Dunkin Donuts: More Than Half of Sales From Coffee, Other Beverages

Image: Dunkin Donuts: More Than Half of Sales From Coffee, Other Beverages

Friday, 21 Jun 2013 09:53 AM

By Michael Mullins

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Dunkin Donuts' coffee and other drinks accounts for 58 percent of sales revenue among U.S. franchisee in 2012, reported the company that wants to rebrand itself more into a beverage retailers.

The revenue shift signifies a change in direction for the company which is traditionally known for its doughnuts and other sugary morning pastries.

Since 2006, Dunkin Donuts has made a concerted effort to become more of a beverage company, as illustrated by its then introduced slogan, "America Runs on Dunkin," noted Forbes magazine.

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In addition to being a cheaper good to produce, coffee allows Dunkin to compete with the caffeine-driven juggernaut Starbucks, offering a more common man and less expensive beverage alternative to the somewhat pricey and what many perceive to be elite coffee house from Seattle.

In a meeting with investors this week, Paul Carbone, Dunkin' Brands Chief Financial Officer, confirmed, "We are a beverage company."

Referring to the beloved mascot of Dunkin Donuts throughout the 1980s and 1990s, Carbone added, "Fred the Baker is not coming back."

During the investment meeting, Carbone further described the companies emerging business goals, calling beverages the "holy grail" for profitability, Forbes reports.

According to Carbone, Dunkin Donuts' highest margins in all its categories come from beverage sales.

In addition to shifting its marketing strategy from doughnuts to coffee, the company, which operates around 7,400 stores in the US, primarily in the northeast, will be expanding itself westward as it plans to compete further with Starbucks.

In his address, Carbone admitted one of the company's main goals as part of its westward expansion is to tap into the massive market in California.

Despite having aired coffee ads in California since 2010, Dunkin Donuts does not plan to open up its first store in the golden state until 2015.

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"By the time we’re in California, they’ll have seen five years of national media focused on beverages," Carbone said.

In spite of all the beverage talk, Dunkin Donuts hasn't entirely abandoned the doughnut side of its operation, having announced its soon to be released gluten-free pastries earlier this week.

And of course, who could forget the recently launched Dunkin Donuts' Doughnut Breakfast Sandwich – which comes with fried eggs and bacon between a split glazed doughnut.

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