Banjo’s Bakery Cafe bets on global doughnut rush
The company will open its 52nd bakery in Warragul, Victoria, in June.
Banjo’s Bakery Cafe is riding the wave of a global doughnut boom with the rollout of about nine flavours across all outlets, amidst growing urbanisation and an increasing snacking trend.
“Doughnuts are something that has been trending and growing significantly in the US and [in the Asia-Pacific region],” Bradley Saxby, acting CEO at the Aussie bakery chain, told QSR Media. “So we entered that market and launched a full doughnut range in all locations last month, and we are seeing fantastic results.”
Saxby said doughnuts are baked fresh on-site every day, with each of their 51 stores having its own production area at the back of the bakery.
The global doughnut market is projected to grow 3.3% annually to $29.2b (US$18.8b) by 2033 from 2023, according to Allied Market Research.
Banjo's was founded by Saxby’s father, Mark, in Tasmania in 1984 to give customers a place where they can sit down and enjoy freshly baked breads and cakes. It also serves muffins, pies, and sandwiches, as well as hot and cold coffee and tea.
To prepare for the launch of the new menu, Banjo’s spent two years researching to build the backend and other equipment needed to bake doughnuts on-site. They spent another one and a half years developing the baking processes.
“The biggest hurdle we had was getting the machines,” Saxby said. They had the doughnut machines manufactured in Germany and delivered to their bakeries, which took about 18 months to complete, he pointed out.
There was little to no pushback from franchisees when they proposed the new product lineup in 2023, with most of them seeing it as an opportunity to boost sales.
The flavours were created at Banjo’s Bakery Cafe’s Resource Centre, a hub for franchisee support that provides training in baking, sales, and administration. It also has an on-site bakery where the doughnuts’ flavours were created, with staff doing the initial taste-test.
After that, the doughnuts were soft-launched in their special research and development bakery facility in Tasmania for customers to try, whilst they determined which flavours were a hit. The doughnuts were then trialled amongst a small number of franchise stores before being pushed across all sites.
As a result of this rigorous vetting process, Banjo’s revenue rose more than 10% last year from a year earlier, whilst customers increased to nine million from eight million, Saxby said.
The company will open its 52nd bakery in Warragul, Victoria, by June, he said. He expects to hit 54 stores by year-end and 60 by next year. “Our goal is to hit 100 sites by 2030.”
Most of these will be drive-thrus, which Banjo’s will be pushing across Queensland and New South Wales in the next 12 months.
“We are seeing a significant uptick in sales from drive-thru formats, at least drive-thru standalone sites, which are performing at least 20% more in terms of total revenue,” Saxby said.
