Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Doughnuts Are the New Cupcakes

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Next time you find yourself in Durham, N.C., do yourself a favor -- get a doughnut muffin at Scratch Bakery. Apparently, Scratch is well ahead of the curve, getting in early on the doughnut craze. For the past few months, foodies the world over -- or maybe just in Brooklyn and San Francisco -- have been calling for the rise of the humble doughnut. For years, we've been forced to endure life under the frosted iron fist of cupcake supremacy, but the reign of terror is coming to an end.

This could be the boost that Krispy Kreme (NYSE: KKD  ) and Dunkin' Brands' (NASDAQ: DNKN  ) Dunkin' Donuts need to have a stonking -- look it up -- 2014.

The culinary outlook for 2014
Almost overnight, doughnut stores started popping up across the nation last year. In Richmond, New York City, and Seattle, doughnuts have been taking the main stage. The Cooking Channel launched Donut Showdown last year, pitting North American doughnut business against each other in a taste challenge.

For restaurants, doughnuts have a massive appeal. The ingredients are cheap, the preparation is largely mechanical, and the trendy aspect allows for solid pricing. Doughnut Plant, a New York City chain, charges more than $2 per treat for even the basic glazed doughnut. Even at that price point, the restaurant gets rave reviews. With the market turning toward the doughnut, Dunkin' Donuts and Krispy Kreme are perfectly poised to take off.

The business outlook for 2014
Expectations are high at Dunkin' Donuts, to be sure. During 2014, Dunkin' Brands is expecting its licensees and franchisees to open about 400 new locations in the U.S. and more than 300 additional locations worldwide. Almost all of the U.S. locations will be Dunkin' Donuts, while the international mix will probably contain more Baskin-Robbins restaurants.

Krispy Kreme has also laid down an impressive expansion plan. By 2017, the company wants to increase its store count from 250 to 400 in the U.S. and from 560 to 900 internationally. Krispy Kreme is relying on a mix of franchise and company-owned locations in the U.S., and is focusing efforts on a perceived strong opportunity in the Southeast.

For both brands, 2014 looks like a clear winner. Even if doughnuts fail to be the new cupcakes, Dunkin' Donuts and Krispy Kreme are going to make a splash. Add in the coffee aspect -- bean prices are dropping -- and both companies could make 2014 the new 2013. That would be truly impressive.

Investing on trend in 2014
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2808551, ~/Articles/ArticleHandler.aspx, 8/30/2015 10:02:15 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Andrew Marder

Andrew Marder worked in retail for years, holding jobs ranging from bookseller to bank strategy analyst. He has worked for the Motley Fool since 2012, and loves coffee.

Today's Market

updated 1 day ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 3:59 PM
DNKN $51.69 Up +0.16 +0.31%
Dunkin' Brands Gro… CAPS Rating: ***
KKD $17.22 Up +0.12 +0.70%
Krispy Kreme Dough… CAPS Rating: **