Carol Johnson, Southern Indiana Business Report
SALEM – An old doughnut cutter from the early days of H&R Bakery sits on a shelf in the bakery kitchen. It’s been years since the hand cutter was used, but it still smells of cinnamon and sugar and serves as a reminder of the bakery’s beginnings.
Dwayne Daugherty chuckles now at how fast he got at using the tool, cutting each doughnut individually after rolling out the dough by hand with a rolling pin – he still has that, too. Dwayne and his wife Juanita have owned the Salem bakery since 2000 and over time have made significant investments to improve efficiency and grow the business while still maintaining the quality that has made their doughnuts and pastries the sweet treat of choice for customers in the Salem area and beyond for more than 75 years.
These days a reversible sheeter machine can cut 30 doughnuts at a time from the sheet of dough. H&R Bakery, a Salem staple since 1946, makes its doughnuts daily from scratch, using the same recipe handed down by the original owners, Harry and Rowena Misamore.
Making fresh doughnuts and pastries for H&R customers to enjoy with their morning coffee starts the night before, said Juanita.
A crew of five production employees works from 8 p.m. until 5 a.m. The large cases are filled with 30 varieties of fresh product each day by 3 a.m. Product that’s not stocked in the retail bakery is delivered to five other locations including Huckleberry’s in Mitchell, also owned by the Daughertys, and convenience stores in Orleans, Salem and Campbellsburg.
When the Daughertys bought H&R from previous owners Robert and Lula Misamore, the bakery was located on Walnut Street, not far from its current location on the Salem square. It was a small shop, just 700 square feet.
The decision to buy H&R stemmed from Juanita’s interest in owning a local business. Dwayne was employed at an HVAC company in New Albany and planned to keep that job while Juanita ran the bakery.
“That didn’t last very long,” he said with a laugh.
“It was like jumping on a bucking bronco,” said Juanita of those early days of working in the bakery.
Soon Dwayne joined Juanita in the business and the two have been working side by side ever since.
The couple describe themselves as hands-on owners who enjoy working. In the beginning, work weeks of 70 hours were the norm as they learned the business and planned for its future.
At times, Juanita, rather than go home to take a break, would take a nap on a bag of flour.
New location, expanded menu
One of the first things they did was buy a local coffee shop’s equipment to add coffee and coffee drinks to the menu. They also began adding more varieties of doughnuts, growing the expansive pastry case from 10 varieties to 20 and later to the current 30 varieties.
In 2019, the Daughertys made their boldest move yet, moving into a downtown building that would increase their visibility and capacity. The move took H&R Bakery from the 700 square foot shop in the old bakery to the current 7,000 square feet.
The couple spent about 18 months renovating the space. Juanita designed the new bakery to have comfortable seating for customers looking for a place to have a meet-up or catch up on emails. Vintage-inspired pendant lights hang from the original pressed tin ceiling. Floor to ceiling windows face the square, giving customers a bird’s eye view of downtown Salem while warmed by the midday sun.
Juanita designed a large train display case for Dwayne’s train layout that customers can turn on with a quarter placed into a machine.
“We designed it to be a meeting place where our customers would feel comfortable to sit and talk or just enjoy watching the activity around the square,” Dwayne said.
With the new building, the couple expanded the menu to include fountain drinks and ice cream. A meeting room in the back can be rented for meetings and downstairs is a party room.
Bakery looking for new owner
After 25 years of ownership, the Daughertys are looking for new owners. Now in their early 60s, the couple plans to retire in the summer of 2026. It’s not a decision they made lightly.
“This has been our family,” Dwayne said. “Our employees tend to be young and they come to us with problems or asking for advice … it’s like having 18 kids,” he said with a laugh. “But it’s time to relax and reap the rewards.”
Dwayne recalled a customer who stopped in one day on his way to the hospital – his wife was in the care and in labor.
“All these years later, their baby is 25 now and is a customer,” he said.
Owning a business that goes back nearly 80 years feels more like being caretakers than owners, Dwayne said.
“We want to see the business go on and to see it continue with new owners,” Dwayne said.