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 and other drinks, that make up 60 percent of the sales.
The 68-year-old chain has toyed using the idea for a while. In 2006, it released a brand new motto – “America operates on Dunkin’ – that didn’t mention doughnuts. Last fall, it tested the “Dunkin’” logo over a new store in Pasadena, Calif.; it provides put the name on the few other stores since then.
“Our new branding is really a clear signal that there’s something new at Dunkin Donuts. It talks to the breadth of 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, in the event 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 within the next year, the business said. Dunkin’ Donuts has 12,500 restaurants worldwide.
The newest logo will have Dunkin’ Donuts’ familiar rounded font and orange-and-pink color scheme, which the company has used since 1973. The Canton, Mass.-based company isn’t saying just how much the change will cost.
Dunkin’ Donuts has always sold coffee, but hot breakfast sandwiches and specialty drinks like the fruity Coolatta and Cold Brew iced coffee have become increasingly important to the chain. Within the second quarter of the year, the business noted that overall U.S. store traffic was down, but revenue was up thanks to sales of higher-margin iced coffee drinks and breakfast sandwiches.
Dunkin’ says the name change is just one of several things it’s doing to stay 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 grown up with the complete name. Specific words are easier for individuals to keep in mind and conjure emotional connections, she said. Having “Donuts” in the name can also be easier for people in overseas markets who may well not really know what “Dunkin’” means.
Messing with iconic brands may also have consequences. In 2016, fifteen years after replacing Kentucky Fried Chicken with KFC, the business were required to issue a press release to combat an internet rumor that it was compelled to change its name because it doesn’t serve real chicken. And IHOP faced some backlash earlier this summer when it announced it was changing its name to IHOb to remind customers which it serves burgers along with pancakes. That certain was actually a publicity stunt, but it annoyed some customers.
Dunkin’ Donuts’ Chief Marketing Officer Tony Weisman said the company has done a lot of testing and doesn’t expect any customer backlash from your decision. “The reaction has become overwhelmingly positive,” Weisman said. “It’s just likely to feel totally familiar to folks.” But Reis said even if doughnuts have fallen out of favor among a much more health-conscious subscriber base, people already know Dunkin’ Donuts being a place where they could just get coffee and like the doughnuts’ smell.
“There’s nothing wrong with still having ‘Donuts’ inside your name,” she said. “Long term it had been 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, might be a big challenge for Dunkin’, which always has been known more because of its smooth coffees when compared to a bold drink like espresso.
Dunkin’ has become remodeling its stores with cold-brew taps and drive-through lanes for mobile orders. Like Starbucks, the chain has struggled to draw in new clients. Dunkin’s U.S. same-store sales grew 1.4% inside 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 type of coffee in cafes recently. McDonald’s Corp. features a line of low-price espresso drinks, too. The brand new espresso beverages bdcovh be served at Dunkin’s greater than 9,200 U.S. stores in bright orange cups to tell apart them using their company Dunkin’ drinks in white or clear cups.
The business is investing $100 million inside the U.S. within the next year, more than half of it in restaurant technology, such as the espresso machines. Franchisees have committed much more money to the upgrades. Dunkin’ wouldn’t say exactly how much franchisees are contributing or how much the newest machines cost. Company executives select the Swiss-made machine that might be the new standard, following trips to Europe and repeated tests to have the extraction from its coffee beans perfect.
“The new equipment in a few ways is faster than 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 you can hand-pull espresso shots, steam milk and blend the different drinks with various flavors. He said they are already drawing in new customers in Baltimore.