with their wide varieties of doughnuts. But Dunkin’ Donuts has gone a step further as it has positioned itself in India as a food cafe, occupying the sweet spot between cafes and quick service restaurants. Known for a signature menu consisting of the popular Death by Chocolate Donut, Alive by Chocolate, Break-up Party Eclair, Big Joy Burger, Naughty Lucy Burger, Too Much Burgers range, Wicked Wraps, Dunkaccinos, Bangalore Startup Coffee and many more, Dunkin’ Donuts said it would continue to innovate in the doughnut space..

But whatever be the innovation, the selling point of doughnuts in India would continue to be their quality. For discerning consumers do know that eating doughnuts would not make them any healthier. And it is only natural that when someone takes the plunge in the ocean of indulgence, they would expect maximum satisfaction out of it.   

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