The
Business Case for Holtsman’s Donuts is a strong one. They have long been respected in the
Cincinnati confectionery industry as trendsetters that offer unique flavor
experiences, with the highest quality, and at a reasonable (impulse buy level)
price. The small food shop model is
certainly not a new one, but Holtsman’s business model receives added
robustness as they have successfully been able to move up-market with wildly
delicious varieties, and that move comes with minimal increases in marginal
costs as their raw materials are incredibly inexpensive. It is estimated that the average donut costs
just $0.12 to make, which leaves significant room to cover the fixed costs,
while still protecting a significant margin.
In
addition, Holtsman’s has established themselves as “the” place to get donuts in
Cincinnati. They have done so through a
wide social media presence which encourages customers to post pictures and brag
about their latest purchase. Holtsman’s also announces exclusive “one-off”
donuts on social media each morning which drives unplanned stops. All of their
donuts are made right in the store, including the icing and the fillings, which
is a huge eye catcher in areas with high foot traffic. Being a breakfast spot, they have integrated
locally roasted coffee, which also has a very small marginal cost, providing
strong margins. Recently, Holtsman’s has
expanded their brand into the “lifestyle” space offering comfortable stores,
and long hours (open until late in the evening most days) that encourage
customers to stay for a while.
The
Holtsman’s Donuts value proposition is quite high. The management team leverages their strong
product in unique ways that continues to delight consumers.
http://www.holtmansdonutshop.com/
http://yourbusiness.azcentral.com/can-money-made-donut-business-14915.html
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