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 increasing emphasis on coffee as well as other drinks, that make up 60 percent of the sales.
The 68-year-old chain has toyed with the idea for quite a while. In 2006, it released a new motto – “America runs using Dunkin’ – that didn’t mention doughnuts. Last fall, it tested the “Dunkin’” logo over a new store in Pasadena, Calif.; it offers put the name over a few other stores ever since then.
“Our new branding is actually a clear signal that there’s new things at dunkin donuts breakfast menu. It talks to the breadth in our offerings,” said David Hoffman, the CEO Dunkin’ Brands, the chain’s parent company, in a conference call with media.
The name change will officially take place in January, if it will begin appearing on napkins, boxes and signs at new and remodeled U.S. stores. The change will gradually be adopted as franchisees update their stores. It will probably be phased in overseas within the next year, the organization said. Dunkin’ Donuts has 12,500 restaurants worldwide.
The brand new logo will still have Dunkin’ Donuts’ familiar rounded font and orange-and-pink color scheme, in which the company provides since 1973. The Canton, Mass.-based company isn’t saying how much the change 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. In the second quarter of the year, the company 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 one of numerous things it’s doing to stay highly 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 complete name. Specific words are easier for people to remember and conjure emotional connections, she said. Having “Donuts” in the name is also easier for folks in overseas markets who may not know what “Dunkin’” means.
Messing with iconic brands could also have consequences. In 2016, fifteen years after replacing Kentucky Fried Chicken with KFC, the business needed to issue a press release to combat a web-based rumor it was compelled to change its name as it doesn’t serve real chicken. And IHOP faced some backlash earlier this season in the event it announced it absolutely was changing its name to IHOb to remind customers it serves burgers along with pancakes. That one had been a publicity stunt, nevertheless it annoyed some customers.
Dunkin’ Donuts’ Chief Marketing Officer Tony Weisman said the company has been doing plenty of testing and doesn’t expect any customer backlash from your decision. “The reaction continues to be overwhelmingly positive,” Weisman said. “It’s just likely to feel very familiar to people.” But Reis said even when doughnuts have fallen out of favor among a far more health-conscious client base, people already know Dunkin’ Donuts being a place where they are able to just get coffee and enjoy the doughnuts’ smell.
“There’s no problem with still having ‘Donuts’ in your name,” she said. “Long term it absolutely was helping them, giving them a brandname identity which was the opposite of Starbucks.”
Starbucks representatives were unavailable for comment Wednesday. Going up against Starbucks, whose business was modeled right after the espresso shops of Italy, could be a big challenge for Dunkin’, which always has become known more for the smooth coffees than 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 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 decline in traffic. The company is scheduled to report third-quarter results on Thursday.
Dunkin’ has lagged behind in espresso sales since the category took over as the fastest-growing kind of coffee in cafes in recent years. McDonald’s Corp. has a type of low-price espresso drinks, too. The brand new espresso beverages bdcovh be served at Dunkin’s a lot more than 9,200 U.S. stores in bright orange cups to tell apart them off their Dunkin’ drinks in white or clear cups.
The organization is investing $100 million inside the U.S. within the next year, over half of it in restaurant technology, including the espresso machines. Franchisees have committed even more money to the upgrades. Dunkin’ wouldn’t say just how much franchisees are contributing or how much the new machines cost. Company executives chose the Swiss-made machine that might be the new standard, following trips to Europe and repeated tests to have the extraction from the coffee beans just right.
“The new equipment in a few 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 how to hand-pull espresso shots, steam milk and blend the many drinks with various flavors. He said they are already drawing in new clients in Baltimore.