Dunkin Donuts
Dunkin’ Brands Group, Inc., 2015
www.dunkinbrands.com , DNKN
Headquartered in Canton, Massachusetts, Dunkin’ Brands (Dunkin’) sells hot and cold coffee and baked goods, as well as hard-serve ice cream, using a near-100 percent franchised business model. With 11,300 Dunkin’ Donuts restaurants in 40 states and 32 foreign countries, and 7,500 Baskin-Robbins restaurants in 43 states and 46 foreign countries, Dunkin’ is one of the world’s largest franchisors of quick-service restaurants (QSR). All but 36 Dunkin’ Donuts and Baskin-Robbins are franchisee-owned. In the last few years, more and more customers are coming into Dunkin’ restaurants and spending more and more money when they are there. About 70 percent of all Dunkin’ stores have a drive thru, which caters to consumers in a hurry. Dunkin’ is a speed leader among QSR, even given increased ticket volume and menu complexity.
Dunkin’ recently launched a loyalty and rewards program that enables the company to collect data from customers to determine their habits. For example, if you normally visit Dunkin’ Donuts in the morning, the firm may soon send you offers to purchase some donuts in the afternoon or evening. Companies increasingly are using business analytics to make strategic decisions. Major rival firms in the coffee retailing business include Starbucks, Krispy Kreme Doughnuts, and Tim Hortons. Dunkin’ especially caters to the on-the-go consumer looking for a quick coffee and breakfast. One potential weakness for Dunkin’ is that the firm does not offer many healthy food options for health-conscious customers. Coffee prices rose 50 percent in 2014 due to drought conditions in South America, especially since Brazil endured its worst drought in decades. The 2014 coffee harvest in Brazil was the lowest in three years. To take up the slack, Colombia, the world’s number-two Arabica grower, was increasing production, but Colombia only produces about one quarter as much coffee as Brazil. Dunkin’ Brands is performing quite well. In mid-2015, Dunkin’ announced agreements with seven franchise groups to open 51 new restaurants in Virginia and West Virginia over the next several years. Of the seven groups, only one is a new franchisee while the rest are existing franchisees/franchise groups. For Q1 of 2015, the company’s revenues increased 8.1 percent year-over-year to $185.9 million, driven partly by revenue from the Dunkin’ K-Cup pack licensing agreement with Keurig Green Mountain, Inc
Dunkin’ Donuts Bill Rosenberg opened his first donut restaurant, Kettle Donuts, in 1948, in Quincy, Massachusetts. The name changed to Dunkin’ Donuts in 1950. Rosenberg sold franchisees to others as early as 1955. The 100th restaurant opened in 1963, the 1,000th in 1979, and the 3,000th in 1992. In 1996, bagels were introduced to the Dunkin’ Donuts menu and breakfast sandwiches the following year. In 2013, Dunkin’ Donuts received the No. 1 ranking for customer loyalty in the coffee category by Brand Keys for eight years running, and was rated by CREST in December 2013 as number-one in iced regular/decaf/flavored coffee, number-one in hot regular/decaf/flavored coffee, number-one in donut category, and number-one in bagel and muffin category. The following year, Dunkin’ Donuts reentered the United Kingdom, 20 years after it exited the country, with its first store opening in Harrow, London. In Canada, Dunkin’ Donuts has lost a substantial percent of its market share in recent years, and now has only five restaurants, all in Quebec. Dunkin’s Canadian decline is largely due to rival donut firm Tim Hortons.