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Non-Tech : Krispy Kreme Doughnuts, Inc. (KKD)
KKD 21.000.0%Aug 4 4:00 PM EDT

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To: Toby Zidle who wrote (891)7/26/2004 10:48:30 PM
From: Jon Koplik   of 1001
 
WSJ article on Boston / high number of doughnut stores.

July 26, 2004

Boston's Big Dig Isn't the Only Hole That's Famous Here

Area Has One Doughnut Store For Every 5,750 Residents; Mr. Shannon Has a Cream

By ROBERT TOMSHO
Staff Reporter of THE WALL STREET JOURNAL

BOSTON -- With thousands of volunteers lined up to man information kiosks and serve as "Beantown Buddy" guides, delegates to this week's Democratic National Convention will get plenty of help finding landmarks like Fenway Park and Bunker Hill.

But out-of-towners who do get lost on the city's winding streets won't have any trouble tracking down another unlikely icon of Boston life: the doughnut shop.

There are at least 1,050 of them in the Boston market, according to NPD Group Inc., a Port Washington, N.Y., marketing-information concern. That sifts out to one doughnut store for every 5,750 residents -- nearly eight times the national average. Among American cities, only Providence, R.I., Boston's much smaller New England neighbor, has more doughnut shops per capita. Boston also has many hard-to-track doughnut stands that NPD says it may be missing, in locations such as service stations, sandwich shops and hardware stores.

When local television producer David Andelman was looking for a condo in downtown Boston, he told his real-estate agent he wouldn't live anyplace where he couldn't walk out the door, punt a football and hit a Dunkin' Donuts outlet. Now, he lives on the 28th floor of a building with two of them, on adjacent corners. "I experiment, kind of like a wine-tasting," he says. "How does a hazelnut [coffee] go with a chocolate doughnut? How does a decaf go with a glazed?"

Retired rental-truck worker Donald Nicholson has been going to the Donut King, in neighboring Quincy, Mass., nearly every morning for 15 years. He favors the mom-and-pop shop's mammoth cake doughnuts, adding that anybody he needs to see is usually there. "You need your car fixed, there's a mechanic," the 69-year-old says. "You need your pipes fixed, there's a plumber."

Doughnuts are thriving in Boston even in an era of carbohydrate conniptions and trans-fat trepidation. Consider the great doughnut debate.

State Sen. Charles Shannon, a former policeman, sparked it when he set out to name an official state doughnut at the behest of some grade-school students from his district, north of town. They wanted to honor the Boston cream, a custard-filled concoction slathered with chocolate icing.

But politicians from the hinterlands balked at designating a pastry so closely associated with the big city. Cele Hahn, then a state representative from Westfield, complained that, in her neck of the woods, Boston creams were known as "Long Johns" and "Bavarian creams."

Doughnut Debate

"Should selling Boston cream doughnuts be mandatory of bakeries?" Ms. Hahn wrote in one 2001 newspaper column. "How about mandatory eating?"

After six years of wrangling, Sen. Shannon finally claimed victory for the Boston cream last year, but not before critics started calling him Sen. Doughnut.

Doughnut-like desserts have been part of the local cuisine since colonial times. But the pastries got a big boost with the 1950 founding of Dunkin' Donuts in Quincy. These days, the company is a unit of the British conglomerate Allied Domecq PLC, but 875 of its 3,900 U.S. stores are still located in the Boston area. "It's a New England institution," says John Glass, a food-industry analyst in Boston for CIBC World Markets. "It's like the Red Sox or the Boston accent."

Or a piece of the American dream for Victor and Octavio Carvalho, franchisees who now own the original Dunkin' store in Quincy. Sons of a Portuguese immigrant who got into the doughnut business in 1979, the brothers are part of an extended family that owns about 400 Dunkin' outlets. "You go to a family wedding and it's like a corporate event," says Octavio Carvalho.

Industry analysts say that for years, Dunkin's dominance helped deter North Carolina's Krispy Kreme Doughnuts Inc. from entering the market. A spokeswoman for Krispy, which recently opened its first outlets in Boston, says the delay was simply a matter of finding the right franchisee and real estate, and wasn't affected by Dunkin's market share. Meanwhile, Tim Hortons, the big Canadian doughnut chain, a unit of Wendy's International Inc., just entered the market with the purchase of a Rhode Island chain that has several stores in Massachusetts.

Then there is Honey Dew Doughnuts, in suburban Braintree, which has 120 stores in the Boston area and plans to open 100 more here in the next 10 years or so in places like hospitals, college campuses and sports stadiums.

The heightened competition has sparked zoning and licensing battles as chains vie for a shrinking pool of prime locations and citizens groups fight back against traffic at doughnut drive-thrus and changes to their neighborhoods. "But I think we have an easier time because we are purely local," says Jim McKenna, Honey Dew's executive vice president, who refers to British-owned Dunkin' as "that United Kingdom conglomerate."

Taking on the doughnut chains isn't easy. Just ask exercise enthusiast Mark Fenton, host of the PBS television series "America's Walking" and an elected member of the planning board in Scituate, a small coastal town just south of Boston.

After a second corporate-owned doughnut store sought to open in Scituate earlier this year, Mr. Fenton mounted a public counterattack, arguing that the chains would drive out local businesses, change the quaint town's character and add to the nation's obesity epidemic. The town council backed his proposal to ban such outlets but, when the issue went before citizens at the town's annual meeting in March, it failed by eight votes. "It's shocking to me," says Mr. Fenton, who adds that he has never set foot in such a doughnut store and probably never will.

Breaking free of such deep-fried tradition has been more difficult for politicians like Boston City Councilman John Tobin, who last year mounted a crusade against childhood obesity, urging the Boston schools to get fatty foods out of the cafeterias and encourage kids to get more exercise.

Even so, the councilman is also a former doughnut-shop worker and, when he wants to hold constituent meetings, he knows it's important to schedule them in places where people like to gather. In the West Roxbury neighborhood he represents, that would be Anna's Hand Cut Donuts.

"I just have the coffee," Mr. Tobin says.

Write to Robert Tomsho at rob.tomsho@wsj.com

Copyright © 2004 Dow Jones & Company, Inc. All Rights Reserved.
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