The Dunkin’ Donuts Identity Crisis

Dunkin' Donuts

Bloomberg reported, on July 21, 2016, that Dunkin’ Donuts is having an identity crisis due to a stormy political atmosphere and minimum wages rising. These things are hampering the companies’ ability in a setting the number of locations they will be opening in 2017.

Dunkin’ Donuts’ slowing stock started in February 2016, in its first year-over-year quarterly sales decline since it went public in 2011. It has been on a steady decline since and recently fell to 16 percent. In comparison to its competitors, S&P 500 and Starbucks, who have had a 2 percent gain. The company is struggling with its identity, during a time when it is trying to open over 400 U.S. restaurants.

Dunkin’ Donuts does not operate many of its own stores and relies greatly on whether current or potential franchisees are excited enough to open other locations in order to grow. To keep in good graces with the possible owners, Dunkin’ Donuts must voice that opening other locations are a sound investment. This means keeping up both their sales and profits, as well as the company having a long-term vision.

The identity crisis for the company not only centers around politics and minimum wages rising, it also is mimicking the coffee giant, Starbucks with new items on its menu like espresso, Rainforest Alliance Certified coffee beans, and cold brew coffees. A Wall Street analyst and CEO, Nigel Travis, said during a Dunkin’ Donuts earnings call, on July 21, 2016: “Just what would the tagline be to the customer?” Since the higher end coffees emulate those of Starbucks, he suggested the new motto could be: “Starbucks quality at Dunkin’ Donuts prices.” The question was answered by a senior marketing executive who responded by saying that they are, “trying to be the best Dunkin’ possible.”

According to CDA News, the Dunkin’ Donuts identity crisis seems to have gone a bit further with new food menu items. The coffee company is trying to keep up with both McDonald’s and Taco Bell when it comes to their fast food breakfast menu. The most talked about item is the egg, and the company wants to create a better tasting menu option than McDonald’s. Since the introduction of its rival companies’ all day breakfast menu, boosting its sales 5.4 percent. Dunkin’ Donuts has decided it is time to follow suit.

“People” has done an inclusive analysis, comparing the ingredients of Dunkin’ Donuts’ eggs with those of McDonald’s, Chick-Fil-A, Burger King, Subway, and Taco Bell. They found that in comparison, Dunkin’s eggs had a total of 12 ingredients. The question is, How does an egg with 12 ingredients, including natural sauteed flavor, artificial butter flavor, xantham gum, citric acid, egg yolks, water, egg whites, salt, modified cornstarch, and black pepper, taste better?

Though the list may seem long and scary, the competitors’ eggs have around eight ingredients, such as xantham gum, cornstarch, and citric acid. These additions are used to thicken and stabilize a lot of foods and are not considered harmful. The ingredients to look out for, according to “People,” are the natural sautéed flavor and the artificial butter flavor.

While all the listed competitors of Dunkin’ Donuts have some of the same ingredients, like salt and citric acid, most of them do not include natural sautéed flavor or artificial butter flavor in them. Most people may only want eggs to be the main ingredient of their breakfast sandwich, but if so, they may want to make them at home.

By Tracy Blake

Sources:

CDA News: Dunkin’ Donuts Takes on Fast Food Breakfast Giants
Bloomberg: Dunkin’ Donuts Is Losing Its Identity
People: Dunkin’ Donuts Eggs Contain Over a Dozen Ingredients — How Does That Compare to Other Fast Food Breakfasts?

Image Courtesy of Jordi Bufi Caballero’s Flickr Page – Creative Commons License

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