Dunkin' Turns to a Chips Ahoy Doughnut
Dunkin' Donuts (DNKN) saw a spike in sales after introducing its own version of the cronut pastry last year, and now it's hoping that chocolate chip cookies will keep the good times coming. The country's largest doughnut chain has teamed up with Nabisco parent Mondelez International (MDLZ) to roll out a pair of Chips Ahoy-spiked doughnuts.
The Chips Ahoy Creme Donut is filled with cookie dough buttercreme and frosted with chocolate icing before being topped off with crumbled chocolate chip cookie pieces. The Chips Ahoy Crunch Donut is a traditional ring-shaped treat with the same chocolate icing and crumbled Chips Ahoy bits.
It's not the only products that Dunkin' Donuts is introducing this month based on Mondelez products. The iconic Oreo is also playing a major role here as iced coffees and Coolatta frozen beverages will be available in either Oreo or Chips Ahoy flavors.
Topping things off, the cookie takeover at Dunkin' is culminating in an online Cookie Dunk Instant Win Game where folks can go to CookieDunkGame.com to dunk virtual cookies in pursuit of prizes.
Filling Holes
Dunkin' Donuts doesn't usually incorporate popular brands into its menu. Outside of the seasonal Peeps doughnut that the chain introduced during Easter last year -- and, yes, we're talking about those very Peeps marshmallow chicks as chewy toppings -- Dunkin' usually likes to fly solo.
%VIRTUAL-WSSCourseInline-908%It's a strategy that's hard to question in light of the chain's success. There were 11,367 store locations by the end of March, up from the 10,901 units open a year earlier. It didn't need to team up with another company to put out a croissant doughnut, a premium-priced addition that it continues to credit for strong sales growth.
However, the name of the game these days is to partner up. We've seen Yum Brands' (YUM) Taco Bell turn to Doritos-dusted taco shells, Cinnabon-sweetened coffee, and even Starburst-flavored frozen beverages. Pizza chains that used to go it alone have turned to Fritos as toppings and Hershey-branded dessert treats.
There's strength in combination, even if it means licensing fees, higher food costs, or promoting someone else's product.
Sweet Rewards
The marriage of cookies and doughnuts -- and cookies and coffee -- makes sense. Dunkin' parent Dunkin' Brands should know. It also watches over an ice cream empire that includes 7,574 Baskin-Robbins scoop shops, even though we may never see an ice cream doughnut or a doughnut ice cream cake.
Dunkin' also has turned to big partners to broaden the reach of its signature coffee outside of its stores. Jelly giant J.M. Smucker (SJM) is its distributor, and it recently expanded its partnership with Keurig Green Mountain (GMCR) to get Dunkin' coffee sold in K-Cups for Keurig machines beyond just its doughnut shops.
This is the new normal for quick-service eateries. This is the new combo meal. That's not going to change, especially if rivals are doing it. And, yes, in case you were wondering, Dunkin' nemesis Krispy Kreme (KKD) is already offering an Oreo-branded "Cookies and Kreme" doughnut.
Two brands are apparently better than one.
Motley Fool contributor Rick Munarriz owns shares of Keurig Green Mountain. The Motley Fool recommends Keurig Green Mountain. Try any of our Foolish newsletter services free for 30 days. Check out our free report on one great stock to buy for 2015 and beyond.
