Dunkin’ Donuts announces plans to open 75 stores around the San Antonio area in the next few years. San Antonio Express writer Melissa Monroe asks Andrew Hetzel to speculate why now is a good time for the chain to expand in the Southwest.
Spoiler alert: it’s all about coffee.
A familiar name is bringing reinforcements to the Alamo City java wars. Dunkin’ Donuts is set to enter the market in a big way, fighting for customers that mom-and-pop coffee shops, behemoth Starbucks and Krispy Kreme have served before. Now with only one remaining San Antonio outpost, Dunkin’ Donuts plans to open 75 stores in and around the city during the next few years. And people from company officials to coffee experts say it won’t be hard for the doughnut company to come back.
“There’s been a substantial change in the market over the last five years, and it has been spearheaded by companies like Starbucks that have created a higher demand for all coffee beverages,” said Andrew Hetzel of CafeMakers, a coffee consultant based in Waimea, Hawaii. He added that Dunkin’ Donuts’ menu, which now includes espresso and frozen drinks, has helped it sail past competitors such as Krispy Kreme.
Dunkin’ Donuts, based in Canton, Mass., is scouting for franchisees here, with the first new store opening within 18 months, said Lynette McKee, Dunkin’ Donuts’ vice president of franchising. Last year, Dunkin’ Donuts said it plans to nearly triple its store count from 5,300 stores to more than 15,000 by 2020. It also plans to open about 125 new stores in the Dallas market and 63 in the Austin area. Robert Rodriguez, Dunkin’ Donuts brand president, said its aggressive approach here is what’s needed to meet the demands of the consumer. He added the company also has had “phenomenal success” in cities where it has come back.
At one point, Dunkin’ Donuts had nearly a dozen stores here. Over the years, the stores switched to other doughnut shops or closed. Rodriguez didn’t give details about why the stores left. A few years ago, Krispy Kreme created a media buzz with grand-opening crowds that wrapped around the building. Locally, there were four Krispy Kremes at one time, and now there are two. Despite Krispy Kreme’s challenges, Hamid Shams, the franchisee of the lone Dunkin’ Donuts store near Lackland AFB, said it’s about time the chain has created a larger local presence.
“A lot of people think Dunkin’ Donuts doesn’t exist here and are surprised to find this store,” he said. “There’s room for many more stores. It’s not just about doughnuts.” Indeed, more than 60 percent of Dunkin’ Donuts’ sales are from beverages, Rodriguez said. In recent years, the chain also has enhanced its menu by adding breakfast items such as a bacon-and-omelet croissant, teas and a variety of coffee drinks. By Oct. 15, all of its products will be free of trans fats. Rodriguez added that the Dunkin’ Donuts of today will surprise customers. The menu is much different, and the company continues to test new products, including a line of flatbread sandwiches.
Founded in 1950, Dunkin’ Donuts has 7,293 stores in 29 countries. BaskinRobbins and Togo’s are also a part of Dunkin’ Brands Inc. But while Starbucks has more than double the stores of Dunkin’ Donuts, the doughnut company has improved its coffee experience.
In a recent Brand Keys’ Customer Loyalty Survey that looked at both Dunkin’ Donuts and Starbucks, for the first time in five years Dunkin’ Donuts took the lead. “If you look at what they have been doing in the last three years, they have been doing an excellent job in reinforcing the brand,” Brand Keys’ Robert Passikoff said. “Dunkin’ Donuts doesn’t have a great presence, but they have the right values that resonate with the coffee-drinking public.”
Back at Dunkin’ Donuts on Military Drive, the store with its faded sign and recently renovated interior is packed on the weekends from folks attending military events or going to the base’s hospital. Many customers also drive long distances just to pick up several pounds of ground and whole bean coffee that the store sells. But the low prices and camaraderie are what have lured Eluterio Garcia to the coffee store on a daily basis for more than 20 years. Typically, Garcia and a group of men order coffee, socialize and eat a few doughnut holes between the networking.
Julia Waclawiak was surprised to find a Dunkin’ Donuts as she was driving around looking for a place to do paperwork. “I knew there was only one in San Antonio, and I was excited to find it,” she said while ordering a coconut-flavored iced coffee. “I’m familiar with the chain from going to school in Boston.” She will be a fan, Waclawiak said, as long as Dunkin’ Donuts keeps its prices down and she doesn’t come out of the store smelling like coffee.