Fat Thursday and Fat Business - Donuts on the stock market and ingredient price inflation in 2023

The entire donut industry is estimated to be worth around $16 billion, and could be worth nearly $2028 billion in 20. Where do donuts are most loved? Here the answer is not so obvious, because in Canada. Canadians eat more donuts per person than any other country. Why is that, and is there something special about Canadian donuts? We don't know that until we go to the northern part of the American continent.

Meanwhile, in the United States alone, there are over 200 million people from over 330 million people who eat donuts. About 10 billion donuts are produced annually in the US to meet demand. 44 percent of local consumers eat donuts at least once a week. The average American eats 31 donuts a year. What are the statistics in Poland?

According to the news portal Wiadomoscispozywcze.pl, Poles eat about 100 million donuts on Fat Thursday alone, which is an average of about three donuts per citizen. What is needed to make donuts and what is the inflation of ingredients?

• eggs. As we know, eggs have recently become more expensive, with an average of 10 eggs retailing for PLN 9,14, compared to PLN 5,86 a year ago (dlahandlu.pl). This is inflation of 56 percent.
• Wheat flour. The average price of 1 kg in January 2023 is PLN 4,38, compared to PLN 2,88 a year ago (52% inflation)
• Sugar. According to the dlahandlu.pl portal, the average price of 1 kg of sugar in retail is PLN 6,68 compared to PLN 3,06 in January 2022. Here, inflation is even higher and amounted to 118 percent y/y.
• Milk. The price of 1 liter in January 2023 is 4,58 against 3,29 a year ago. Inflation 39%
• Oil. The price of 1 liter increased from an average of PLN 10,40 to PLN 13,43, i.e. by 29%.

On this Fat Thursday, therefore, one should not be surprised that if donuts are 50% more expensive. compared to the previous year. After all, in the meantime, the costs of labour, electricity, gas and rent have increased.

Donuts on the stock market

One of the most famous donut brands in the world is certainly a chain Dunkin 'Donuts. It has revenues of over USD 1,3 billion. However, it is not listed on the stock exchange, just like Dunkin Brands, which was taken off the stock exchange and went under the wings of the same fund (Inspire Brands). At delisting, Dunkin Brands had a market capitalization of nearly $9 billion with revenues of $1,25 billion. So who survived on the stock exchange and how did the company's shares behave?

Currently, one of the largest representatives of the donut industry, but also the wider confectionery industry on the NYSE is Kripsy Kreme listed with ticker DNU. Its capitalization is approximately USD 2 billion, and revenues are USD 1,5 billion for the last 12 reported months. However, the company still incurs high operating costs, which means that its net result is still in the red. Although DNUT shares rebounded by 18% this year, they are almost 19% higher than last year. under the line. Perhaps a recent partnership with McDonald's will help the company, as McDonald's will be selling Krispy Kreme donuts in nine locations in Kentucky starting Oct. 26 as part of a trial, according to CNBC. Restaurant chains are experimenting with new menu items and promotions. Krispy Kreme CEO Mike Tattersfield said customers are willing to spend money on inexpensive treats like fresh doughnuts. Will this plan work? We will see in the next quarterly results of DNUT, which will appear the day before Fat Thursday.