Doughnuts: In Sour Times, a Sweet Success Story

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How do you like your burger? With bacon, cheese and a doughnut for a bun, you say? Well, that's exactly what the Crave Shack, a burger joint in New York City, is offering with its version of the Luther burger — an enigmatic concoction, allegedly named after the late R&B singer Luther Vandross, that stuffs a quarter-pound bacon cheeseburger between sugary doughnut halves as sweet as the vocal stylings of its Grammy Award–winning namesake. Also available in such places as Decatur, Ga., and St. Louis, the Luther burger may sound revolting, but it — along with bacon doughnuts and doughnut ice cream sandwiches — underscores a peculiar culinary trend: the doughnut is back.

The restaurant business is still reeling from the recession — there are some 5,000 fewer restaurants in the U.S. than there were just a year ago — but the number of doughnut shops is increasing. The big three doughnut chains (Dunkin' Donuts, Krispy Kreme and Tim Hortons, the Canadian franchise that invaded the U.S. in 1984) had more than 10,000 stores in the U.S. this past spring, up 2.2% from 2009. Krispy Kreme managed to more than double its fiscal first-quarter profits from the previous year. Even independent stores, like the famed Voodoo Doughnut in Portland, Ore., reported a 0.1% increase in the number of locations. Though a modest improvement, Bonnie Riggs, a restaurant analyst for market-research firm NPD Group, still finds it impressive. "Holding your own in this environment is a mark of success," she says.

That success is largely attributed to the desire to eat cheap but tasty foods we are familiar with. "Price is part of the increased popularity, but it's comfort food, it's going back to our roots," says Riggs. In 2009, Dunkin' Donuts launched its first major marketing campaign for doughnuts in over a decade. The franchise had been so focused on its coffee and new products like bagel twists and waffle sandwiches that it forgot the power of the doughnut in these tough economic times. "Faced with daily disappointments and struggles, the doughnut is one of those affordable treats that can make someone's day," says Frances Allen, a brand-marketing officer for the company, which has been running prime-time ads and which ended 2009 with $200 million more in sales than the previous year.

According to NPD, the number of doughnuts served in the U.S. — an estimated 1.8 billion — was up 6% this past spring, compared with the same period last year. Who is snarfing down all these doughnuts? Middle-income men ages 25 to 49 eat the most doughnuts, and overall consumption on the East Coast is 37% above the national average, which is approximately nine doughnuts per year.

It's true that a chocolate glazed doughnut at Dunkin' Donuts has fewer calories and less fat than the much more socially acceptable breakfast item of a plain bagel with cream cheese. But, cautions Dr. Frank Hu, a nutritionist at the Harvard School of Public Health, "regular consumption of highly refined carbohydrates such as doughnuts has been shown to induce big surges in blood sugar and insulin. In the long run, this can lead to critical factors that lead to the development of Type 2 diabetes."

For health-conscious eaters, help could be on the way. A Brooklyn company called Holey Donuts! appears to have found the Holy Grail: a low-fat doughnut that actually tastes good. Flash-frozen and shipped by FedEx, they have less than half the calories of a traditional doughnut and only four grams of fat, and come in flavors like raspberry graham cracker and banana cream pie. Launched in 2008, Holey Donuts! has become a sensation. Just don't put them on a bacon cheeseburger.