CANTON, MASS. — Dunkin’ Brands Group, Inc. is partnering with the Coca-Cola Co. to launch a line of Dunkin’ Donuts branded ready-to-drink coffee beverages in early 2017. Atlanta-based Coca-Cola will manufacture, distribute and sell the product. Financial terms of the agreement were not disclosed.
The deal marks Dunkin’ Donuts foray into the $2.3 billion ready-to-drink coffee category, which has been growing by double digits each year since 2011, and expands the brand into new distribution channels.
|Nigel Travis, chairman and c.e.o. of Dunkin’ Brands|
“We are delighted to be working with The Coca-Cola Co., a world-class partner that will provide us with world-class consumer access, by bringing ready-to-drink Dunkin’ Donuts coffee to the refrigerator cases of grocery, convenience stores and mass merchandisers, as well as inside Dunkin’ Donuts restaurants, across the United States,” said Nigel Travis, chairman and chief executive officer of Dunkin’ Brands. “This new product introduction will increase consumption of Dunkin’ Donuts coffee and increase our brand relevance with existing and new consumers, including many younger customers, which we believe will in turn, drive incremental visits to our restaurants.”
Dunkin’ Donuts said it would equally share net profits from sales of ready-to-drink coffee through outlets outside of its restaurants with qualified franchisees in the United States.
“We are an almost 100% franchised company, and our mission is to drive our brand relevance and to drive the profitability of our Dunkin’ Donuts franchisees,” Mr. Travis said. “Our research has clearly shown that ready-to-drink coffee consumption is a separate occasion from the purchase of our restaurant-brewed iced coffee. That same research also shows that having a ready-to-drink coffee product builds brand loyalty. We strongly believe that this product launch is good for customers and for our franchisees.”
Since 2012, Dunkin’ Donuts and Coca-Cola have partnered to serve Coca-Cola soft drinks, juices, enhanced waters and energy drinks at Dunkin’ Donuts restaurants in the United States and select international markets.The two companies will face a formidable foe in PepsiCo and Starbucks, whose partnership dominates the U.S. ready-to-drink coffee market with about a 75% share.