Donna Goodison writes in the Boston Herald: It’s time to make the doughnuts – again.
Americans’ recessionary mindset for comfort food and value has prompted Dunkin’ Donuts to make the biggest marketing push of its namesake product since the iconic Fred the Baker campaign debuted in 1982.
The Canton chain is embracing its 59-year heritage after a decade-plus of pushing coffee sales, which generate 60 percent of its $5.5 billion in annual revenue, and expanding its menu to include everything from apple pie and cookies to salads, soups, omelets, hash browns and egg-white flatbread sandwiches.
But this spring, Dunkin’ launched a $10 million, six-week marketing campaign focusing on the doughnut, which accounts for 20 percent of its sales each year.
“This was the first time in decades that we spent this much against the doughnut category,” said Scott Hudler, senior director of brand marketing. “It’s huge, and it’s on par with what we spend for other big promotional activities.”
Dunkin’ wanted to reinforce its position as the doughnut leader, according to Hudler.
“Especially in this economy, there’s a tremendous value in doughnuts,” he said. “And everybody is looking right now for the simple treat – the simple indulgence – and we feel that doughnuts fill that need.”
Sales of Dunkin’ doughnuts, which cost 79 to 89 cents each in the Boston area, have been rising in correlation with the downturn in the economy, according to Hudler, who declined to quantify the increase.
The company’s renewed doughnut focus started with a March 18 announcement of a 49-cent doughnut promotion and the launch of its first-ever “Create Dunkin’s Next Donut” contest, which drew nearly 130,000 online entries.
The dozen contest finalists, who are vying for a $12,000 grand prize and the opportunity to have their doughnut sold for a limited time at Dunkin’ shops nationwide, participated in a bakeoff last Thursday. The winner will be announced on “National Doughnut Day” on Friday, when Dunkin’ will also for the first time give customers a free doughnut with the purchase of any beverage.
The contest knocked Dunkin’s Web site traffic “out of the park,” Cynthia Ashworth, vice president of consumer engagement, told a May 13 Association of National Advertisers conference in New York. “We had the kind of Web traffic that we never dreamed of at Dunkin’ Donuts,” she said.
Not only did customers “come out in droves” to make the doughnuts, but they shared their creations. “It was doughnut love magnified, because people posted them to their Facebook pages, downloaded them (and) sent them to their friends,” Ashworth said.
“What we realized is that in tough times, people want a little comfort and a little nostalgia and also people are becoming less afraid of carbs,” she said. “That had been quite a challenge in our doughnut and bakery marketing for a while.”
The food industry has seen the same trends in past recessionary or slow economic times, according to Ron Paul, president of Technomic Inc., a Chicago-based restaurant consulting firm. Consumers adopt a “you deserve a break today” mentality and think less about carbs or health concerns when it comes to eating.
This time around, that consumer movement is evidenced by the return of the hamburger and Kraft Foods Inc.’s first-quarter earnings announced this month, Paul said. Kraft said its 3.3 percent increase in U.S. grocery sales was driven by double-digit growth in macaroni-and-cheese dinner sales.
“Consumers tend to look more for comforting foods and, as a result, going back to the basics like doughnuts makes sense,” Paul said. “A doughnut is an inexpensive food item, and it gives you a lot of taste and obviously sugar for not very much money. It’s not like going to the Cheesecake Factory and spending $7-plus for a slice of cheesecake.”
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