The Next Time You Google Dunkin’ Near Me, It Will Show an Arby’s Nearby After Inspire Brands Acquires Dunkin’ for $8.8 Billion
Will The Charli iced coffee drink and Arby’s roast beef become a combo meal
As most writers do, I start the day by brewing my coffee. I call it my morning brew, which by the way happens to be the newsletter, I read to start the day with.
I even tried to quit coffee for 7 days, but it only left me with the question, What was I thinking?
I need to be caffeinated to write my stories.
We can talk about coffee all day long, how it helped not only writers but artists and songwriters. My new favorite song is by Beabadoobee, what else but the song “Coffee”. It has since become a worldwide hit, thanks to Canadian rapper, Powfu, who made a version of it, Death bed (coffee for your head).
The song went viral on the video-sharing app TikTok in early 2020, gaining over 4.1 billion plays for the month of March alone
Coffee is life. Like songs, it becomes part of our lives, well, to us who love coffee.
The Dunkin’ acquisition story.
When the news of Inspire Brands’s acquisition of Dunkin, was reported by the Boston Globe, it comes as a surprise. You would think billion-dollar acquisitions will not happen in 2020, as the world faces its biggest economic challenge.
But opportunities come in the most difficult moments.
As I was reading the news, it sparked memories of me still going to different cafes. Through the years, coffee shops give me more than my coffee fix. I visited countless Starbucks, Dunkin, and Tim Hortons. I have also supported small coffee shops, the ones where you can talk to the owner.
Coffee is more than a beverage, it reminds you of the people you hang out with. It also your companion during your solitary moments, when a cup of coffee takes your mind wandering.
Dunkin’ deal
America like the rest of the world had to close businesses. People are forced to work at home. Businesses suffered, most dine-in shops had to close. Starbucks and Dunkin both shared losses, as office workers, which are their customers are now working in their homes.
Dunkin has lost 20 % of its sales and will close 800 shops across America. It has come out stronger as people have become accustomed to the new normal. Reports have it that its biggest competitor, Starbucks in the early part of the pandemic lost 40%of its sales, estimated at $3.1 billion.
Dunkin can thank its drive-thru business plan put in place in 2018. Even Starbucks has to play catch up and increased their stores with curbside pickup.
We know what happens when business play the catch-up game, the one who comes ahead, wins.
It saved Dunkin from what could have been a disastrous year. Instead, it is about to be acquired by Inspire Brands, at a 20% premium above its stock value. Inspire Brands, the company that owns:
As Dunkin becomes a privately-owned brand, it is well poised to remain as one of the top global players in the coffee chain business.
3 things that Dunkin’ did right
Dunkin positioned its brand as a premium to-go coffee. It has its eyes on the number one spot held by Starbucks when it started offering espresso drinks. Dunkin is moving toward the big Gen Z market, who as they get older also become more coffee drinker savvy, but are also looking for value for money.
Drive-thru, a mobile app, and a TikTok mega superstar … saved Dunkin. A powerful combination that is like The Charli, cold brew with whole milk and three pumps of caramel swirl.
- It invested as early as 2018 in more drive-thru stores, making it the most transformational brand in 2018 according to QSR, for which in 2020 became a lifesaver for Dunkin.
- It used technology to make ordering easy, with its proprietary mobile app. Their mobile order and pay allowed customers to easily order online even 24 hours before picking up their favorite Dunkin coffee drink.
- It has attracted social media influencers like Charli, to make a 70-year-old legacy coffee brand appeal to Gen Z. Charli D’Amelio who is the TikTok queen with over 95.4 million followers, has her drink on the Dunkin Menu, called The Charli.
It was a marketing coup, with Charli D’Amelio seen most of the time on her TikTok videos with a Dunkin drink. As she continued to amass millions of followers on TikTok where most Gen Z are, spending their time online.
Coronavirus has changed the way we drink coffee. Not because coffee is a potential source of coronavirus, far from it. With more people working at home if you haven’t already bought a coffee maker and start brewing yourself your cup of coffee.
The pandemic has also made more people accustomed to ordering online, including coffee. While a regular home-brewed coffee will do on most days, we sometimes feel we need something special. This is where Starbucks and Dunkin have a stronghold.
In the years to come, when this pandemic is over when we can all feel safe to venture into our favorite cafes. Or when we go back to living our busy lives or remain in the comfort of our homes. Dunkin can become your coffee of choice, to enjoy it either in your homes or when you are on the go.
With the impending acquisition, it will not come as a surprise, The Next Time You Google Dunkin’ Near Me, It Will Show an Arby’s Nearby.
Will Gen Z customers, cross the street and start ordering Arby’s famous roast beef sandwich to go with their coffee?
It is something that Inspire Brands could be cooking, a combo meal perhaps. For now, with the $8.8 billion deal, Dunkin can rest assured it will remain to be Starbucks's biggest competitor.
And in a world where coffee is the dominant beverage of choice, the aroma of this deal will make Dunkin shareholders, feel a bit of a sugar high.
