Dunkin Donuts – The coffee and baked foods giant headquartered at Massachusetts, USA is all set to be the next international food and beverages giant to enter India. Along with the usual coffees it offers, Dunkin has a stronghold over baked products like Muffins, Donuts, Pastries, Brownies etc. And this is where it could hold the difference in the Indian market. It is in talks with Jubilant Foodworks who run the Dominos India franchise to enter the Indian market.
So why has it really entered the Indian market? Aren’t there many players already in this segment with the Indian ones like Café Coffee Day and the foreign ones like Costa, Aromas, Starbucks etc? What is going to be the differentiating factor of Dunkin? What will be its growth strategy – mass or high end?
According to recent reports the café segment is over Rs. 2000 cr currently and growing in leaps and bounds. Though the primary component from which a café earns its revenue is the coffee they brew, foods like sandwiches, donuts etc. are slowly becoming money spinners too. Café Coffee Day and Barista are the two Indian chains who cashed in on the café culture in India many years ago. And they have the advantage of understanding the Indian consumers’ tastes and preferences and also source their beans locally.
With rising disposable incomes, per capita income and spending capacity, how could the international food giants stop themselves? Yes, the Indian rules which don’t allow a foreign company to enter the country without the help of an Indian company did create a problem. But nonetheless Costa and Aromas have entered the country. Starbucks is all set to enter soon. And you also have some localized chains like Chocolate Room India who try to be different saying that they offer everything made out of Chocolate.
In this scenario it does make sense for Dunkin to enter the country. Because over and above all this, its Starbucks largest competitor in the US. But the question is “Will it bring its baked products here too?” Since baked products which are from an established chain is still not really consumed that much in the country, it could be a problem.
You don’t often see any of the big outlets selling you muffins or donuts. But then on the other hand Dunkin could use that to position itself differently. The international baked foods giant enters India! That does make for some pleasant hearing for the people they target.
But then I read in one of the news article, that Dunkin Donuts they are planning for a mass marketing strategy. An international food giant with a mass marketing strategy doesn’t really make so much sense. When Café Coffee Day and Barista know the Indian market so well and people still prefer them because of their price and efficient targeting of the Indian consumers, why would someone prefer an international brand? And moreover an international brand is always preferred as expensive, premium and not in the normal person’s reach / grasp.
If they really go for a mass marketing strategy they will have to build that into their communication from day one. If they use a mass marketing strategy, they will have to open their stores mostly in high street formats or malls. This makes me wonder how they will tackle competition from the other Indian brands.
And if they offer the regular coffees, I wonder what will be different about them. That’s why I feel they have the chance of building the baked foods segment in the country which currently is pretty disorganized.
Do you think Dunkin will be successful in the Indian market?