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Independent Doughnut Shops Charm Chicagoans

The busy morning traffic at Dat Donuts has subsided. Anne has just finished rearranging the freshly baked doughnuts and is cleaning the grill when two middle-aged women walk in, immediately heading for the doughnut case.

The customers are greeted with a smile and pleasant “How are you?” from Anne. After a few minutes of decision making, one customer asks for a single chocolate glazed. She asks Anne to heat it in the microwave.

“I bet they’ll be just heaven-heated,” the customer said. Anne says she’s not supposed to, but the customer pleads — “Just 10 seconds.” Anne looks at the customer, exhales a breath and gives in. The customer pays 98 cents and walks out with a smile.

“To produce a good quality, fresh doughnut, cut by hand is something really hard to find,” said Darryl Townson, owner and operator of Dat Donuts.

Dat Donuts, 8251 S. Cottage Grove Ave., has been open in the Chatham neighborhood for 16 years. Success led Townson to open a second location, 1979 W. 111th St., in the Beverly neighborhood eight months ago.

Independent doughnut shops used to fill the Chicagoland area, but competing against national behemoth Dunkin Donuts was a futile fight for many. Dunkin Donuts has held a competitive advantage, between automated equipment and purchasing power over goods. However, they cannot compete against the freshness and local touch independent doughnut shops offer.

The big retailers thrive because their efficiency of scale allows them to set prices at the absolute lowest because profits are spread over numerous outlets, said Heidi Hedeker, member of the Chicago Area Retail Bakers Association.

“An independent business person isn’t able to make money on that margin, so they’re forced to go out of business,” Hedeker said.

Dunkin Donuts are individually owned by franchisees and do not discuss details of sales and operating costs, said Carrie Reckert, spokesperson for Dunkin Donuts.

“Our strength is the value we offer,” Reckert said in an email. “Research says that our consumers consider Dunkin Donuts to be a very good value and of course that is critical in this economy.”

The intense work needed to operate these independent businesses is another contributing factor to their dwindling existence.

“It’s an 18-20 hour day job,” Townson said.  “With a small business like this, you have to be hands-on with everything.”

Ron Pavelka has operated Bridgeport Bakery, 2907 S. Archer Ave., for 35 years. He has two bakers who start at 10:30 p.m.; he shows up at midnight to assist. Another employee starts at 3 a.m. to wrap wholesale product, a driver shows up at 4:30 a.m. and the storefront clerk starts at 6.

“It gets a little complicated, but that’s the way I like it,” Pavelka said.

Bridgeport Bakery sells a wide variety of cake and yeast doughnuts, coffee and wedding cakes and fresh-baked bread. It sells a portion of products at wholesale to grocery stores.

“When the front’s slow we sell out the back to keep us busy,” Pavelka said.

A key ingredient for successful doughnut shops is to offer other products or services. Peak doughnut season is between September and April, Townson said, because the hot weather makes heavy doughy food undesirable in conjunction. Also, he said, people in the summer tend to watch their weight.

Dat Donuts has an ice cream parlor to cool the summertime appetite and offers breakfast sandwiches to meet morning traffic demand.

The personal customer interaction and the relationship established with the community is another ingredient for successful small businesses.

“It’s a more human landscape than these other places,” said Hedeker. “There’s a protocol for handling every transaction.”

When Sawyer Lahr was living in the Bridgeport neighborhood, he would stop in the bakery each morning on his way to work, always greeted with familiar smiles and small talk. Sometimes if he didn’t have exact change for a pastry, the cashier covered him.

“I was taken by their simplicity,” Lahr said. “It’s always fresh, they bake it everyday.”

“People demand a fresh product and when they can see you making it out here in front of them producing it, that’s how you satisfy your customers,” Townson said.

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Posted by on April 29, 2010. Filed under What's Up. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.