Duck Donuts features a made-to-order system that allows customers to choose their own cake donut toppings and icings.
To track the phenomenal growth rate of cake donut sales in America, one must go back in time to the humble beginnings of this eye-catching trend in 2013. Let’s start with two examples. Four years ago, Duck Donuts opened its first franchise store in Williamsburg, Virginia, and Hurts Donut Co. opened its first store in Springfield, Missouri. It’s important to point out that Duck Donuts sells cake donuts exclusively and Hurts Donut focuses primarily on cake donuts, which account for roughly 70 percent of sales.

Since that time, Duck Donuts has grown to more than 50 locations, with another 130 under contract, in 22 states. Hurts Donut, now a $23 million company, is up to 15 stores, with nine pending, in nine states. Based on these examples, among numerous others, it is fair to say that cake donuts rank among the hottest selling sweet goods at retail bakeries in America.

“Today’s reality is much bigger than our original dream. We work nonstop tirelessly seven days a week,” says Tim Clegg, who founded Hurts Donut with his wife, Kas, the donut lover of the family. And, oh by the way, the Cleggs have four young children (the oldest is 11, the youngest 3).  “We’ve got our hands full. There’s no sitting still in our lives.”

Meanwhile, Russ DiGilio, founder of Duck Donuts, transformed a simple wish to enjoy a fresh, warm donut while on vacation with his family into one of the most successful donut franchises in the country. Everything is made to order, and customers get to choose their favorite icing, topping and drizzle. It’s like Pie Five Pizza for donuts.

“Customers like having the opportunity to customize, and Duck Donuts is able to provide customers with a product that exactly meets their sweet desires,” DiGilio says.

Further, because Duck Donuts makes only cake donuts, there’s no time-consuming process involved in letting the dough rise — like with yeast-raised donuts. The proprietary donut mix comes ready to use at store level, and batter is dropped one ring at a time into a Donut Robot Mark V from Belshaw Adamatic.

The all-electric donut machine has the capacity to make 56 dozen standard-size donuts per hour, according to Belshaw Adamatic. “We can make fresh donuts in just a few minutes,” says Lou DeFratti, general manager at Duck Donuts in Kissimmee, Florida, the company’s first franchise store in Florida. “This machine is very efficient.”

Duck Donuts relies on the Donut Robot Mark V from Belshaw Adamatic to make its cake donuts fresh and made to order.
“I wish I’d have thought of that,” says one veteran bakery owner, when asked to comment on why cake donut sales are soaring.

Initially, Tim Clegg at Hurts Donut tried any crazy topping — potato chips, Cheetos, all types of sugar cereals — they could imagine. “At first, it didn’t matter what we put on a donut. It sold. Now we’ve got it down to much more of a science.”

On the equipment front, Hurts Donut now uses fryers from Belshaw Adamatic at all stores. "We opened our original store with just one fryer and a makeup table. Fifteen stores later, we use all Belshaw Adamatic equipment. We really like it."

And instead of heading off to the grocery store to get inspiration for new wild donut toppings, Hurts Donut stores order 20-pound boxes of candy from their distributor. Clegg gives a lot of credit to Dawn Foods for helping them transition to a profitable business model with a solid handle on food costs and operational efficiency.

“Dawn helped us with training and product sourcing,” he says. “They are an outstanding company to work with. It’s a great partnership.”    

Launching a new brand

More than a decade ago, while vacationing to the Outer Banks in Duck, North Carolina, DiGilio and his family realized there was nowhere to get the sweet staple of happiness: a warm, fresh donut. What started as a whim developed into fun recipe sessions, many months of research and collaboration, and eventually led to the opening of the first Duck Donuts locations in Duck and Kitty Hawk, North Carolina.

DiGilio actually had no prior experience in the food industry. He had worked in healthcare for 30 years, which led to owning and operating independent and assisted living facilities. As a business owner, he developed the mindset that, to be successful, you have to consistently deliver on your promise, a core value he continues to encourage today.

“It took about three years for the concept to really take off in the Outer Banks. Word-of-mouth played a big role in the success, and still does to this day,” DiGilio says. Once the concept took off, the company founder knew they were on to something special. "Duck Donuts sells more than just donuts; they offer an experience, an opportunity to elicit family memories, traditions and happiness," he adds.

 The freshness factor plays a significant role in the success of Duck Donuts. “We were constantly approached by customers asking us to franchise and bring the brand back to their hometown,” DiGilio says. “After many years of shying away from the idea of franchising, we decided to give it a try, and in 2013, we opened our first franchise in Williamsburg, Virginia. And today we have more than 50 operating locations, and more than another 130 locations under contract in 22 states."