by Karlene Lukovitz @KLmarketdaily, January 5, 2012

Dunkin’ Donuts is streamlining its supply chain as an important step toward realizing a goal of more than doubling its number of U.S. locations over the next 20 years.

Dunkin’ Brands Inc., parent of Dunkin’ Donuts and Baskin-Robbins, has signed a long-term, performance-based agreement with Dunkin’ franchisee-owned cooperative National DCP that makes NDCP its exclusive supply-chain provider for all Dunkin' Donuts restaurants in the continental U.S.

The deal will streamline Dunkin’s distribution model, enabling significant cost efficiencies and, most important in terms of U.S. expansion, providing franchisees in new markets with the same product costs as franchisees in more highly built-out, established Dunkin' markets, according to Dunkin’ Brands. Uniform product costs will be phased in over a three-year period, starting in 2012. Improvements in service levels are also expected.

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Dunkin’ Donuts currently has nearly 7,000 (almost all franchisee-owned) stores in the U.S. (In late November, its parent announced an agreement to open 25 Dunkin’s and two Baskin-Robbins in Louisiana over the next several years.) Dunkin’ Brands has also been expanding internationally, including in China, where it opened its 10,000th worldwide Dunkin’ Donuts location in December. Combined, Dunkin’ and Baskin-Robbins have 16,500 locations in 56 countries.

As of October 2011, arch-rival Starbucks had nearly 11,000 company-owned U.S. locations (Forbes puts the number at 12,000+ now) and about 17,000 locations worldwide. Starbucks has said that it will open 400 net stores in North America and 400 in other countries during its fiscal 2012, which started in October.

On a volume/servings basis, Dunkin’ Donuts is the largest U.S. foodservice retailer of hot, flavored and iced coffees (and donuts, bagels and muffins), per NPD Group CREST data for the year ending December 2010. However, dollar-wise, Dunkin’ has about a 23% share of the U.S. coffee/snack-shop market, versus Starbucks’ nearly 33%, according to the IBISWorld industry research firm. Dunkin’s global, system-wide franchisee sales for FY 2010 (ended Dec. 25 2010) were $6 billion (plus $577 million in other revenue), to Starbucks’ $10.7 billion worldwide revenue in FY 2010 and $11.7 billion in FY 2011.

For the first three months of its fiscal 2011 (ended Sept. 24, 2011) Dunkin’ Brands reported Dunkin’ Donuts U.S. franchisee revenues up 8.5% and other revenue up 13.4%, yielding segment profit growth of 23%. Internationally, the chain’s franchisee revenues grew 13.7% and other revenue grew 3.3%, but segment profit dropped 32.5%. Dunkin’ Brands as a whole saw total revenue rise 7.6% in the first nine months, although net income dropped 45.7%, in large part reflecting expenses from its initial public offering in July.

In the U.S. marketing arena, Dunkin’ Donuts has been particularly aggressive about employing social media.

Current efforts within its ongoing “Get Dunk’d” social media marketing program include one in the New York metro area, running through Jan. 28, that rewards consumers who “like” Dunkin’ on Facebook or follow the brand on Twitter with a Get Dunk’d VIP card. Social media alerts let cardholders know when prize giveaways – including Harlem Globetrotters tickets -- will be conducted at specific Dunkin’ locations, spurring them to get to these locations in time to claim one of a limited number of prizes.

A second, Twitter-based effort is promoting Dunkin’s “better-for-you” DDSMART menu items (many of which have less than 300 calories) by encouraging consumers to use a special hashtag (#DDSMARTY) to tweet a “smart choice or a way that they will ‘keep themselves running’” in 2012. From Jan. 3-6, Dunkin’ is selecting one winner per day to receive a $50 Dunkin’ gift card.

In December, Dunkin’ ran a promotion in which consumers who checked in from Dunkin’ locations on Foursquare and Facebook Places received prizes.

Dunkin’ plans to run another social media contest around Valentine’s Day, and to continue social media giveaways throughout 2012, reported DM News.

In a different type of social initiative that launched last August, Dunkin’ Donuts has been incorporated as the exclusive restaurant brand in Electronic Arts Inc.’s The Sims Social Facebook game.