The latest growth opportunity for fast food restaurants is breakfast, which has largely been dominated by those who feature breakfast or a giant like McDonalds.
In recent years, we’ve seen Hardee’s advertise breakfast almost exclusively while Taco Bell has entered the fray. The interesting thing is that those who seem most able to swiftly move into that position are the morning coffee houses, such as Starbucks and Dunkin’ Donuts.
Starbucks is having a strong year, but Dunkin’ Donuts recently told Wall Street that it won’t be meeting expectations. That’s mostly because it hasn’t increased market share in the breakfast segment even with new menu offerings.
What gives? My sense is that Dunkin’ Donuts is too associated with the fatting food in its name. Donuts. It’s the same reason why Burger King has never been a huge breakfast player, at least compared to McDonalds.
This is about brand permission, the permission that consumers grant you to enter a new market because of what your brand means. In the case of Dunkin’ Donuts, its brand means two things: Donuts and coffee. Donuts is in its name while its theme line is “America Runs on Dunkin’,” which means coffee.
That’s a fine position that has served the chain well, but as it increases its breakfast reach – upping its total number of restaurants by more than 600 worldwide this year and adding menu items like breakfast sandwiches – Dunkin’ Donuts must consider a rebrand.
I’m not suggesting a name change (although it should be on the table if research suggests it is needed), but a new meaning.
If the reach is changing, than what Dunkin’ Donuts means must change as well. In theory, “America runs on Dunkin” could include breakfast sandwiches. Emotionally, however, it still screams coffee, the jolt to start your day.
Having some experience in this category, I think there is still great opportunity in it with the right brand meaning. For Dunkin, the challenge is to carry over any brand equity into an altered (and an increasingly competitive) market.
The chain needs a different approach.