Donuts Alone Do Not Make a Chain Grow
By George Anderson
Dunkin’ Donuts, says Nation’s Restaurant News QSR Newsletter, was reborn on April 10th when the fast food chain began the “most significant repositioning” in its 55 year history.
The chain is expanding its menu to include items such as panini sandwiches and snacks for dayparts other than breakfast. It is also expanding its successful beverage business to include more premium drinks, but at a lower price point than competitors such as Starbucks.
“There’s a huge daypart opportunity for us that we intend to capture,” said George Condos, Dunkin’ Donuts’ chief brand officer. “Our product line certainly would be appealing for busy consumers who are looking for a snack throughout the day. Sometimes that snack is a beverage, not a food item. A good example is smoothies.”
The typical Dunkin’ Donuts consumer, said Jeff Bonasia, senior vice president and group account director for the Hill, Holliday, the chain’s advertising agency, said, “The Dunkin’ customers are people who are busy and on the go and getting stuff done.”
These consumers come from a wide spread of demographic segments. It’s not unusual for corporate lawyers and construction workers to both go to Dunkin’ Donuts for their hot or cold coffee beverage.
Marketing consultant Laura Ries of Ries & Ries said that Dunkin’ Donuts is ready to fill a void in the market.
“There’s always an opportunity for a powerful No. 2 brand,” she said. “We don’t see that in terms of coffee shops. There’s Starbucks, and there’s nobody else.”
Ms. Ries said the key for Dunkin’ Donuts to be successful will be to avoid imitating Starbucks.
“Don’t put in music and couches, for God’s sake,” she said.
Dunkin’ Donuts’ Condos said there is little need for concern on that score. “We offer our customers an unpretentious place to get their coffee,” he said.
Moderator’s Comment: Dunkin’ Donuts is looking to triple its size within 10 years. What will it have to do to reach its goal?
George Condos believes Dunkin’ Donuts can reach its goal. “The biggest challenge” he said, “is communicating to consumers that we are a beverage-based business
more than we are a doughnut shop.” – George Anderson – Moderator