Dunkin' Donuts: Reinventing Itself One Cup at a Time Scott Reeves Apr 24, 2008 9:29 am |
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Dunkin’ Donuts was founded in 1950 by Bill Rosenberg in Quincy, Massachusetts, just south of Boston and light years away from the attitudes spawned by nearby Cambridge, long a Starbucks stronghold offering at least 13 stores within shouting distance of Harvard and MIT.
Rosenberg grew up in Boston’s Dorchester section, not known for its lace curtains, and dropped out of school in the eighth grade to go to work during the Depression. He launched Industrial Luncheon Services Company and sold snacks to factory workers during World War II. He opened a donut shop in 1948 called Open Kettle that served as the prototype for what became Dunkin’ Donuts two years later.
The company’s makeover, slower than a glacier at times, began with Rosenberg’s retirement in 1988. Fred the Baker, an advertising character who recited the mantra “Time to make the donuts” and made Dunkin’ an icon, got the boot in 1997. The “dunkin’ donut,” complete with “handle” for dipping in hot coffee -- a working-class custom that would be a fatal faux pas at Starbucks -- was gone from most stores by 2003.
Dunkin’ Donuts retains echoes of its blue-collar roots despite developing an expanded menu to compete with Starbucks. The company now offers plain bagels (320 calories each), the Supreme Omelet on a Croissant (530 calories) and Chocolate Chunk Cookies (540 calories), while keeping around old faithfuls such as the Chocolate Glazed Cake Donut (340 calories) and Jelly Filled Donut (270 calories).
Dunkin’ seems content to let others take the risk. Einstein Bros Bagels (BAGL) rode IPO mania in the 1990s and developed a new market, but Dunkin’ Donuts soon became the nation’s top bagel seller.
Today, the company must protect its flank against McDonald’s Egg McMuffins and other breakfast food offered by Burger King and Wendy’s (WEN), as well as defend its namesake territory against Krispy Kreme (KKD).
It’s succeeding. You know it’s a brave new world when there’s a Dunkin’ Donuts just down the street from Harvard Square in Cambridge. It seems to be wildly popular. A harried student, attempting to kick his brain into gear to start the day, posted this note on a message board:
I always roll into Dunkin’ Donuts at like 8:55 am... pretty much the worst time to go. . . because... the line is like 8,000 people long... My brain: Hurry!... Luckily, this Dunkin’ Donuts is able to serve approximately 8,000 people every five minutes.
Starbucks bottles the ambience of a European coffee bar, or at least the undergraduate conception of Paris’ left bank, and encourages the thinking of profound thoughts while slurping an expensive cup of Pike Place Roast. Krispy Kreme recreates the gleaming 1950s diner. McDonalds plans to roll out high-end coffee in its restaurants starting next year.
But the décor of Dunkin’ Donuts, true to its working class tradition, says: Back to work!
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