Robert M. Kerr

Food and Agricultural Products Center

 

By Dave Moe, Food Processing Consultant

 

“Create a shortage to increase the demand” could be a marketing tool or a myth. One current shortage is romaine lettuce caused by a food safety issue and not marketing. Nobody knows what the long-range outcome will be now Romaine is available again after the pipeline is refilled. Possibly the demand will be reduced. The same thing happens, for example, when a product, a store, a restaurant or food delivery is available in some markets but not others. People want what they can’t have or what is not convenient. I wish there were Trader Joes, Whole Foods Market, Vienna Hot Dogs, Grub Hub, Pho, In-N-Out Burgers, Krispy Kreme Doughnuts, Shake Shack, etc., close to where I live in Florida.

 

The shortage of two of the examples above was eliminated with the opening of a Whole Foods Market and a Krispy Kreme store this past month in my Florida county. Now, we will see if the demand is sustainable over time and if property values go up based on the “halo” effect.

 

Krispy Kreme brings joy and a new experience to current and future doughnut connoisseurs and sadness to some local doughnut shops. Whole Foods fills a specific market niche for groceries and adds new perks for Amazon Prime customers.

 

What does the above have to do with anything? Krispy Kreme sold almost 1 million doughnuts in the new store over the first two weeks of operation. That is a lot of flour, sugar, fat and other ingredients processed locally into something that is not only perceived to be delicious but is considered by some to be an actual delicious food. Jim Morgan, chairman of the Board of Directors of Krispy Kreme noted (after the purchase by JAB Holding Co): “For nearly 80 years, our iconic brand has been touching and enhancing lives through the joy that is Krispy Kreme.” For doughnut consumers, “joy” is a cleaner marketing term than “guilt.” There is no joy in letting the guilt eat you; just eat the doughnut and move on.

 

The recent Whole Foods opening can provide a sense of food balance to the diet of doughnut eaters, as well as non-doughnut eaters. Doughnuts of any kind may not be available in your local Whole Foods Market due to its product standards. Whole Foods quality standards state: “Whole Foods Market carry natural and organic products because we believe that food in its purest state – unadulterated by artificial additives, sweeteners, colorings and preservatives – is the best tasting and nutritious available.” This statement sounds anti-doughnut, except for the “purest state” and “best tasting” parts.

 

I am happy to report that Whole Foods may support the “invasivore” movement (noted in my October 2018 blog article). Whole Foods “partners with Florida spear fishermen who are tasked with targeting lionfish for sale in the stores. The market offers lionfish ceviche, smoked lionfish, as well as fresh lionfish fillets,” according to a local news article.

 

There has been some ups and downs for both the Whole Foods and Krispy Kreme business models over the years. This can be reviewed in Wikipedia for further details. There is no question the Whole Foods list of “unacceptable” ingredients for food has had an influence on consumers, industry food buyers, suppliers and processors over the past 35 years. The removal of artificial preservatives, colors, flavors, sweeteners and partially hydrogenated oil from foods has continued to expand and is now a mainstream label and/or product feature. There is a sense of pride when entrepreneurs get their products into a Whole Foods Market. There is also a sense of pride when people get a chance to try a Krispy Kreme doughnut for the first time.

 

The Whole Foods list of ingredients they consider “unacceptable” in food contains about 80 items. This list is short compared to the total number of chemical additives permitted for use in foods by the FDA. The Pew Charitable Trusts conducted a comprehensive assessment of the federal food additives regulatory program (2010 – 2013). They noted approximately 5000 additives can be directly added to foods and a similar number of indirect additives that can contact food through packaging and contact surfaces. This leaves a lot of room to expand “unacceptable” additive lists in the future.

 

In October 2018, the Food and Drug Administration banned the use of seven specific artificial flavors (mint, cinnamon and citrus). The FDA revoked their use after Earthjustice asked the Ninth Circuit to act given the evidence they are carcinogenic. Industry has two years to comply.

 

If the ingredient statement for a Krispy Kreme glazed doughnut is checked against the Whole Foods “unacceptable” list, there are some shortcomings. The glazed doughnut ingredient statement (2016) lists 36 ingredients of which five are considered “unacceptable” by Whole Foods. The “unacceptable” includes specific fat, dough conditioners and preservatives. The doughnut recipe appears to have been “cleansed” a little based on ingredient and nutrition facts provided in 2004 and 2016 by Krispy Kreme. Enriched “bleached” wheat flour is now enriched wheat flour, and fat has been adjusted in order to claim 0 gram trans-fat. The doughnuts may not be approved by Whole Foods, but they are approved by many doughnut fans.

 

“The modern donut … is vastly different from the old concept of the indigestible grease-soaked donut … The baker exercises precision control on fat absorption, fat temperature and time in which the donuts are being cooked. We do believe that the modern donut is a highly nutritious, energy food.”

 

The above is the best marketing spin I have seen for doughnuts, except the “joy” and “delicious” parts are left out. The above quote is from a letter sent by the Doughnut Corporation of America to the assistant director in charge of nutrition, Department of Defense (1942). (“Pandora’s Lunchbox” by Melanie Warner 2013). The objective was to get their product “Vitamin Donuts” approved by the War Food Administration. “Pep and Vigor” was claimed due to using flour enriched with thiamine (vitamin B1). The administration suggested the name “enriched flour donuts” as an alternative. After the “vitamin” claim was turned down, the product was dropped. 

 

Krispy Kreme announced the introduction of a “whole wheat” glazed doughnut made with 100 percent whole wheat with a sweet caramel taste in a 2007 press release. It was aimed at “health-conscious” consumers. I can’t find any evidence this product still exists.

 

If we summarize the above, it is seen that a business can be built around excluding certain ingredients from foods and placing specific requirements on the products sold. A successful business also can be built based on “who cares this stuff is just good and I can eat my veggies tomorrow.”

 

When I entered the new local Whole Foods store, I noted plenty of fresh seafood, meat, produce, bakery, sweets, drinks, snacks, as well as “eat in” or “take out” prepared foods. It was evident “processed” and “less processed” foods with short- or long-ingredient statements were still present. Like most new store openings, there was an abundance of “gazers” and “geezers” wandering around, trying to decide if this was a place to enhance one’s lifestyle in some way.

 

“Natural” and “organic” foods are now common terms describing foods sold in conventional supermarkets and other venues. This was not true when I visited the original Whole Foods flagship store in Austin in the mid-1980s. My first impression, at the time, was Whole Foods presented an interesting store concept. However, the unique format, products and brands added more to my experience than their marketing mission.

 

“Natural” has become “real” even though the term is undefined. Excluding specific “artificial” ingredients is also “real.” “Organic” is perceived to be “more real” than “natural,” so it must be “naturally good.” Krispy Kreme doughnuts can be considered “naturally good” even though they do not fit the undefined terms.

 

When I entered the new Krispy Kreme store, I noted 15 varieties of donuts, apple fritters, hot and cold beverages and even bagels. The “gazers” and “geezers” were mostly in their cars waiting to receive “joy” at the drive-up window. The line inside was shorter and few people sat at the tables obtaining immediate “joy.” The same “fresh from the fryer” donuts were available when I visited Krispy Kreme the first time in New York City and the second time in Oklahoma City.

 

As a bit of trivia, Steven Cassidy (an American Rapper) went by the name of “Krispy Kreme” in 2012 until challenged for trademark infringement. He is now known as “Froggy Fresh.”

 

I predict both stores will be successful catering to “health conscious” and other consumers in the community. Both fill a void geared toward different demographics and expectations. There are already a variety of direct and planned competitors already in this market for both stores. I plan to continue to visit our local French bakery and a variety of food vendors to fill any “everything in moderation” food fixes.

 

“If more of us valued food and cheer and song above horded gold, it would be a merrier world.” – J.R.R. Tolkien