The Profits Run on New Dunkin’ Donuts Products

It can be tempting in times of economic crises to batten down the hatches and wait out the storm.  Dunkin’ Donuts’ president and CEO, Nigel Travis, decided to take a different tack.  A slate of new products were behind much of the company’s 10.9 percent sales growth in the first quarter of 2012.  These numbers continued the upward trend from the end of 2011.

 

Travis believes that much of the growth resulted from an increase in customer traffic and spending.  New offerings, such as breakfast and bakery sandwiches, limited time selections, and K-cups to be used at home raised revenue without affecting the sales of products traditionally purchased in store.

 

Increased Revenue = Increased Expansion Opportunities

 

With a goal of doubling the number of Dunkin’ Donuts storefronts in the next 20 years, the numbers seen in the first quarter of 2012 are encouraging.  Existing franchise holders appear eager to expand their businesses and there is plenty of interest among potential new franchisees as well.  It all paints a very positive picture for the future of this popular chain.

 

Innovation at Dunkin’ Donuts goes beyond the kitchen and into the marketing department as well.  The new flavor of the month, 3-Point Chocolate, was introduced during March Madness capitalizing on annual basketball fever and samples of the new cake products lead to an increase in cake sales.

 

The Future of Dunkin’

 

Dunkin’ Brands continues to dedicate itself to growth and has just signed a new agreement that will supply its distribution network.  The contract with National DCP would help to drive down product costs in sparsely populated territories in order to encourage potential franchisees to tackle new areas.  The company hopes to see 260-280 new units by then end of 2012.

 

Sister company Baskin Robbins also saw good growth in the first quarter of 2012.  Sales were up 7.2 percent, although some of that increase may be attributed to warmer than normal weather throughout the period.

Marketing Trends In the Food Industry

Several factors drive innovation in the food industry.  Lately, it seems, food trucks, comfort, and authenticity are behind many of the changes seen in menus country wide.  During difficult economic times, innovations on the menu helps to raise customer return rates, but authenticity is necessary to retention.

 

Nancy Cruse, the president of The Kruse Co. and a columnist for Nation’s Restaurant News cites, “a distinct uplift in the amount of innovation as it pertains to menu development” as a result of the changing economic environment.  That innovation falls into three categories: the customers’ demand for authenticity, food trucks that generate rapid advances, and creative comfort that results in slower menu changes.

 

Comfort in Change

 

Creative comfort is a driving force behind the changes see in foods such as gourmet waffles or pretzel-based sandwiches.  A well known food is adapted to meet the need for change while still appealing to those who desire a familiar taste.  Examples include Dunkin’ Donuts’ Waffle breakfast sandwiches or the chicken and waffles dishes available at IHOP.

 

Trucking In Innovation

 

Food trucks, most of which offer quick, easy, and fun fare, have the advantage of bringing their menu directly to the market.  They also don’t have to make huge investments to try something new.  As a result, many food trucks are the source for the unexpected when it comes to innovation in food service.  It doesn’t take long for their successes to make it into more mainstream locations.

 

Authentic Flavor and Tradition

 

If it seems to you that everyone is suddenly offering things like hand cut fries, boasts their connections to local farmers, or cite family recipes, you are absolutely correct.  Provenance, preparation, and promotion are all part of the authenticity package.  Customers seek a connection to their food these days, and anything that smacks of authenticity, whether on the menu or in the marketing, helps attract and retain a customer base.

 

Keeping up with food industry trends involve more than just constantly revamping the menu, it requires an awareness of what customers want.