When Dunkin Donuts failed in India, it would’ve come as a significant setback to the multi-billion dollar company and a surprise to most of the food-chain gurus around the world.
But, careful deliberation of the case puts forward a logical answer to this incoherent fizzle of the sweet food giants.
Let’s start with a place where Dunkin Donuts has met great success, the United States of America. The story is nothing less than a fairytale.
How it all started
A young guy had an idea of selling sandwiches, doughnuts and coffees to the workers at a shipyard during World War II. Seeing that the major of his revenue came from coffee and doughnuts, he decided sale only coffee and doughnuts out of a food truck; he realized that the earnings were enough to open a restaurant, so he did that, and Dunkin Donuts was born.
The popularity of the brand
Slowly these new small-sized shops started to become the first stop for all the office goers who wanted to grab a quick breakfast on their way to work, and the franchise grew. The growth has been such that the brand has become synonymous with breakfast pretty much everywhere [CNBC].
Why not India then?
‘India is a diverse country’, and it rarely needs mentioning that this diversity extends to the eating habits of Indians, as well.
All the states, even different regions within that state, have disparate eating cultures. Which contrasts heavily from western habits.
Well, this is where the company miscalculated.
Although, culturally speaking, most people prefer to have breakfast, the first meal of the day, at home, with their family. So the franchise, founded to cater to the needs of the American office-goer, who usually takes breakfast on the go, could not find footing in the Indian market.
Indians see doughnuts as a ‘dessert’ more than a breakfast item. Hence, the stores were seen as a ‘sweet shop’ rather than a breakfast place, as around the world. Thus, to adapt to this change, it adopted a new strategy and changed to a “‘PM’ shop rather than an ‘AM’ shop.” To attract customers, it also entered into the fast-food sector and expanded its menu to include burgers. Variants of the traditional doughnut (like Kesar badam donut) helped in catering to the taste buds of the Indian consumer.
Moreover, the strategy leads to some success of the franchise in the second most populous market of the world, leading them to expand to 77 stores. But, the deviation from their original strategy and competition from some well-established players in the same sector, (like Starbucks, McDonald’s, Domino’s Pizza) proved to be an arduous obstacle for the company. Consequently, it had to close half of its stores by the mid of 2018.
In a report on the same subject, CNBC claimed that the rising health consciousness among the Indians is the reason of the dull reception that the franchise got in the country, but that didn’t stop Baskin Robbins, a subsidiary of Dunkin’s to be one of the most successful ice cream brands in the country.
Well, it was because Baskin Robbins concentrated on their essential product, ice creams, and as a result, succeeded in providing Indian consumers what they wanted. Thus, Dunkin’ Donuts though wasn’t that fortunate.
So, is it the end of Dunkin’ Donuts in India?
Well, though it may be hard to believe, India is not the first country, where the company has not been able to live up to its standards of success.
It has entered and failed twice in China, and in 2015, it tried a third time, with smaller kiosks and an ambitious plan of opening 1400 stores in the country.
This time, they seem prepared, with a menu that, on the one hand, retains the originality of the restaurant, and at the same time focuses on catering to the needs of their Chinese customers. Frankly, this time it seems they have good reason to be optimistic of their chances.
The franchise is doing something among the same lines in India as well. With closing non-profitable stores and reducing the size of the kiosks, it is looking to cut down losses. At the same time, going back to the beverage side of their business which they mostly stopped in the Indian subcontinent, to include tea flavours, which is among the favourites for the Indians.
Will we see a rise in popularity of the Dunkin’ brand in the country, only time will tell. But one thing’s for sure, the Brand is anything but ‘finished’ in the country.