“The [innovation hubs are] going to serve those local communities. So, our first one that we're opening is in Seattle, and we really want it to be an inspirational place where we can bring customers in, whether it's for training [or] giving them application ideas and new recipes.
Meeting bakers where they are with Inspiration Hubs
While Dawn Foods maintains an Innovation Studio at its headquarters in Michigan, the Inspiration Hubs are designed to meet customers in their local communities and provide a space to ideate around bakery innovation with Dawn Foods, Lapaugh said. The facilities are also equipped with baking equipment, including icing machines, fryers, and more, to prototype and test products, she added.
Dawn Foods is also planning to open more of these smaller hubs throughout the US and Canada, identifying “markets where there's a big need,” she said.
“The plan is in 2024, hopefully, we can open up a couple more of them. We've been talking about different locations and still vetting through where those might be, but certainly want to make sure that geographically we're spreading them out, so they're not all on the same location, and we can reach a larger audience.”
The company is also factoring in how close these Inspiration Hubs will be in conjunction with their distribution centers, Lapaugh explained. By doing this, Dawn Foods can provide a convenient way for its customers to try and order Dawn Foods ingredients, she added.
“At this last grand opening, when customers attended, they could try lots of different products, ... [and] we made it so that if they saw something, loved it, wanted to buy the ingredients and take them home, they would pick the product right that day, and they could take it home, so they didn't have to go home and place an order.”
Donuts become a daily delight of choice
As Dawn Foods plans to open more Inspiration Hubs, the bakery space is seeing renewed interest, as consumers look for permissible indulgence or small sweet treats throughout their day, or what Dawn Foods calls daily delights, Lapaugh explained.
“Daily delights is this trend where we're seeing that people are really looking to give themselves a pat on their back. They are really focused on their mental health and wellness, not so much always just about cutting calories," she said. "Donuts are an easy, quick way for people to give themselves that little daily sweet treat, so we see that working really well.”
Donuts as a sweet baked good is on the rise and grew 26.9% in dollars and 8.2% in units for the 52 weeks ending July 30, 2023, according to Circana data. Consumers aren't only looking for a morning sweet treat instead of breakfast cereals, but they are starting to purchase donuts at different times of the day, Lapaugh said.
Bakers are facing some operational challenges as consumers look for donuts throughout the day, which Dawn Foods is addressing with its portfolio, she added.
“Traditionally, donuts, you come in you fry them really early in the morning, and you have what you have, and one of the things that we've been trying to partner with our customers on ... [is] ways to supplement. You can bring in frozen donuts that are ready to finish, so you're still getting a really high-quality product that you can pull out later in the day, and you're not having to turn that fryer back on and run those donuts again later in the day.”