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NEW YORK CITY—In his address at a New York restaurant show on March 1, Dunkin' Brands chairman Jon Luther said he had successfully changed Dunkin's image with the public. Luther said, "We had to unwind 60 years of culture" and that the iconic "Fred The Baker" campaign led to a perception that Dunkin' was a doughnut shop, even though half the sales were coffee.
Luther identified the Dunkin' tribe [demographic] as "the blue-collar fold," who are "regular average people" that "love routine," are "not judgmental," nor "driven by status."
Luther said that it had taken him six and a half years to effect the "transformation" of Dunkin' Donuts.
He stressed the importance of integrity. "I selected my team on values" he said. "When is the last time you trusted anyone who lied to you?" Luther flipped to Powerpoint slides he had prepared about his core values — among them: honesty, integrity, responsibility and humility.
Defending the placement of Dunkin' Donuts coffee in supermarkets, Luther said that "it seeds the market" and that after the coffee hit supermarket shelves he was getting a stream of phone calls from shoppers wanting to know when a Dunkin' outlet would be coming to their town. Luther said that there are now "2000 stores in the queue" but that "ubiquity is not our ultimate goal—it's convenience" since Dunkin' customers are "people are in a hurry."
Dunkin's chairman is not impressed with Starbucks. But he regards Tim Horton's as "one of the finest run companies in our segment. I actually met Tim Horton . . . we take them very seriously." The problem for Horton's, according to Luther, is that they remain a Canadian company and it will be "hard for them to leapfrog to Atlanta."
Luther was harshly critical of the Obama administration: "The things that are coming out of this administration are hurtful." He added, "The greatest single threat we have to our business is the government."
In response to an audience question, Luther noted that the franchise model remained the Dunkin' Donuts strategy, although "we'll probably end up with a small amount of company stores for testing and training."