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The Doughnut Bubble

Currently there are in excess of 20 stores that have propped up around the capital with the majority having appeared over the past two years. Michael Lanigan reports.

“IT IS WITH a heavy heart that we have made the decision to take an extended break from doughnut making”, wrote Hilary Quinn, owner of Dublin Doughnuts Company on
Tuesday 24 October.

“Whilst we have loved every minute of the past three years, the time has come to hang up our aprons.”

A supplier to cafés such as 147 Deli, Vice Coffee Inc., 3fe, Dublin Barista School, Camerino and Provender & Family, while doing private orders on the side, her company had been active since 2014 before she decided to make her last batch that Saturday.

“It had been on my mind a while,” she said. “I use the word tired and lethargic, but it’s been a solid few years too.”

The announcement comes during a moment dubbed ‘Peak Doughnut’ due to the saturation of the market in Dublin.

Currently there are in excess of 20 stores that have propped up around the capital with the majority having appeared over the past two years.

It could be read as miniature bubble and naturally as people speculate over the trends decline, within days Hilary was called the “first casualty”.

“I wouldn’t say though that saturation was one of the main reasons,” she contests.

“It’s certainly disheartening to see something I make so lovingly being pumped out by
machines every day. That’s something I definitely did not envisage, but that’s how business works.

Doughnuts aren’t going to go much further if this is the case. We’ve had the same thing with cupcakes and alarm bells are now ringing. I’m not closing because of financial reasons. I want to leave with my head high and in a good place, rather than being forced into it by the market.

Hilary was 21 when she set up the company. At the time it was a gaping hole in
the market, not a bandwagon.

“I thought Dublin was in need of something like this. I was laughed out of banks, business courses and Dublin’s enterprise board. They all said it would never work. The only place was the small Rolling Donuts kiosk. Then Augier Danger came in around 2015, and I’ll admit, I was a bit tetchy when that happened.

They got the wave going. Now, it’s like Starbucks, there’s a doughnut shop on every street corner.

What set Aungier Danger apart as a brand, which captivated people was that it carried
the same stickiness and exclusivity as the cronut, a hybrid of the doughnut and croissant
that from 2013 to 2016 inspired people to queue for two hours in New York just to get
in on the action.

A New York Post headline ‘People in line for cronuts unfazed by nearby corpse’ speaks volumes to this regard.

It was a commodity that was unique, and highly limited, selling out within an hour of Dominique Ansell’s SoHo bakery opening at 8am.

Thriving on word of mouth, social media and the urge to find out what others were
fussing about, as news went across the Atlantic a business such as Aungier Danger was able to capitalise upon that obsession.

On its opening day, 19 October 2015, after taking up residence in a place formerly held by Rolling Donut, the entire deli was sold out in two hours.

Reported on later in various outlets, over subsequent days Irish people too were rushing to buy the treat before the shelves were politely looted.

Clearly a commodity that had stickiness, for aspiring entrepreneurs it was an ideal
opportunity, especially given the simplicity of setting up a shop.

“It’s easier than cafés,” Hilary said.

If you’re doing production off-site, then it’s the simplest model. You need a counter, till, gloves and tongs.

The main asset however, was social media, and more specifically Instagram.

“That’s my target audience. It’s a visual product. People want to take a picture with their
doughnut, coffee and a Dublin background. That’s what people want to see.”

Here, Hilary brought back the comparison to the cupcake fad.

“It’s a lot like Magnolia Cupcakes in New York. That started the whole cupcake thing, and you can almost trace it back to one specific scene in Sex and the City where Carrie sits outside stuffing her face with those cupcakes, lamenting over a personal crisis. The culture here copies America. It starts there. Then it hits London and finally Dublin.”

Tag a friend who loves the icing more than the cake. 🍬😊🎂#magnoliabakery

A post shared by Magnolia Bakery (@magnoliabakery) on

This leads us down a momentary pop cultural rabbit hole. When I ask has she noticed
anyone referencing anything similar on the big or small screen in the context of doughnuts, she is unsure for a moment.

“I’ve heard people talking about Gilmore Girls and a character sitting in their
sweat pants, getting fat with a box of doughnuts. People say they want to have their
Gilmore Girls day. There was also something in Twin Peaks too.”

Both shows, years after finishing, were given a revival during a period in which nostalgia was all consuming.

In the broadest of terms, the past two years have been dominated by nostalgia, on a political, cultural and social level. On a political level, two of the major events to captivate were Trump and Brexit, and both called for a return to an earlier, more idealistic period.

Culturally, cinema has become dominated by reboots, revivals and sequels to films,
largely those coming from the 1980s, another era in Western history dominated by
nostalgic idealism.

And of course, one of the more vital aspects of marketing the doughnuts, which is Instagram was the social media platform originally launched with a strong nostalgic spin; vintage filters, square photos and the site’s plain white layout, all of which were designed to imitate the Polaroid.

“Instragram is where the trend emerged, because when I first started everything was so
photographic,” Lisa Quinlan, head of Rolling Donuts says, her company having grown
from a small O’Connell Street kiosk set up by her father in 1978.

Certainly, with our business, there is a massive sense of nostalgia attached to it.

“The whole joy in doughnuts is nostalgia,” Hilary adds.

“For me it was eating Cuisine de France doughnuts that my mum got when I was younger. My own recipes are done for nostalgic purposes, like New York Cheesecake or Daim Bar doughnuts. Daim bars amazed me as a kid.

“You see, there’s more to this food than meets the eye. It sparks something in people. It gets them thinking. It’s not just that Nutella tastes good. It goes deeper than that.”

In agreement is Ken Cody, owner of Revolution Bakery.

“It’s our childhood that inspires this. It puts a smile on people’s faces. There’s definitely that association, because they bring back old memories, from childhood or for a lot of people involved, the J1.”

Still, if romanticism triggered the trend, the market is what will herald its inevitable decline, although saturation is but a single factor here.

“There is always going to be a doughnut shop,” he notes. “They’ll still be opening everywhere, like the kind of set ups you see in retail chain outlets. That’s made by a white-label bakery. Those doughnuts are pure and utter processed food, and if you knew what was in the dough or the packaging, you wouldn’t eat it.”

Hilary noted similar issues with competition as rival companies are capable of churning out numbers that exceed her cap of 350 per day, while ingredients such as butter are substituted for margarine.

For bakeries who continue to resist using cheaper ingredients, the past few months and
years to come are the uphill struggle, which will likely begin to see people either
dropping out or altering recipes.

Those pursuing the craft from an artisan stance will be suffering a blow here due to wholesale prices, Ken thinks.

“This time two years ago, we were buying a tub of vanilla pods for €50. When I started, they were €40. Now, they are €100. They are dearer than gold. We still use them, but you won’t see many now. The same product is 150% dearer than it was two years ago.”

This had been set off by two factors in Madagascar. Between 2005 and 2015, a kilogram
of vanilla pods was trading for $30. The crop was in abundance and sparked a feeding
frenzy.

However, as the vanilla farmers were finding themselves short-changed on the
deal, they burned their vanilla crops in protest, with the price rising to $100 per kg.
Thereafter, Cyclone Enawo devastated the island causing prices to shoot up to $600 per
kilogram.

“Everything is up though. Madagascar is just the most drastic one. Butter and cream too
have gone up by 20 to 30%,” due to poor harvest in Europe and the increase in China’s
demand for pastries, which are putting enormous pressure on supply as 100kg of butter
leapt from €400 in January 2017 to €518 as of December (it hit a high of €650 in September).

“Really it’s everything,” Lisa adds. “The money we spend on nuts is nuts. We use a lot of
varieties and those prices are changing. Flour, eggs, coconut oil, minimum wage, they’ve
all gone up, so if you can survive fair play.”

Factors, such as these create a dilemma.

Considering the average price of €3  a doughnut is already relatively controversial,
the final question is who will be paying more. In the case of Lisa and Ken, both say they
are willing to concede these losses.

“We couldn’t do that to customers,” Lisa says. “We have to take the hit and figure out from there what to do. It’s just a risky business now. If you’re going into it now, unless you are passionate enough to find and fill a gap that is not already filled, it is challenging.”

As such Dublin “is now awash with poor quality doughnuts and pop ups, but that’s just
healthy competition and you have to roll with those punches”, Hilary concludes.

“I’ll miss it though. I’m going home to Mayo, haven’t been there since May. My sister who
lives in England sees my parents more than I do. I’ll be helping out set up a pub in Clare
and taking time out to start the new trend, because that’s apparently what I do. This was
always going to be a footnote, which you look back on when you’re 90 and say,
‘Remember that time I did doughnuts?’

“It will always be the same whether doughnuts, coffee or cupcakes – variety and making something different helps you survive.”

Related: The owner of Dublin’s Rolling Donut chain says we’ve finally hit peak doughnut

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About the author:

Michael Lanigan

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