Dunkin Making a Push Against Starbucks

For many years, there was one coffee company that reigned supreme. You know of whom I speak before I say the name: Starbucks. For a generation, this brand became synonymous with coffee on the go. Then the brand landed on grocery shelves and created a new battle of the brews. This led to Starbucks dominating both in their branded shops and at the corner store.


But those days may be over. Thanks to targeted efforts by the management at Dunkin’ Donuts, the pastry chain is making headway in its battle to best Starbucks, head to head. And Dunkin’ is seeing some success in what some may have called impossible.

On the heels of that success, shares of Dunkin’ stock are up 10 percent this year so far and 25 percent in the past year overall, thanks to sales figures that topped any of Wall Street’s best estimates. Seems the marketing narrative is turning into reality: much of America really does run on Dunkin’.
More and more people are getting tuned into Dunkin’s coffee, at the bakery, and on the shelf.
Meanwhile, Starbucks is dealing with a bit of a PR catastrophe linked to the rollout of its mobile app. Meant to offer customers ordering convenience, the app was so popular and so many people used it, that the baristas had no hope of keeping up with demand. They floundered, as did reviews of the app.
Starbucks executives, including incoming CEO Kevin Johnson, choose to say it’s just evidence of success that requires some adjustment. They are promising to get the problems ironed out soon so that the app will deliver on the promised convenience. That would be a good thing for Starbucks because the company is seeing a decline in walk-in traffic as more customers are choosing not to stay when they see lines out the door of people who already ordered online.

There’s no doubt that this inconvenience offers an opportunity for Dunkin’ and other contenders to the coffee crown. And Dunkin’ is doing its best to take advantage. Offering new and different drink options, amping up the quality and trying to appeal both to the bargain coffee shopper and the fan of fancier coffee concoctions that made Starbucks famous.

The latest iteration about to hit stores? Frozen Dunkin’ coffee. No, not coffee ice cream, this is a new take on cold coffee that Dunkin’ hopes will give it a competitive edge heading into summertime. And don’t expect that to be the only new offering. Dunkin’s management have seized on this opportunity created by the Starbucks app implosion, and they plan to take full advantage.

William Doonan is a tax law and legal expert in New York.