We need to talk. About donut shops.

Have you ever noticed that there are a lot of doughnut shops around?

Me too.

If you’re like me , you spend ample time and energy each day pondering things that have no logical connection to personal or societal improvement. You also get off on devouring thick, sweet, saturated rings of dough, glistening with congealed icing and baptized liberally with sprinkles. Especially after drinking.

So obviously the mystery of doughnut (or, interchangeably, donut) shops would have crossed your over-nourished mind.

Let’s get down to business then, shall we? I’ll be blunt: how the fuck do doughnut shops stay in business, let alone turn a profit?

I’m not talking about mega-franchises like Dunkin Donuts which have well established brand power. I mean the mom and pop joints in downwardly mobile parts of town.

As I suspected, I am far from the first to be confounded by the sight of these ubiquitous “businesses”. From the pool of my research I have chosen to cite this next passage as the unifying premise of this post, because I simply cannot say it any better:

“Dude, have you ever noticed that there are, like, a ton of doughnut stores everywhere? With so many around, and the fact that a doughnut costs around 65 cents, how do they stay in business? Many of the doughnut stores where I live are open 24 hours a day and only sell coffee, doughnuts and a few other pastries. No breakfast sandwiches or anything halfway fancy. I just don’t get it man, just doesn’t add up.”

Well said my young rapscallion.

The first approach I took on my voyage of deep-fried discovery was to look at the doughnut profit margin after accounting for the cost of the ingredients. Indeed, doughnuts have a low direct cost and as it turns out, have a profit margin of nearly 700%. Holy Shit. That has to be one of the highest markups for a food item out there. But even so, at 65 cents a pop, is a 1500% markup even saying much?

Of course there are other startup costs to consider: $5000-$20,000 for doughnut making equipment, which would include dough sheeters, mixers, glazers, cutters, display cases and a deep fryer on the equine-scale.  Not to mention the requisite plastic menu board with the old-ass mismatched letters. Plus the monthly costs incurred in the form of rent, utilities, payroll and owner’s draw, inventory replenishment, insurance, advertising and marketing, taxes, debt repayment, and working capital.

The only potential edge boasted by running a doughnut business, rather than, say, a full-service restaurant, is the convenience offered by a using a satellite bakery at home, thus freeing up space and allowing for the rental of a smaller store. Once doughnut production is up and running, a “cold spot” can be established where you or your driver delivers the finished doughnuts for purchase by the consumer.  A cold spot can be operating within a few weeks and be operated by one employee. Holler.

OK, so it’s not exorbitantly expensive to make and sell doughnuts. But is there a market substantial enough to support the vast numbers of shops we see in every dilapidated strip mall?

According to one notable franchise website, the following can be said for the current “doughnut climate” as we’ll call it:

“Despite the growing concern on the part of nutritionists and physicians about our overweight population, the doughnut business remains a rapidly growing one. Why the doughnut business is robust is open to debate. Among the possibilities — the price is right. Doughnuts are not expensive. And they’re easy to eat on the run and not too messy. (Some people have been seen devouring them while behind the wheel — not exactly a safe driving mode.) They’re also readily available to whether you’re in Manhattan or the neighborhood mall.”

Although I agree that doughnuts are standard American fare (at least among the low-to-mid echelons of society), I’m not sure that fact alone explains how an entire shop can sell nothing but 65-cent mounds of dough and cover their costs. Let alone compete with the myriad other establishments trying to do the same.

There are some other aspects that could help explain the success of shops pedaling the working-class confection:

The product targets the low- to mid-income consumers so everyone can partake!

There’s a pretty universal customer base given that America is chemically addicted to sugars and starches (myself included ya’ll!).  The sight of a pink box alone makes most of us salivate.

People usually buy more than one doughnut. How can you choose between maple glazed and chocolate frosted? You don’t. You get both. You might even buy a dozen “to share with the office” before personally devouring them over the next 2 days.

You only need one hand to eat them. In this multi-tasking day and age one-handed manipulation is an important quality in a snack food.

They have kitsch-appeal for those wanting a little entertainment value.

But some scholars (yes, folks, scholars) argue that doughnut shops continue to thrive because of their place in our culture. The doughnut as we know it apparently became popular just after WWII, and the suburbanization of America in the years following helped develop the complicated social influence of the doughnut shop: they themselves evolved into symbols of American entrepreneurialism as the country struggled to its feet. I guess that’s why we have a special place in our hearts for them despite the fact that they continue to be associated with the slovenly and gluttonous (my hero Homer Simpson par example).

I can’t say my curiosity is completely assuaged with regards to doughnut shops but at least I can sleep at night knowing that in an uncertain and ever-changing world I can, apparently, count on their presence.