Article

Dunkin's new sandwich station a 'game changer' for speed and growth

The brand is launching dark roast coffee next week and is testing smoothies and other 'blender' beverages.

September 19, 2014 by Alicia Kelso — Editor, QSRWeb.com

Dunkin' Donuts is mostly a beverage and donut concept, but its sandwich category has grown exponentially in recent years.

Beverage platforms account for 57 percent of the company's sales, compared to 23 percent for bakery and 16 percent for food. The latter has experienced a double-digit increase in the past several years, according to VP of Operations, Weldon Spangler.

The food focus will continue to increase as the company tries to tap into new consumer demands that blur the traditional daypart lines.

To support the sandwich category's growth, Dunkin' Donuts has recently added steak and chicken platforms that are available all day and all year long. The company is also testing burritos and croissant donuts.

"We will introduce over 40 new products in the next 12 months. We have great afternoon snacking products that recognize the trend to snacking," Global Marketing President John Costello said during the company's investor day this week. He said there are a number of drivers contributing to this trend – a more diversified population and a large millennial demographic, as well as more time-crunched schedules.

"Traditional dayparts are breaking down. Our positioning is more relevant today than ever before," he said.

Sandwich station supports growth

The brand is also rolling out a new sandwich station and is calling it a "game changer" in support of Dunkin's sandwich growth.

"We are unleashing the potential of the sandwich category," Spangler said. "The sandwich station was created from our own success. With our LTO strategy, a lot of new products are introduced and we realized we had bottleneck lines at the sandwich station and we needed to improve that."

The company designed and tested a new station that expedited throughput and supports a flexible menu. Among its features is a new dual-belt toaster and larger holding equipment. Because of Dunkin's diverse footprint, the station includes modular pieces that can be customized per restaurant.

"The project is an initiative that will allow for future growth of this platform. It will unleash the potential we have for growing this part of the business," Spangler said.

For example, the company estimates that the dual-belt toaster eliminates about 33 seconds of cooking time per English muffin/hashbrown order.

"In my day, 33 seconds doesn't matter, but when you're multiplying that by 10 guests in a row, that adds up to real speed of service, real throughput and real guest experience," Spangler said.

The sandwich station is currently testing in four restaurants. It will be included in new builds and the cost for retrofits is unknown at this point. It will also differ because of the modular availability.

Smoothies in test

The sandwich category isn't the only focus for Dunkin'. Its high-margin beverage platform is expected to expand, beginning with the dark roast coffee launch Sept. 22.

"We think Dunkin' Dark Roast has the potential to bring in new users and to help us succeed more in the West," Costello said.

Hot coffee, he adds, is the brand's "most important" category.

On the frozen side, Dunkin' is currently testing a new blender platform in South Florida, including smoothies. Flavors in test include strawberry, strawberry/banana and mango.

Also in test is an unsweetened Coolatta Light and a Frozen Dunkaccino.  

"The blender platform is generating very strong results and we're encouraged by its potential," Costello said.

He also said potential exists for specialty coffees, or espresso-based coffees, which are growing by double digits. Iced and hot tea categories are also growing for the brand.

Cup technology

To support the company's beverage plans, Dunkin' is testing new cup technology.

CEO Nigel Travis said Dunkin' Donuts is close to finalizing a new recyclable cup, which he said feels like the brand's signature foam cups.

"I love this cup," he said. "It's sustainability at its best."

The company is working with "two or three" manufacturers as it continues its test. A decision is likely to be made next year.

Also: Read more about Dunkin's expansion plans outlined during the company's investor day.

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