The global doughnuts market is set to grow at a compound annual growth rate (CAGR) of 5.47% over the next five years, according to a report by Research and Markets.
The report notes that on-the-go food offerings have performed well in the food sector, with baked goods seen as a convenient and ideal product for busy lifestyles.
According to the report, one driver of the doughnut sector is the growing number of stores and retail outlets.
Socialising at cafe’s is a popular pastime for millennials, particularly those in urban areas and cities. This has led to an influx of food services outlets such as doughnut shops, coffee shops and quick service restaurants (QSR).
A prominent challenge facing the market is the fluctuating price of raw materials needed to produce doughnuts such as sugar, eggs, flour, cocoa and milk.
The widening gap between demand and supply has increased the costs of raw materials substantially which has a knock-on effect on the doughnut market segment as it not only increases the manufacturing costs but also reduces the profit margins for vendors.
Key vendors in the doughnut market sector include Dunkin’ Brands Group, Krispy Kreme Doughnuts, and Mister Donut.
In July, Dunkin Donuts announced plans to open between 380 and 450 locations this year whilst Krispy Kreme is also expanding its franchise to several new locations later this year.