Dunkin’ is dropping the donuts – from its name, anyway. Doughnuts are still on the menu, but Dunkin’ Donuts is renaming itself Dunkin’ to reflect its rising emphasis on coffee as well as other drinks, that make up 60 % of its sales.
The 68-year-old chain has toyed with the idea for quite a while. In 2006, it released a new motto – “America operates on Dunkin’ – that didn’t mention doughnuts. Last fall, it tested the “Dunkin’” logo on a new store in Pasadena, Calif.; it provides position the name over a few other stores since that time.
“Our new branding is a clear signal that there’s something new at Dunkin Doughnuts menu. It speaks to the breadth of our own offerings,” said David Hoffman, the CEO Dunkin’ Brands, the chain’s parent company, in a conference call with media.
The name change will officially occur in January, when it will start appearing on napkins, boxes and signs at new and remodeled U.S. stores. The alteration will gradually be adopted as franchisees update their stores. It will likely be phased in overseas over the next year, the business said. Dunkin’ Donuts has 12,500 restaurants worldwide.
The brand new logo will continue to have Dunkin’ Donuts’ familiar rounded font and orange-and-pink color scheme, that the company has utilized since 1973. The Canton, Mass.-based company isn’t saying how much the modification will cost.
Dunkin’ Donuts has always sold coffee, but hot breakfast sandwiches and specialty drinks like the fruity Coolatta and Cold Brew iced coffee are becoming increasingly important to the chain. In the second quarter with this year, the business noted that overall U.S. store traffic was down, but revenue was up because of sales of higher-margin iced coffee drinks and breakfast sandwiches.
Dunkin’ says the name change is among a number of things it’s doing to remain highly relevant to younger customers. It’s also simplifying its menu and adding dedicated mobile ordering lanes. But changing the name of iconic brands can be quite a big mistake, says Laura Ries, an Atlanta-based marketing consultant.
Ries says “Dunkin’” eventually won’t mean something to younger customers who haven’t evolved with the complete name. Specific words are easier for individuals to remember and conjure emotional connections, she said. Having “Donuts” in the name can also be easier for folks in overseas markets who might not understand what “Dunkin’” means.
Messing with iconic brands may also have consequences. In 2016, 15 years after replacing Kentucky Fried Chicken with KFC, the company were required to issue a press release to combat a web-based rumor that it was forced to change its name as it doesn’t serve real chicken. And IHOP faced some backlash earlier this season when it announced it was changing its name to IHOb to remind customers it serves burgers along with pancakes. That a person was a publicity stunt, nevertheless it annoyed some customers.
Dunkin’ Donuts’ Chief Marketing Officer Tony Weisman said the organization did plenty of testing and doesn’t expect any customer backlash through the decision. “The reaction has been overwhelmingly positive,” Weisman said. “It’s just planning to feel very familiar to people.” But Reis said even when doughnuts have fallen out of favor among a far more health-conscious subscriber base, people already know Dunkin’ Donuts as being a place where they could just get coffee and relish the doughnuts’ smell.
“There’s no problem with still having ‘Donuts’ within your name,” she said. “Long term it was helping them, providing them with a brandname identity which was the contrary of Starbucks.”
Starbucks representatives were unavailable for comment Wednesday. Going up against Starbucks, whose business was modeled following the espresso shops of Italy, might be a big challenge for Dunkin’, which always has become known more because of its smooth coffees than a bold drink like espresso.
Dunkin’ has been remodeling its stores with cold-brew taps and drive-through lanes for mobile orders. Like Starbucks, the chain has struggled to draw in new customers. Dunkin’s U.S. same-store sales grew 1.4% inside the second quarter, as an increase in average check offset a decrease in traffic. The organization is scheduled to report third-quarter results on Thursday.
Dunkin’ has lagged behind in espresso sales as the category became the fastest-growing kind of coffee in cafes recently. McDonald’s Corp. features a type of low-price espresso drinks, too. The new espresso beverages bdcovh be served at Dunkin’s a lot more than 9,200 U.S. stores in bright orange cups to distinguish them off their Dunkin’ drinks in white or clear cups.
The organization is investing $100 million in the U.S. over the following year, over fifty percent of this in restaurant technology, like the espresso machines. Franchisees have committed even more money to the upgrades. Dunkin’ wouldn’t say exactly how much franchisees are contributing or exactly how much the brand new machines cost. Company executives select the Swiss-made machine that will be the newest standard, following trips to Europe and repeated tests to get the extraction from the coffee beans perfect.
“The new equipment in a few ways is faster compared to old equipment,” said Scott Murphy, chief operating officer of Dunkin’ U.S. Parag Patel, a franchisee who owns 25 Dunkin’ shops in Baltimore and five in California, spent months teaching his employees the best way to hand-pull espresso shots, steam milk and blend the many drinks with assorted flavors. He stated these are already drawing in new customers in Baltimore.