Donut Makers Exploring New Growth Opportunities in the Food Industry

In 2024, the donut category saw a surge in retail activity, which is great news for companies like Krispy Kreme Inc. and Shipley Do-Nuts who are looking forward to building on this momentum in 2025.

Krispy Kreme had an impressive year in retail and distribution. During their fiscal 2024 third-quarter results call on Nov. 7, executives shared that the company’s sales reached $1.23 billion in the first three quarters of the year, a 1.9% increase from the previous year. In the third quarter, Krispy Kreme successfully expanded its delivered-fresh-daily (DFD) business with pilots in Los Angeles and Washington, adding over 150 Target stores and growing its presence in Walmart and Kroger. The company has big plans to be available in more than 15,000 locations in the US, including 12,000 McDonald’s stores, by the end of 2026.

Krispy Kreme’s CEO, Josh Charlesworth, highlighted a reorganization of their management teams to focus on profitable expansion within the US and growing their international presence through a franchise model.

Unfortunately, Krispy Kreme faced a setback in late November when a cyberattack disrupted their operations, including online ordering. The company disclosed in a Securities and Exchange Commission filing that they anticipate this incident will impact their operations and finances until recovery efforts are completed. Despite this challenge, Krispy Kreme remains optimistic and holds cybersecurity insurance to offset some of the related costs.

On the other hand, Shipley Do-Nuts, based in Houston, had a successful year with four new store openings in the fiscal third quarter. The company reported its 15th consecutive quarter of positive same-store sales and increased its development pipeline. Shipley plans to enter new markets in Florida, Tennessee, North Carolina, and Virginia in 2025.

Shipley attributed its growth to product innovation, which resonated well with customers. The company launched unique products like the Poptastic donut with freeze-dried Skittles and the Oreo Cookies & Dream donut, driving engagement and boosting sales. The introduction of the breakfast egg and cheese kolache line in the third quarter was a hit and marked the company’s largest limited-time offering.

Deborah Andrews, VP of foodservice bakery marketing at Rich Products in Buffalo, emphasized that donuts continue to be a popular choice among consumers due to their affordability, convenience, and indulgent appeal. Donuts align with consumer trends focused on snacking, personal treats, and grab-and-go options, offering a satisfying treat at an accessible price point.

Overall, the donut category is thriving, with companies like Krispy Kreme, Shipley Do-Nuts, and Rich Products at the forefront of innovating and expanding in response to consumer preferences.