Dunkin’s Run: A Love Story
Since opening the doors of its original shop 60 years ago, Dunkin’ Donuts has grown into an international juggernaut. Here’s why Bostonians don’t hold that against it.
Shafer: Over a three- or four-year period we increased from 80 new store openings a year to more than 300.
Travis: There’s a rule of thumb for how many stores can be in an area, but in New England we’ve probably exceeded it.
Siegel: You know, we built four stores within 600 feet of one another in downtown Boston and it never affected sales.
Kussell, former president, Dunkin’: Another part of our road map for growth was to expand our beverage portfolio. When I started at the company all we offered was regular and decaf.
Binder: And decaf was a cup of boiling water and an orange packet of Sanka.
Rosenberg: Up until a few years ago, iced coffee was sold only in Rhode Island. Most people had never heard of iced coffee. It’s now an international beverage.
Binder: In Rhode Island, instead of putting chocolate syrup in your milk in the morning, you put in coffee syrup. I mean, you grow up on coffee.
Shafer: Rhode Island and Southeastern Massachusetts were really the core areas of coffee strength for Dunkin’. That’s true of coffee ice cream. I think the region is the country’s largest buyer of Kahlúa as well.
Zografos: Unfortunately, along the way we lost the doughnut with the handle, the Dunkin’ Donut.
McCarthy: It was a move I did not endorse. It was a signature doughnut when the chain was developed. The shape was on purpose — people could hold it on that little handle and dunk it into their coffee. But they’ve never been able to develop a machine that could produce a good handle. It’s one of those sad things.
ALLIED’S GROWTH STRATEGY was working: Dunkin’ opened its 2,000th store in the U.S. in 1990, and its 3,000th just two years later. The chain’s overseas business was booming, too, as it opened its 1,000th international location, in Thailand, in 1995. But the doughnut itself was falling out of favor in an increasingly health-conscious society. Shaking things up, Dunkin’ launched two products within months of each other that ended up transforming the company: bagels, which were perceived as a form of health food (though even without cream cheese they have more calories than a Boston Kreme), and a new drink called the Coolatta.
Shafer: In the mid-1990s the demand for bagels was outstripping supply. Chains like Einstein and Bruegger’s were running to fill the void. I made a financial commitment to Heinz bakery for them to supply us with a billion bagels. A billion, yeah.
Schwarz: The first week, we became the country’s largest retailer of bagels.
Phil Speiser, Dunkin’ customer, South End: Actually, those bagels are awesome. They’re coming fresh out of the oven; how can you go wrong?
Kussell: At the same time, Starbucks had just made a small acquisition in Boston, the 24-store Coffee Connection chain. We just felt we needed to move fast. We went out to the West Coast and a lot of the small shops were serving these coffee slush drinks. They seemed to be very popular with women and kids.
Glenn Bacheller, former chief marketing officer, Dunkin’: I moved from Dunkin’ to become president of Baskin-Robbins [Dunkin’s sister brand]. We had this incredible cappuccino flavoring; you put it together with ice cream and you had the Cappuccino Blast. Frappuccino was what Starbucks ended up calling it later, but we were out with it a year or two before them.
Rosenberg: The Cappuccino Blast at Baskin became the Coolatta at Dunkin’. Almost overnight, that became nearly a $300 million piece of business.
Shafer: One of my son’s friends came up to me and said, “Is there any way we can get our own Coolatta machine at school?” I thought, Jesus Christ, we have a winner here.
Kussell: There were stories of franchisees running out of Coolatta concentrate and getting into their cars and driving to the distribution center to pick up more.
Shafer: Instead of Social Security recipients sitting around a counter sipping coffee, which was my introduction to Dunkin’ Donuts, we now had 12-year-old kids clamoring for a new product.