Holey battle emerges in Japan's doughnut war

Doughnut lovers have plenty of opportunities to enjoy freshly made treats these days as convenience stores are marketing original creations and doughnut specialty stores are ratcheting up their efforts to attract customers.

Major convenience stores entered the doughnut market full-scale last autumn. Customers reacted favourably as companies began selling doughnuts as an item that goes well with their freshly brewed coffee. Therefore, convenience store operators are concentrating further on the product by selling new items.

Newcomers compete

Seven-Eleven Japan Co., operator of 7-Eleven convenience stores, is scheduled to start selling Seven Cafe Doughnuts by the end of August at all its stores, which number about 17,800 across the country.

About six kinds of doughnuts will always be displayed next to the stores' cash registers, including chocolate old-fashioned (100 yen [S$1] including tax) and two other standard types.

The company makes a point of delivering the doughnuts from its own bakeries at 24 locations across the country within three hours of production.

The domestic doughnut market is said to be worth 130 billion yen annually. Seven-Eleven hopes to expand the doughnut market itself by setting a goal of 60 billion yen in sales in fiscal 2016.

Lawson convenience store operator Lawson, Inc. has increased the number of its stores selling doughnuts next to the stores' cash registers to about 8,000, or 70 per cent of the total.

Its Hawaiian doughnut (100 yen including tax) is deep-fried at the stores and has a crisp texture. The company tries to make the taste of doughnuts similar to "what mother would make at home," according to an official at the company's merchandise headquarters. The company is also promoting its coffee, which is often purchased with a doughnut, and lowered the price of a cafe latte by 30 yen at the end of April.

Established brands struggle

Doughnut specialty stores are not standing idly by while convenience stores strengthen their marketing. At Mister Donut, a doughnut store chain run by Duskin Co., each store makes doughnuts from scratch.

By reducing the number of doughnuts made at one time, the company aims to create a system by September in which it sells fresh doughnuts within four hours of production at all of its about 1,300 stores, according to company executive Kenichi Miyajima.

In the case of Mister Donut's standard old-fashioned doughnut, for example, some stores usually make about 60 at once. That number will be reduced to about 25 from September.

Mister Donut, which will celebrate the 45th anniversary of the opening of its first store in Japan in April next year, is utilising its long history. The company has held a "revival selection campaign" to sell doughnuts that were popular in the past by making them available for a limited time. Mister Donut has sold more than 1,000 types of doughnuts over the years, and reproduces them at customers' request.

The third campaign is being held through the end of August.

Krispy Kreme Doughnuts, Inc., which was launched in the United States in 1937 and entered the Japanese market in 2006, is promoting a money-saving service to customers when they purchase a dozen doughnuts.

To boost demand for home parties, the company is focusing on its sets of a dozen doughnuts.

The company's "assort dozen" service lets customers choose 12 of their favourite doughnuts from about 20 varieties. At 2,000 yen including tax, this brings a maximum savings of 760 yen over purchasing 12 doughnuts individually.

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