Kyiv's fast food scene today offers a wide variety of exotic options. For a quick bite on the go, you can try Japanese sushi, Chinese noodles, American hamburgers, and Turkish shawarma. However, surprisingly, there are still unfilled niches. The capital is experiencing a distinct shortage of good old doughnuts. This is despite the fact that setting up a doughnut shop costs only $10,000-$20,000, and the profitability of this business exceeds 100%.
Low start
"In Ukraine and Russia, donut production disappeared with the collapse of the USSR, where donuts were baked on an industrial scale," recalls Petr Mazus, executive director of Doni Donik, a Russian donut cafe chain. "Remember, in small bakeries, donuts were sold by the pound and eaten on the street and at home."
Today, the donut market, according to Petr Mazus, is in its infancy. Both fast-food companies and retailers setting up their own production are entering the market. Anyone who's visited Auchan, Real, and other shopping centers has likely witnessed long lines of shoppers taking home bags of freshly baked, filled donuts, sold at a reasonable price of 10-12 rubles each.
As we know, the strength of a donut lies in its aroma, fluffiness, and freshness. This sets it apart from the similarly priced puff pastries sold at every corner in the capital. That's why donut shops that bake in real time are so popular: the aroma of baked goods attracts customers from far away.
Today, donuts with a wide variety of fillings are available—chocolate, cream, caramel, and berry. These pastries can be called not only donuts, but also Berliners, doniks, donuts, and so on. Incidentally, in St. Petersburg, a donut is traditionally called a pyshka.
By weight and individually
When planning to produce donuts, you need to decide where to sell them. This will determine both the operating model and the amount of investment in the startup.
Donuts can be sold on the street, in shopping malls, food courts, or in a stationary donut cafe.
For the street option, the optimal fast food model is a mobile food stand .
These trailers have proven themselves to be highly effective and are used by most major fast food chains. Prices for a kiosk equipped with the necessary equipment range from 12,500 to 25,000 UAH or more. Inside, the kiosks can be equipped with standard donut-making equipment, including a donut machine and other accessories.
A bakery like this can produce quite a lot—depending on the equipment, anywhere from 250 to 600 or more donuts per hour. However, with a good location, sales are guaranteed.
As the saying goes, "the train station and the market eat everything." Cons: You'll have to work closely with all the local regulatory authorities. It's food production, after all.
"An alternative option is to open a location in a large shopping center," says Natalia Ponomareva, director of Foodservice. "However, not all stores agree to host a donut factory under their roof, claiming that donut fryers produce smoke. This problem, however, is easily solved by installing a good exhaust hood. And those stores that agree are not disappointed. It's not for nothing that Americans spray special deodorants in grocery supermarkets to create the fresh smell of bread. It stimulates sales."
"Setting up a turnkey retail pavilion in a store will cost no more than $7,000-$10,000," continues Natalya Ponomareva. "This, of course, is if you purchase domestic equipment in a standard configuration."
Any additional accessories can significantly increase your investment budget. For example, a dispensing machine for a single filling will cost you at least $2,000-$3,000, while some donut shops may offer several types of fillings.
Actually, organizing this business is not very complicated.
According to experts, most companies offer on-call technologists for equipment purchases. The company's technologist will train your employees in the intricacies of baking and the intricacies of operating specific equipment.
The positive side of this business is its high profitability and low labor costs. According to experts interviewed by Business, the profit margin for donut sales is at least 100%. A small shop can be staffed by just two or three people per shift.
To the theater for donuts
"Those who have visited the US or Canada have witnessed a remarkable spectacle—'donut theater,'" says Natalia Ponomareva, director of Foodservice. "In the cozy cafes owned by a major donut manufacturer, one wall is completely transparent, revealing the production facility behind it. It's a captivating spectacle: to admire the dough being kneaded and the donuts being baked, doughnut lovers come from far and wide to sit in the cafe for hours, devouring donut after donut. While Russia doesn't have similar attractions yet, demand for cozy donut cafes has emerged."
"Our main product is doniki," says Petr Mazus, executive director of Doni Donik. "Just don't write that we sell doughnuts. These are specifically doniki; we position them as a signature product, distinct from doughnuts, crumpets, and everything else."
The Doni Donika format is very similar to the model of the well-known Dunkin' Donuts chain, which, for various reasons, ceased operations in Russia (rumor has it that the Russian partner stubbornly insisted that donut shops sell soups and sandwiches, shocking the American partners). Doni Donika's core sales are donikas and coffee, just like the overseas chain. According to Petr Mazus, the Russian founders of this chain drew on Dunkin' Donuts' extensive experience in building their business. This applies not only to the menu but also to management practices.
Our company's strategic goal is to get people accustomed to having a delicious donut for breakfast and a cup of good coffee. There's no "donik" culture in Russia yet, but we're striving to instill it. In the US, for example, donuts are a national obsession.
Doni Donika has one production center, where doniki with dozens of different fillings are baked, and seven retail outlets, including stationary cafes and food courts in shopping centers.
Every morning, fresh baked goods are delivered to the stores and sold there for one day only. By the end of 2007, the company planned to open about 50 cafes, using both its own resources and through franchisees.
According to Mazus, there is already a demand for franchises today, especially among regional entrepreneurs.
"Next year, we'll start selling franchise packages. I can't give you the exact price for the franchise yet, but I'd estimate the investment in creating a food court cafe won't exceed $100,000."
According to the pessimistic scenario, such an establishment would pay for itself within two to three years.
Source: Business Newspaper
