Doughnut industry bites into Asia

Some of the world's top doughnut chains are rolling into China, Taiwan, South Korea and Japan and elsewhere in the region as Asians embrace the Western fast food fad.

by: Reuters: Doug Young | 18 Jun 2007

Chains like Krispy Kreme, Dunkin' Donuts and Mister Donut are setting up shop in a region not known for its sweet tooth, reflecting a growing openness to foreign foods and rising living standards, according to the chains and consumers who sometimes wait in line for hours for the treats.

This traditional American treat is really taking a 'bite' out of the Asian food market in a big way.

Following its arrival in Taiwan late last year, the U.S. chain now has five stores in Taiwan, and is aiming for 10 by year-end along with T$200 million ($6 million) in sales this year.

Six months after entering Japan late last year, Krispy Kreme still draws crowds into its stores, following an early rush that saw hundreds of people sometimes waiting up to two hours to buy donuts, said spokeswoman Mayumi Jinji.

The rise of the donut in Asia reflects not only a growing openness to Western food in the region, but also rising affluence of consumers willing to spend a little more for extra treats beyond the daily rice box.

Asian Flavour
At the equivalent of about 90 U.S. cents, doughnut in Taiwan from Dunkin' Donut and Mister Donut are about 50 percent more expensive than those available in local bakeries, and three times the price of similar fare from street vendors.

"The market for gourmet foods here is becoming more mature," said Tadashi Kitami, head of Mister Donut in Taiwan.

"This is definitely related to people's living standards." He added that doughnut in Taiwan are not only a one-off snack for many, but have also become a gift item, hence people's willingness to pay a little more.

In their Asia expansions, the doughnut makers admit to tweaking their recipes, much the way fast food chains like McDonald's and Yum Brands' KFC and Pizza Hut. These chains have added new products and emphasized certain foods to suit local tastes.

Dunkin' Donuts Taiwan menu includes such foreign flavours as green tea and honeydew melon donuts, while Mister Donut also offers green tea and flavours like strawberry and sesame.

Not quite as appetizing as the 'double-chocolate glazed' American variety!

One of the biggest differences is in sweetness, with many doughnut makers toning down their sugar content in a nod to Asians' generally lower preference for sweet foods.

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