Dunkin’ digs into deep product pipeline

by Eric Schroeder
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BOSTON — The launch this week of Angus steak and cheese wraps are just the latest example of the deep limited-time offering product pipeline at Canton, Mass.-based Dunkin’ Donuts, Inc., said Paul Carbone, chief financial officer.

“Two years ago, we launched the Angus steak breakfast sandwich and it was a success,” Mr. Carbone said during an Oct. 2 presentation at the Wells Fargo Retail and Restaurant Summit. “We also launched the Big N’ Toasted, which was bacon and fried egg; that was a success.

“Three months ago, we launched the Angus Big N’ Toasted. So we took a protein that worked and a carrier that worked, and we put them together. It was a very big success. We launched tuna and chicken salad a couple years ago. About six months ago, we launched tuna and chicken salad wraps. And now we have the Angus steak and cheese wrap.

“So we’re constantly taking winners — the protein itself, carriers — and interchanging them. This is the idea of winning begets winning.”

The latest limited-time offering features a full portion of Angus steak wrapped in a warm, 8-inch tortilla. The wraps are served with white cheddar cheese and the choice of either barbecue or ranch sauce.

Mr. Carbone said most limited-time offerings are just that — limited time. The items may appear for a couple months before disappearing and then reappearing 9 or 10 months later. There are exceptions, though, such as the Big N’ Toasted, which Mr. Carbone said has “earned their right to be on the menu.” Another item that now is offered as a staple is the turkey sausage breakfast sandwich. Introduced in January, the sandwich was a “huge success” as part of the DDSMART menu.

“But we’re pretty rigorous about on and off, and then they come back 10, 12 months later,” he said.

Not all new products are a success, but the misses at Dunkin’ at least have been few and far between, Mr. Carbone said.

“We have a robust testing,” he said. “I am happy to say that over the last three years we had one swing and a miss. It went through testing. It tested well. We came out, it was like a stuffed breadstick. Think of it as a Hot Pocket-type of product, and it tested well. It came out and it did just okay, below what our testing said. And that was our one big item that didn’t kind of live up to our expectations.”

Going forward, Dunkin’ plans to continue to focus on new products as opposed to value, with new products the key to driving traffic to the stores. For example, the company recently introduced a roast beef pretzel roll sandwich that has been an “absolute success,” Mr. Carbone said.

“It’s not like we ignore value, but it’s all about differentiated product,” he added.
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