July 27 - Shares of Dunkin' Brands, parent company of Dunkin' Donuts and Baskin-Robbins, were snapped up by investors hungry for a piece of its value-priced recipe for success. Bobbi Rebell reports.
The coffee is hot and the donuts are looking irresistibly tasty at this Dunkin' Donuts in Midtown Manhattan- a recipe to succeed despite formidable competition from Starbucks with its fancy concoctions, and lower-end rival McDonalds with its McCafe offerings. Hungry investors sent shares of parent company Dunkin' Brands up more than 40 percent in their Nasdaq debut on Wednesday. Dunkin' Donuts customers are incredibly devoted to the brand, according to research firm Brand Keys. It's ranked #1 for customer loyalty and engagement over the past five years. Starbucks came in second. Darren Tristano of food consulting firm Technomic: SOUNDBITE: DARREN TRISTANO, EXECUTIVE VICE PRESIDENT, TECHNOMIC (ENGLISH) SAYING: "The loyalty that their customers have shown them over the 60 years they have been in business has been very strong and done very well for the success of their business. They also have a pretty strong retail business when you take a look at the coffee beans sold in the store at the supermarket and even at warehouse clubs like Costco." Dunkin's unpretentious image has been key in the recession- its lower price points allow it to remain affordable even in the worst of times. In addition to repaying debt, the company says it plans to use some of the proceeds to help double the number of Dunkin' Donuts outlets over the next two decades- focusing on markets east of the Mississippi. The company also owns the Baskin Robbins brand- and has had success pairing it with the donut shops. SOUNDBITE: DARREN TRISTANO, EXECUTIVE VICE PRESIDENT, TECHNOMIC (ENGLISH) SAYING: "When you get towards the evening when the ability to sell coffee and donuts is reduced that's where a frozen dessert concept like Baskin Robbins comes into play. By co-locating you save a lot of the overhead costs, you are able to switch your resources, labor primarily more towards the ice cream and satisfy that more of the evening and snacking frozen desserts for ice cream." Internationally, the chain is strong as well, with 3,000 Dunkin' Donuts stores and about 4,000 Baskin-Robbins outlets. Bobbi Rebell, Reuters.