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Doughnuts. There's A Great Future In Doughnuts

By Anthony Todd in Food on Oct 25, 2012 6:20PM

2012_4_24Doughnut.jpg "Make $500K a year working four hours a day." It sounds like one of those ridiculous e-books that sidebar ads are always trying to sell us: "Make a living working for 15 minutes a day while also petting your cat!" But in this case, it's real. One of the hottest new food trends also turns out to be one of the most profitable. Now we know why everyone and their brother are opening doughnut shops.

In the inaugural issue of Food Fanatics, a new trade magazine, Carly Fisher surveys the nation's doughnut shops. Instead of another trend piece filled with glamour shots of dripping frosting, Fisher focuses on the business side of things. Have you noticed that all of Chicago's trendy new doughnut shops are actually carved out of other, existing businesses? Do Rite is part of Petterino's, Doughnut Vault is part of Gilt Bar, Glazed and Infused is part of Francesa's. This dramatically reduces the cost of opening a new business.

But it gets even better. Brendan Sodikoff told Fisher that Doughnut Vault, open for only four hours a day, brings in $500,000 a year. It only cost him $50,000 to develop the space. Presumably, the other trendy doughnut shops are making slightly less (shorter lines) but have similar costs, making it totally obvious why these shops are popping up everywhere.

On the plus side, it works out for consumers—fancy doughnuts are a relatively cheap treat. Sodikoff doesn't skimp on ingredients, either, so you're getting more of your money's worth.

“You can produce a doughnut that’s 10 to 15 percent food cost, or you can make a product that’s 40 percent food cost,” Sodikoff says. “We tend to use high-quality ingredients like premium chocolate and fresh butter, so our food costs are usually in the high 20s.”

Fisher also surveys shops like Voodoo Doughnuts in Portland (which makes extra dough off of products and collaborations) and Primo’s Westdale Donuts in Los Angeles. The owner of Primo's insists it's not a gold mine, while the lines and sales figures at Voodoo (they sell 20,000 doughnuts every day) indicate that they might as well have a printing press for money in the back room.

On the other hand, there are no exact figures on the costs and profits for a place like Glazed and Infused, which has an off-site dedicated baking facility and keeps making doughnuts all day. The next question for Fisher (or another reporter): Is the annoying-to-consumers "Stay open until you run out" model more profitable than a constant-flow model? Glazed and Infused, can we see your books?