Dunkin' Donuts

 By Bruce Shawkey

Great article on Dunkin' Donuts on the Internet. I used to love going to Dunkin Donuts when I lived in Janesville, Wis. I would get a couple donuts and a cup of coffee and maybe spend an hour in their store, munching away and reading the free newspaper that was often left there by another patron.

I remember some of their early TV commercials, where the donut maker would rise at 4 a.m. and lament, "Time to make the donuts." That would become a catch phrase for me for any formidable task, from going to work on Monday mornings, to mowing the lawn.

Making the donuts has become a secondary or even tertiary task for Dunkin employees, as most donuts arrive pre-made, and all the employees have to do is fry them, and add frostings and/or fillings. I would guess a good portion of their income comes from breakfast sandwiches, coffee, and fruity sugary cold drinks aimed at children and non-coffee drinkers.

Still, when all is said and done, I get a hankering for donuts from Dunkin once in a while. The donuts from Hy-Vee's bakery are just as good, if not better, but still donuts from Dunkin beckon once in a while.

Here is the article:

10,000 Stores In, Dunkin’ is Still Shaping Trends and Setting the Pace

Scott Murphy, who had spent nine-plus years at management consulting firm A.T. Kearney, Inc., joined Dunkin’ in 2004, the same year it relocated HQ to Canton, Massachusetts. He isn’t sure how many stores the brand had back then, recalling it was “probably only a couple of thousand.” Whatever the figure was, it’s hardly hyperbole to say Dunkin’ grew up over the next 21 years.

In early October, franchisees Bud and Raj Patel of The Hari Group opened U.S. store No. 10,000 in the Chicago suburb of Darien, Illinois. Only four restaurant chains in America appreciate this 10,000-club air—Subway (19,502 stores year-end 2024), Starbucks (16,395), McDonald’s (13,559), and now, Dunkin’.

That’s a lot to take in for a brand pundits used to characterize as a regional donut and coffee chain. Murphy was named COO in 2018, promoted to president a year later, and today, following Dunkin’s December 2020 $11.3 billion sale to Inspire Brands, serves as the chain’s president and Chief Brand Officer for all of Inspire’s concepts (more than 32,600 Baskin-Robbins, Dunkin’s, Sonic Drive-In, Arby’s, Buffalo Wild Wings, and Jimmy John’s locations).

He says, in succinct terms, “it’s really cool” to recount Dunkin’s journey from a cult-favorite to a national, beverage-led powerhouse that’s spread to 15,000 units globally across 40 countries and unaided awareness “off the charts.”

“Billions of transactions,” Murphy says. “Honestly, I feel very lucky to have this job, because it’s a very special brand.”

A reality about Dunkin’, as held true previously, is 10,000 locations represents both a milestone and recognition of hard-to-rival whitespace. Of those stores, 9,000 cluster east of the Mississippi. Dunkin’ just recently opened the Pacific Northwest for franchising. There are six states there where Dunkin’ has zero presence. “And there’s a ton of demand for our brand out there,” Murphy says. “It plays really well. And we’ve got a CPG presence in supermarkets up there. We’ve got the national advertising. It’s pretty cool to hold the Dunkin’ cup these days, anywhere you are. So we want to capitalize on that.”

Murphy believes Dunkin’ could still double its U.S. footprint and reach 20,000 locations. As noted, with the way things stand today, doing so would make Dunkin’ the largest domestic restaurant chain there is.

And Murphy couldn’t think of a better time to start barreling toward that ambition. Beyond Dunkin’s own equity and reach, it’s eyeing share in a beverage arena with hordes of challengers and copious demand. Research suggests per-capital away-from-home coffee consumption could grow mid-single digits going forward and open runway for another 20,000 U.S. coffee shops, per William Blair. The rise of Gen Z purchasing habits have, among other things, erupted specialty beverage activity (growing at a high-teens rate versus 2020, according to the National Coffee Association), cold options, and given upstarts like Dutch Bros, 7 Brew, Black Rock, and more, ample landscape to chase. Additionally, large-scale QSRs such as McDonald’s, Taco Bell, and even Chick-fil-A, have spun into beverages with brand extensions. McDonald’s, which took a CosMc’s test inside locations, labels the specialty beverage sector a $1 billion field.

But Dunkin’ has some historic selling points you simply can’t invent. The chain has long claimed to create iced coffee. While you can dissect the timeline or details of that, you can’t deny Dunkin’ played a massive role popularizing and democratizing the option when it began brewing double the amount of coffee, cooling it, and then pouring it over ice. Iced Coffee joined Dunkin’s menu in 1995, soon adding Hazelnut and French Vanilla options alongside Original Blend. Windows 95 had just launched.

Murphy quips he’s “tired of all these competitors” grabbing beverage news. “On the one hand,” he says, “I find it flattering because we’ve been there for 75 years with beverages [Dunkin’ was founded in 1950 in in Quincy, Massachusetts]. And I think we’re the dominant player. And while you see these huge growth rates on these small players, it’s easier to have huge growth rates on small numbers. But even over the last year, we’ve grown share in hot coffee, iced coffee, hot espresso, iced espresso. And we’ve doubled our mix of Refreshers.”

“So I would say just keep writing about this category because the more the world is talking about this stuff, the more people are gravitating toward Dunkin’ because we are a trusted place to get beverages and we’ve got the footprint, we’ve got the awareness, and we’ve got the speed and value.”

As the company says, its beverage menu doesn’t deliver on trends—it shapes them.

This brings Dunkin’ to another inflection. Murphy says the company is on a mission to reclaim the afternoon space and lean into all these trends and core strengths. So it just kicked off a three-market test where it’s updating afternoon menuboards to iced beverages. They’re bright, colorful, with cool, fun names, he says. The music was dialed up. There are new crew uniforms. Sticker and swag giveaways. Targeted digital offers. “It’s a whole new vibe in the afternoon,” Murphy says.

The menu will prioritize breadth in non-coffee, targeting an array of sweetness and caffeination, as well as light bites and sweet treats. Dunkin’ Energy, Refreshers, Lemonades, Teas, Matcha, and more, take center stage, along with the chain’s “most fun” coffee and espresso options.

This, too, Murphy says, is a place where Dunkin’ veers from some other beverage brands. Seventy percent of its business still happens in the morning. Many competitors thrive in the afternoon but don’t surge early. So, for Dunkin’, he explains, growing this corner of the business is a fully incremental target. “I think it’s just total upside for us,” Murphy says.

“That’s the next iteration of Dunkin’,” he adds. “And I think we’re going to meet people where they want to be.”

If you visit some test stores, Murphy says, you’ll see high school kids gathering around the table with bright drinks and Dunkin’ stickers, popping them onto phones, and clamoring for giveaways. “And who would have ever thought a Dunkin’ sticker with a donut on it would be cool,” he says. “And they’re lining up for a Sabrina Carpenter custom cup we’re dropping on Wednesday afternoon.”

Colorful, fast, and with value, as only Dunkin’ could do.

It speaks again to how far Dunkin’s story has progressed. A couple of years ago, if somebody would have told Murphy the brand would have avocado toast on the menu, he would have laughed. Same if he learned of an incoming collaboration with Carpenter (the parties connected recently on a new Strawberry Daydream Refresher).

Dunkin’ CMO Jill McVicar Nelson, who joined in 2011 after a career consulting with IBM Global Business Services, elevating to the role from VP of marketing, was a principal architect of the chain’s five-year “Blueprint for Growth Plan” that launched in 2017. She spearheaded introductions of Refreshers, Cold Brew with Cold Foam, Avocado Toast, Snacking, and more.

Murphy says she’s been stacking up cultural hits since. He points to Dunkin’s partnership with TikTok star Charli D’Amelio in 2015 as a watershed moment of sorts. The Gen Z content creator, 17 years old at the time, helped sell “hundreds of thousands” of cups within the first five days, per reports, and drove app downloads nearly 60 percent. Sales boosted 20 percent for cold brews the day her drink was released and 45 percent the day after.

Holistically, though, it brought Dunkin’ into the purview of teen and young audiences and ignited a shift that’s continued today. The classic approach of linear advertising on TV and campaigns doesn’t generate enough authentic connection these days, Murphy says. His son gets news from TikTok. If it looks like a paid ad, he swipes. He wants to see who is naturally and organically using products, and that’s how he gets influenced, Murphy explains.

Dunkin’ has erupted in this universe, from “Secret Lives of Mormon Wives’” Jen Affleck poking fun at Dunkin’ superfan Ben Affleck to TV personality Paige DeSorbo’s Pink Spritz to Carpenter to, of course, the brand’s famed DunKings series with Ben Affleck and a host of stars.

Dressed down, from Dunkin’s afternoon pilot to category innovation, threads are connecting for the brand as it jumpstarts off 10,000 units. It’s using scale to reach the forefront of cultural moments and is working to translate “cultural sparks” into something tangible in-store or online, as fast as possible. Dunkin’ is going where Gen Z is, with content they want—TikTok to Instagram to podcasts—in formats they feel native. And what does this rising beverage customer seek? Affordable, fun, personal experiences. Dunkin’ can do all three without a premium price tag or long wait at the drive-thru, Murphy says.

Dunkin’ has achieved, as Murphy illustrated, double-digit growth in Refreshers over the last year. Iced beverages represent 65 percent of Dunkin’s beverage sales. Nearly 90 percent of transactions, overall, include a beverage.

And it’s all going to amplify. Dunkin’ offers zero-calorie energy drinks. It has a mixology line where guests can mix and match flavors. Soon, it’s going to release a line of protein drinks so customers can add protein to “almost anything,” hot or cold. “And we’re going to do it in a very Dunkin’ way,” Murphy hints. “We figured out a way to do it at the speed of Dunkin’ so we’re not going to slow down the crew or add complexity to it.”

Not to be lost in these updates, either, is the makeup of Dunkin’ itself. The brand debuted a Next-Gen store in January 2018 that soon layered in a $60 million investment for “state-of-the-art, high-volume” brewing equipment. Dunkin’ got to 1,000 Next-Gen units by March 2021. The 4,000th, often including digital order kiosks, dedicated mobile order pickup areas for in-store and drive-thru purchases, as well as more energy efficient layouts, arrived in July 2024.

And along this road, Dunkin’ dropped “Donuts” from its branding in 2018—the same year it relaunched espresso in one of its most significant product initiatives in seven decades.

Today, Murphy says, a little more than half of Dunkin’s 10,000 stores are NextGen; digital forward, set up for fast, with donuts out front, tap handles for iced beverages, digital menuboards, etc.

A week ago, between new stores and remodels, a new formatted Dunkin’ opened every two hours. “And so, I think the world is waking up every day to the new Dunkin’, and that’s pretty exciting,” Murphy says.

Roughly half of Dunkin’s 10,000 stores are updated to the NextGen model.

It’s a larger testament, he adds, to what happened in those transformative years. Dunkin’ was grinding it out, changing equipment, putting in label printers for accuracy, and so forth. It was doing the “non-sexy stuff” behind the counter, Murphy says, so it would have the consistency and quality to set up for expansion.

There were some pauses between now and then—namely COVID and then joining and integrating into Inspire’s burgeoning world. That latter was a move that took Dunkin’ private. The company has been busy since, even if it hasn’t been as open about the process as it was when it was trading on the stock market.

“But now, it’s all coming together, and the pipeline is full of innovation,” Murphy says. “And I just love that we’re out cutting ribbons on the 10,000th store and showcasing all of our stuff.”

No matter how many beverage brands enter the fray or what shifts around Dunkin’, he continues, the beauty of its model hasn’t changed. If you can’t deliver drinks in under two minutes on a consistent basis, every time, you’re going to disappoint many customers. That’s where Dunkin’ accelerates.

And over the decades, it’s developed this trust and expectation and paired it with a brand that regularly gets recognized as “relatable” and “appreciated” by focus groups. “There’s some ethos about Dunkin’ that everyone loves and they’re rooting for us,” Murphy says. “I want to lean into that because I think it’s something a lot of other brands don’t have.”

Expect to see a lot of that spirit this Halloween season as Dunkin’ rolls out its trick or treat buckets, themed Munchkins, a new campaign around donuts, takeover for the Macy’s Day Parade, and even a children’s book—details to come.

“I love to say, ‘hey, we take our coffee seriously, but we don’t take ourselves seriously,’” Murphy notes. “… We sort of poke fun at ourselves a little bit. And I think people appreciate that and appreciate the brand. We still have very high-quality products, but we don’t take ourselves that seriously. That’s what people love about this brand.”

“It used to be a sleepy donut and coffee chain, and I think we’ve emerged on the scene,” he adds.