Dunkin’ dumps ‘Donuts’ for coffee: A healthy move?
The lengths companies go through to build a brand name are truly unfathomable. Some, like Graviky Labs, turned pollution into usable ink for artists. Others, like UberPOOL, utilized drones in Mexico City to entertain commuters stuck in traffic. Some, like Belgian TV channel TNT, orchestrated an entire action scene stunt in the middle of a street to the shock of pedestrians.
Achieving brand recognition is a difficult task. In an ever-changing, quickly advancing business and marketing landscape, brands need to stay on their feet so that they’re not drowned out by the hundreds of doppelgangers in the market.
So why then are we seeing global brands ditching all the money and hard work put into making their brands the giants they are today? Just this week, Dunkin’ Donuts’ announced that it was dropping the ‘Donuts’ from its name by January of next year. When companies like PayPal, Google and Amazon opted to switch to their current names, they were still very young businesses at the start of their life cycle. So, for a company like Dunkin’ Donuts that had been building its name since 1950 to opt for a rebrand now might sound suicidal, but there’s more to it than at first apparent.
In July, the company saw a CEO change, with the position now held by Dave Hoffman. With Hoffman’s entry, the company began taking more active steps at rebranding, even though they had begun the process a few years ago.
It could be that the brand has reached peak maturity, and in an effort to innovate and capture new audiences they have considered rebranding.
The reality of the situation might not be too far from this, actually.
“This isn’t a change for the sake of change,” Dunkin’ Brands CEO David Hoffmann said in a call with reporters on Tuesday, Business Insider reported.
“For two years, we have been focused on evolving Dunkin’ into the premier, beverage-led, on-the go-brand and have been implementing what we call our blueprint for growth.”
It seems that while Dunkin’ Donuts was far from unsuccessful, its audience demand had begun shifting naturally towards beverages.
“Dunkin’ Donuts hasn’t been quiet about its aspirations to build up its drinks business, which currently makes up roughly 60% of the company’s sales,” Business Insider explains. “Doughnuts don’t currently have the best reputation as Americans move away from sugar, and they also have lower profit margins than many beverages.”
Yet, there’s more to the name change than just a focus on coffee and drinks.
Brand diversification and simplicity
Just like Starbucks dropped the “Starbucks” and “Coffee” from its logo, Dunkin’ Donuts seems to be doing the same. In 2011, the American coffeehouse chain simplified its logo to depict the green two-tailed mermaid without any words.
Then-Starbucks-CEO Howard Schultz said, “It’s possible we’ll have other products with our name on it and no coffee in it,” BBC had reported at the time.
This mentality seems to be pervading more than just coffeehouse chains donut shops. This week, Weight Watchers slashed some weight themselves, dropping their name to a mere ‘WW.’ “Wellness that Works” is their new slogan, averting attention from era-sensitive words such as weight and diets. In their new vision statement, the Washington Post noted that “variations of the word ‘health’ appear multiple times,” but there were no signs of the words “diet” or “weight.”
‘Wellness’ according to marketing sweet talk by WW is a “state of complete physical, mental, and social well-being,” In corporate talk, it means that they will be able to sell and market a wider range of products than they previously could under their previous brand.
As major brands such as Dunkin’ Donuts attempt to play a larger role in our lives, they can’t be tied down by a single product or market. This attempt at simplification and obscure branding addresses just that.
What’s the coffee chain market like in the region?
Coffee is a major product in the MENA region. Forbes reports that the UAE has been the fastest evolving coffee market in the GCC.
“Starbucks, Costa Coffee, Tim Hortons, Caribou Coffee, Caffe Nero and other major coffee chains have a presence in [Dubai]. These players have played a significant role in bringing the modern café culture in the UAE,” they continued.
According to a study by Ken Research titled “UAE Coffee Chain Market by Regions (Dubai, Abu Dhabi, Sharjah and rest of UAE), by Organized and Unorganized, by Food and Beverages – Outlook to 2021”, the market has registered an increase from $359.3 million in 2011 to $549.3 million in 2016 at a CAGR of 8.9% over the specified time period.
According to this data, there are around 1,151 coffee outlets in the country. Starbucks alone operates nearly 600 stores in 12 MENA countries, and employs more than 10,000 employees, according to data on their site.
According to a 2017 Food & Beverages Sector Report by Ardent Advisory, cafes and bakeries represented 34.6% of total F&B outlets in the GCC in 2015, putting them at around 18,288 total.
This major market will prove very lucrative for Dunkin’ Donuts when it does make the full transition to a coffeehouse chain.