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 focus on coffee as well as other drinks, that make up 60 percent of their sales.
The 68-year-old chain has toyed with all the idea for a while. In 2006, it released a whole new motto – “America runs on Dunkin’ – that didn’t mention doughnuts. Last fall, it tested the “Dunkin’” logo over a new store in Pasadena, Calif.; it has position the name on the few other stores since that time.
“Our new branding is actually a clear signal that there’s new things at dunkin donuts menu prices. It talks 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, if it begins 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 within the the coming year, the organization said. Dunkin’ Donuts has 12,500 restaurants worldwide.
The newest logo will have Dunkin’ Donuts’ familiar rounded font and orange-and-pink color scheme, in which the company has used since 1973. The Canton, Mass.-based company isn’t saying how much the modification will surely cost.
Dunkin’ Donuts has always sold coffee, but hot breakfast sandwiches and specialty drinks just like the fruity Coolatta and Cold Brew iced coffee have grown to be increasingly important to the chain. Inside the second quarter with this year, the organization noted that overall U.S. store traffic was down, but revenue was up due to sales of higher-margin iced coffee drinks and breakfast sandwiches.
Dunkin’ says the name change is just one of numerous things it’s doing to keep relevant to younger customers. It’s also simplifying its menu and adding dedicated mobile ordering lanes. But changing the name of iconic brands could be a big mistake, says Laura Ries, an Atlanta-based marketing consultant.
Ries says “Dunkin’” eventually won’t mean almost anything to younger customers who haven’t evolved using the full name. Specific words are easier for folks to remember and conjure emotional connections, she said. Having “Donuts” inside the name is additionally easier for individuals in overseas markets who might not understand what “Dunkin’” means.
Messing with iconic brands may also have consequences. In 2016, fifteen years after replacing Kentucky Fried Chicken with KFC, the company needed to issue a press release to combat a web-based rumor it was compelled to change its name because it doesn’t serve real chicken. And IHOP faced some backlash earlier this season in the event it announced it was changing its name to IHOb to remind customers that it serves burgers as well as pancakes. That one 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 from the decision. “The reaction continues to be overwhelmingly positive,” Weisman said. “It’s just planning to feel totally familiar to individuals.” But Reis said even though doughnuts have fallen from favor among a far more health-conscious client base, people already know Dunkin’ Donuts as being a place where they can just get coffee and like the doughnuts’ smell.
“There’s nothing wrong with still having ‘Donuts’ in your name,” she said. “Long term it was helping them, providing them with a brand name identity that was the exact opposite of Starbucks.”
Starbucks representatives were unavailable for comment Wednesday. Going up against Starbucks, whose business was modeled following the espresso shops of Italy, can be quite a big challenge for Dunkin’, which always has been known more for the smooth coffees compared to a bold drink like espresso.
Dunkin’ continues to be remodeling its stores with cold-brew taps and drive-through lanes for mobile orders. Like Starbucks, the chain has struggled to bring in new business. Dunkin’s U.S. same-store sales grew 1.4% in the second quarter, as a rise in average check offset a decline in traffic. The organization is scheduled to report third-quarter results on Thursday.
Dunkin’ has lagged behind in espresso sales because the category had become the fastest-growing kind of coffee in cafes in recent years. McDonald’s Corp. has a collection of low-price espresso drinks, too. The newest espresso beverages bdcovh be served at Dunkin’s more than 9,200 U.S. stores in bright orange cups to differentiate them using their company Dunkin’ drinks in white or clear cups.
The organization is investing $100 million inside the U.S. in the next year, more than half from it 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 new machines cost. Company executives select the Swiss-made machine that might be the new standard, following trips to Europe and repeated tests to obtain the extraction looking at the coffee beans perfect.
“The new equipment in certain ways is faster compared to the 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 various drinks with assorted flavors. He said they may be already drawing in new customers in Baltimore.