The odd bedfellows of Dunkin’ Donuts

by JulieCraves on March 5, 2007

Dunkin’ Donuts is a coffee and donut chain that originated in the northeastern U.S. which now has 7,000 stores worldwide. The company reports that it serves 1 billion cups of coffee annually.

Last year, Dunkin’ Donuts announced an aggressive expansion campaign, in which it aims to triple the number of stores in the U.S by 2020.  In January, it added Asia to expansion agenda. Just last week, the company revealed it has entered into a distribution deal with Procter & Gamble to put Dunkin’ Donuts coffee on retail shelves.

All this market saturation comes about a year after the Dunkin’ Brands group (which also includes Baskin-Robbins ice cream stores and Togo’s deli) was purchased by three private equity firms.  Bain Capital was founded by Republican presidential candidate Mitt Romney, who left the firm in 2001. The Carlyle Group owns controlling interests in many military contractors. Headquartered in Washington, DC, so many politicians have been associated with Carlyle, including both Presidents Bush, that it has been called the “Ex-Presidents Club.”  Former G.H.W. Bush Secretary of State James Baker is one of the founders. Thomas H. Lee Partners is known for its recent purchase of Clear Channel Communications, and is now pursuing buyouts in China.

Even prior to the change in ownership, coffee accounted for over 60% of Dunkin’ Donuts $4.4 billion annual revenue, accomplished in part by one of the highest mark-ups in the industry, about 95%, according to an article in New York Magazine. Even as they contemplate world domination, there is grumbling that the quality of their coffee may be in decline or at least inconsistent.

Is it sustainable? Their espresso drinks are made from Fair Trade beans, but there is little information available on origin, other than they use 100% arabica beans from Central and South America.  However, this photo of a sun coffee farm comes from their “From Tree to Cup” slide show.

Let’s see, the idea of supporting the military-industrial complex, investments in China, and sun coffee for a so-so cup…. no thanks.  That just leaves a bad taste in my mouth.

(Update: see also “A hot serving of empty promises” regarding the brands’ sustainability initiatives.)

Revised on January 7, 2022

Posted in Corporate coffee,Dunkin Donuts

Lila March 5, 2007 at 9:51 pm

Mmmmm. Dunkin' Donuts. Before DD came to DC, I would pick up the occasional bag of coffee during my New England travels. I'm glad to see that their coffee will be on shelves, but it certainly won't replace someone adding milk and sugar for me.

I know that I should feel enormous amounts of guilt about it, but I think I'll suprise my coworkers with a dozen 'donuts' tomorrow morning.

Jasmin March 7, 2007 at 1:26 pm

I really why they don't publicize the fair-trade connection? It seems like it'd make good PR for them.

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