The Freakonomics of Fresh Donuts and Bubble Teas

Dunkin Donuts Delivery to Singapore!

I remember back in the day when Bubble Tea shops would spring up every 200 meters along Orchard road. A friend once mentioned how a simple investment of $20k would fetch you everything you needed to open one, and how the revenue would be more than enough to cover that within the first month or so. These Bubble Tea drink shops were instantly started up, but also quick to die off. This perhaps describes the fickle state of consumerism in Singapore, where there seems to be an abnormally accelerated life cycle to businesses.

Flipping the page, we turn to this present craze of donuts in Singapore. Ever since I returned to Singapore early this year, I’ve been noticing extremely long lines for the donut shops. Not all were equal though as IZreloaded highlighted, the Donut Factory @ Raffles City was of particular mention. With lines forming even before the store opened past noon, the lines have been seen to stretch across rows of shops, where you’ll spot people like me snapping pictures and wondering if I should join in.

Singapore Day 5Singapore Day 5

The latest incarnation of this craze has now extended beyond our borders, where hungry netizens would go online to place orders for the now extinct Dunkin’ Donuts. While many bloggers were curious how it worked, Nadnut actually tried it out and gave her “yummy but bad service” report here. It’s currently rumored to be operating from a shop in Johor Baru, where weekly drop deliveries are made in central locations around Singapore. If this sounds like how crack gets delivered in the darker parts of U.S. neighborhoods, it is.

Krispy Kreme
Photo by pochacco20

Will this donut craze die off? I don’t think it will… not so soon. What we’ve experienced is only a tip of the iceberg, like what weed is to cocaine. The prima donna of donuts, Krispy Kreme, has yet to make its stand in Singapore. While waiting at Changi Airport an entire day (don’t ask why, just watch), I’ve already noticed streams of Singaporeans returning from the States, Hong Kong or even nearby Jakarta, loaded with boxes of two dozen Krispy Kreme each. It seemed like the de-facto thing to do, though the sad part is that by the time it reaches our shores, the magic is lost.

You see, when the “fresh off the oven” neon sign fires up at the Krispy Kreme outlet where I stayed (in Buffalo), it’s almost a magical experience buying a donut hot and sugary, taking a bite, and letting it simmer then melt in your mouth. Packrat has a video showing Krispy Kreme’s process, which is quite fun to watch. I wouldn’t advised daily visits, but this has been somewhat replicated on a smaller scale by the folks at the Donut Factory, where donuts are made fresh and thus the queues are long.

Thanks to the due diligence of CowboyCaleb’s readers, it’s noted from this Krispy Kreme franchising page that:

Our franchisees must possess the capital sufficient to fund the development of the market. We currently grant franchises on an area development basis. Specifically, our area developers are required to build multiple stores (10 or more) in a market. The minimum net worth requirement is $30 million or $1,000,000 per store to be developed, whichever is greater. For instance, a 15-store market requires a minimum net worth of $30,000,000.

So if you could pool your rich friends together and each open one of fifteen stores in Singapore, each of you would only need to fork our US$2 million. Time to crack open my piggy bank… any takers? 😀

In summary, I believe that the Bubble Tea trend in Singapore died because it was a highly accessible market, which created an oversupply of bubble tea shops in Singapore, which later developed into a general distaste of having more black balls in one’s mouth. This donut resurgence came about because supply had been cut (we lost our Dunkin’ Donuts!), and the rebirth included a fresher approach to consuming donuts (duplicating Krispy Kreme’s technique). What’s interesting though is whether consumers know how to limit themselves to any particular product, or whether supply will always have to be limited in order to sustain demand, i.e. maintaining low number of fresh donut shops.

23 thoughts on “The Freakonomics of Fresh Donuts and Bubble Teas

  1. i wanna try krispy kreme just to see what’s the hype about. so are you gonna import krispy kreme? if so, better watch your back. hohoho.

  2. Nadnut: If you’re feeling suicidal, here’s a gigantic collection of Krispy Kreme doughnut photos on Flickr. Actually I think I know exactly who to talk to about doing this KKD delivery idea. We’ll see… perhaps I’d stop school if this makes a killing. 😛

  3. I wanted to try Krispy Kreme in Tokyo, but there were such long queues *in the freezing cold*.

    I once saw a guy with a huge see-through carton of boxes and boxes of Dunkin Donuts on the MRT. Must be their mode of delivery.

  4. I think it’s a fad that will die off. I remember buying from the Donut Factory in LA last year before the Singapore store opened and the brand was alien to me – there was no queue and it was like buying donuts from any ordinary store.

  5. Yeah, it’s a fad alright. I got a couple of donuts from the donut stall at VivoCity level 2 when it first opened. Nothing spectacular. These days there are snaking queue lines whenever I pass by. I cannot figure out why.

    At the end of the day, no matter how much I love donuts, they are just donuts. I think the craze would fizzle out soon.

  6. Alright, if Kevin is going to open KK, I’ll chip in… (Found $8.15 in change in my pocket, that should be a good start.)

  7. how come no one comments about the pop dohs at takashimaya basement next to the gelato and the brownie place?

    its probably way better than regular donuts.. it has TEXTURE..

  8. KK – you have to eat it fresh while it is hot. And they offer you a free donut when you are in the store getting your dozen. Yummy! Oddly, the KK franchise in Phoenix went under – so that is food business is – fickle!
    Personally, I miss the donuts (made from sweet potato?) that are sold at the Malay stalls in the hawker centers…maybe we should “upmarket” our local donuts! The ones at Bedok are very good.:-)

  9. Hmm, there seems to be more types of donuts as you guys have shared. The puffy Japanese ones as loupgarou mentioned, and the sweet potato kind sold at Malay stalls. I’ll need to search for these, shorter lines 😛

    I just found out that the Vivocity donut shop was setup by two girls, and was featured in the media. That’s under a different name from the Donut Factory business, and people I’ve interviewed said it wasn’t as good as the Donut Factory version.

  10. I’ll always love donuts, fad or not. The Taka Pop Doh donuts are fantastic when they are fresh. As loupgarou mentioned, the texture is out of the world, because it’s so light, and the frosting is just right. Not doughy/cakey like other donuts I’ve tried, which tend to taste like flavoured bread.

    I like the Malay stall donuts too. I think they are made of either tapioca or sweet potato.

  11. Hi Kevin. Wanna try a doughnut? I’ll be at City Hall picking my order around 3:30 today, Sunday. 🙂

  12. Leon: Hahaha that’s nuts! I think I’ve had enough donuts to last me a lifetime. Went out with a blogger yesterday and filmed ourselves eating donuts from all over Singapore, then giving our reviews. It was insane! I’ve edited the video and am uploading now. Watch for it 🙂

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