Dunkin Donuts Conundrum

Sure changing the name of your company can imply customer relevance just look with it did for Kentucky Fried Chicken when they converted to KFC 10 years of stagnation and capitulation of market share according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®. So the questions becomes can a name change from Dunkin Donuts to Dunkin drive growth or is this another case of political correctness gone awry?

Dunkin’s morning business accounts for about 60 percent of system-wide sales. That segment has reported positive for Dunkin year-over-year and increased sequentially each quarter in 2017. While industry insiders have known that Dunkin sells more beverages than Donuts and sandwiches in the minds-eye of the consumer that donut and coffee in the morning is still top of mind according to our Grocerant ScoreCards conducted by the team at Foodservice Solutions®.

The team at Foodservice Solutions® reminds us that consumers are dynamic not static and chain restaurants must be dynamic as well. When Dunkin announced several new goals to drive growth our team asked to those goals look more like yesterday marketing tactics than tomorrow’s customer relevant strategy?     Dunkin where is your new electricity coming from to fuel customer relevance? 

Let’s take a look at what they announced and you let me know yesterday or tomorrow? Here’s:

1.       Dunkin’ Deals: These are a series of value offers expected to go live at participating restaurants throughout the year. The first (active until February 25) includes two Egg and Cheese Wake-up Wrap Sandwiches for $2, and, to drive afternoon traffic specifically, a medium hot or iced latte for $2 from 2 to 6 p.m.

2.       Beverage changes: Dunkin’ is extending its premium tea and frozen beverage lines, as well as introducing more espresso products. Dunkin’ said it will focus on Cold Brew, Iced Coffee, and Frozen Dunkin’ Coffee. The brand posted its highest quarter beverage comparable sales of the year in the fourth quarter.

3.       New breakfast sandwiches: As mentioned earlier, breakfast sandwiches boomed for Dunkin’ in 2017. Now, Dunkin’ will bring back old favorites, like the Sweet Black Pepper Bacon Breakfast Sandwich, and offer additional flavored bacon on sandwiches throughout the year.

4.       DD Perks Loyalty: Dunkin’ added more than 2 million members to its loyalty program in 2017, bringing the total membership to about 8 million. On-the-go mobile ordering, a perk available only to rewards members, returned a retrial rate of 80 percent.

5.       Tender agnostic test: In the second half of 2018, Dunkin’ said it will test “tender agnostic” participation in its loyalty program. This means members can earn points using all forms of tender, including their DD card, credit, debit or cash.

6.       Delivery and catering: Dunkin’ is testing a newly built digital catering platform in several key markets this year. The brand said it also expects to continue testing and expanding third-party delivery options with the goal of creating a combined platform in 2019.

7.       Drive-thru improvements: Dunkin, noted earlier, sees more than 75 percent of new restaurants moving forward to feature a drive-thru lane. The NextGen design, which debuted January in Quincy, Massachusetts, features a drive-thru lane dedicated exclusively to mobile ordering and allows Perks members who order ahead to bypass the ordering lane and merge straight into the line for the pickup window. Dunkin’ said, on average, drive-thru locations boast 40 percent higher sales volume throughout the system.

8.       Speaking of the NextGen Store: Dunkin’ new design, also 25 percent more energy efficient, also includes a beverage bar tap system that can pour cold beverages such as nitro coffee. There are grab-and-go snacks, new uniforms, and yes, the innovative double drive thru. Expect about 50 of these to hit the landscape by the end of the year.

9.       Packaged growth: Dunkin’ has expanded its consumer packaged goods business from about $400 million in retail sales to $900 million in the past three years. Ready-to-drink bottled iced coffee business exceeded $150 million within the first year of launching.

Success does leave clues and its clear to the team at Foodservice Solutions® incrementalism just might be the best way to describe tactics of yesterday. In 2018 brand protectionism does not serve the consumer, the brand or your franchisees.

Are you trapped doing what you have always done and doing it the same way?  Interested in learning how www.FoodserviceSolutions.us can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit:  www.FoodserviceSolutions.us for more information.