Dunkin’ is dropping the donuts – from its name, anyway. Doughnuts continue to be on the menu, but Dunkin’ Donuts is renaming itself Dunkin’ to reflect its rising focus on coffee as well as other drinks, which make up 60 percent of its sales.
The 68-year-old chain has toyed using the idea for a while. In 2006, it released a whole 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 place the name over a few other stores since then.
“Our new branding is really a clear signal that there’s something totally new at Dunkin Donuts. 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, 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 probably be phased in overseas on the next season, the company said. Dunkin’ Donuts has 12,500 restaurants worldwide.
The new logo will continue to 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 modification will cost.
Dunkin’ Donuts has always sold coffee, but hot breakfast sandwiches and specialty drinks such as the fruity Coolatta and Cold Brew iced coffee have become increasingly essential 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 just one of numerous 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 can 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 with the full name. Specific words are easier for individuals to consider and conjure emotional connections, she said. Having “Donuts” within the name is also easier for individuals in overseas markets who may well not know what “Dunkin’” means.
Messing with iconic brands could also have consequences. In 2016, 15 years after replacing Kentucky Fried Chicken with KFC, the organization needed to issue a press release to combat an internet rumor that it was forced to change its name because it doesn’t serve real chicken. And IHOP faced some backlash earlier this season when it announced it had been changing its name to IHOb to remind customers which it serves burgers in addition to pancakes. That a person had been a publicity stunt, but it annoyed some customers.
Dunkin’ Donuts’ Chief Marketing Officer Tony Weisman said the business has been doing lots of testing and doesn’t expect any customer backlash from your decision. “The reaction continues to be overwhelmingly positive,” Weisman said. “It’s just going to feel completely familiar to individuals.” But Reis said even when doughnuts have fallen from favor among a more health-conscious subscriber base, people already know Dunkin’ Donuts as a place where they are able to 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, offering them a brandname identity which was the exact 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 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 draw in new clients. Dunkin’s U.S. same-store sales grew 1.4% in 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 took over as the fastest-growing type of coffee in cafes lately. McDonald’s Corp. has a type 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 tell apart them using their company Dunkin’ drinks in white or clear cups.
The company is investing $100 million inside the U.S. within the next year, over half of this in restaurant technology, including the espresso machines. Franchisees have committed even more money for the upgrades. Dunkin’ wouldn’t say just how much franchisees are contributing or how much the new machines cost. Company executives select the Swiss-made machine which will be the new standard, following trips to Europe and repeated tests to get the extraction from its coffee beans perfect.
“The new equipment in certain 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 various drinks with different flavors. He explained they may be already drawing in new customers in Baltimore.