Business

Kane’s Donuts in Saugus widening its horizons

After 60 years, Saugus favorite heads to competitive Hub

Co-owner Paul Delios says he intends to open a few new shops in the coming years. His sister Maria runs the kitchen.

Suzanne Kreiter/Globe staff

Co-owner Paul Delios says he intends to open a few new shops in the coming years.

To many doughnut devotees, Kane’s Donuts of Saugus bakes the fine French wine of guilty confections. The family-owned store has sold its products out of just one location for all of its 60 years, a low-key operation in a converted house.

That’s about to change. Not only is Kane’s preparing to expand, but it will make the move in the heart of downtown Boston, where competition is as rich as a jelly-filled doughnut.

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A second Kane’s shop, dubbed Kane’s Handcrafted Donuts, will open in Boston’s International Place this fall. The doughnuts will be hand-rolled, cut, and baked at the original location in Saugus, then pumped with fillings and dipped with finishes such as chocolate ganache, prepared to order, at the new Financial District shop.

Gourmet doughnuts look to be in the early stages of a popular renaissance across the country, much the way cupcakes caught on a few years ago. Independent shops — The Holy Donut in Portland, Maine, and Union Square Donuts in Somerville among them — appear wildly popular with customers.

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“Upscale doughnuts seem to be taking off,” said Darren Tristano, executive vice president of the food business research firm Technomic. “It’s familiar, less expensive, and a natural transition from cupcakes because consumers can’t make doughnuts at home as easily as they can make cupcakes. The creativity, coolness, and hipness are there.”

Kane’s doughnuts are known for their flavor and sheer size — about double the weight of some competitors. Bon Appétit, the magazine for sophisticated palates, rated Kane’s among the nation’s top shops. Travel and Leisure also put Kane’s on its list of America’s premier doughnut makers. Customers are waiting outside when the store opens at 3:30 a.m.

“It was like a doughnut on steroids compared to Dunkin’,” said customer Pete Walsh of Revere, recalling the first time he tasted one from Kane’s. “It blew me away.”

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The Kane’s doughnuts are full of local ingredients, baked with flour from Andover, eggs from Peabody, and blueberries from Maine. Every product, from signature honey-dipped doughnuts to massive coffee rolls, is made by hand in a process that takes several hours.

The Kane’s crème brûlée doughnut, for example, is pumped with a homemade custard filling, dipped in a honey glaze and then in fine sugar, and finally torched.

How many calories does one of them pack? The owners of Kane’s say they don’t know exactly. They go for $1.75 each, or $15.95 per dozen. Dunkin’ Donuts sells its doughnuts for 95 cents each, or $6.99 per dozen. Kane’s Donuts in Boston will cost about $3.50 — due to the use of more gourmet ingredients.

Paul Delios, the president and co-owner of the business, said his family intends to open a couple of new shops over the next few years, starting with the International Place store by mid-November.

“We aren’t trying to be a Dunkin’ Donuts,” he said. “We want to keep the capacity to what we can handle in the kitchen now and not shoot our foot off trying to grow and become the next doughnut giant. A couple special locations will be good enough.”

Kane’s first opened its doors in Saugus just five years after the debut of the original Dunkin’ Donuts shop in Quincy. Over the decades, Dunkin’ grew into a corporate giant with nearly 11,000 stores around the world, while Kane’s became famous in doughnut circles from its single shop.

Today, Kane’s competes with 10 Dunkin’ locations in Saugus alone. There are 17 Dunkin’ locations within a half-mile of Kane’s new downtown location.

Kane’s faced a different kind of competition when Krispy Kreme arrived in Saugus a decade ago. That store created a lot of initial excitement, but it closed down about a year and a half later. Paul Delios said Krispy Kreme had no impact on his store’s sales.

The North Shore institution was founded by Bob and June Kane in 1955. The Kanes ran the business for decades. Peter and Kay Delios bought the business in 1988, changing the menu to feature their own recipes and eventually passing the store down to their five children, including Paul Delios, in 2006.

Four years later, the Saugus store was renovated to add 1,500 square feet. Paul Delios describes it as taking care of the “mother store” in preparation for regional expansion. Kitchen space was added to make more doughnuts, and the parking lot was expanded.

When they were ready to open new stores, family members decided to work with three local investors they had known for years.

“We weren’t looking for just anybody,” said Maria Delios, Paul’s sister, who runs the kitchen. “Everything we do here comes from our heart, and we wanted people who would be involved and put their heart into it.”

Investor Greg John, the cofounder of a Boston marketing firm, jokes that he put money into Kane’s so he could skip the weekend lines outside the Saugus shop. He scouted potential locations for about nine months before approaching the Chiofaro Co., a client and the developer of International Place.

At first, founder Donald J. Chiofaro and his son, Donald. Jr., director of leasing and development at International Place, balked at the idea of a doughnut shop among the marble columns and floor-to-ceiling waterfall in their opulent office tower. And there’s already a Dunkin’ Donuts across the street. Then Delios sent them three dozen doughnuts.

“It wasn’t something that I felt we needed or would be a meaningful addition to the building,” said Donald Chiofaro Jr. “Then they sent these doughnuts, and let me tell you these are not your average doughnuts. They are far more decadent and unique, and I knew what all the fuss was about on the North Shore.”

Paul Delios said he wanted to expand locally to continue to control the business. The family will be the majority owners of the new shop.

“Being able to maintain the same quality and integrity that was instilled in us from when were kids is something that is paramount if we’re going to grow in the right now,” he said.

Now the Delios family is trying to come up with unique fillings and finishings to debut in the Boston store. They’ve tested several flavors, including a jalapeno and cheddar doughnut and Nutella doughnut.

A few ideas way outside the box? Doughnuts infused with ice cream or cut open like a bun and stuffed with pulled pork and mango salsa.

Although they declined to provide sales figures, the Delios family say they bake thousands of doughnuts every day. Maria Delios arrives at 9 p.m. each evening to begin cooking and opens the shop to the public at 3:30 a.m.

“We’re already making something special outside of Boston,” Paul Delios said. “Now we want to bring it right to the heart of the city.

Taryn Luna can be reached at taryn.luna@globe.com. Follow her on Twitter @TarynLuna.
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