Dunkin’ Donuts Hopes Dixie Will Dump Krispy Kreme

When asked how he got his own Dunkin’ Donuts store, Joe Rando holds up the afternoon cup of coffee he’s just poured for himself.“Lifelong Dunkin’ fanatic,” he said.When the Maine native moved South with his former company to the Nashville area a couple years ago, he found he had to do without his favorite treat. “I sort of woke up one morning and said, ‘There aren’t any Dunkin’ Donuts here. Why is that?’ So I made a phone call,” Mr. Rando said.From its first store in Quincy, Mass., Dunkin’ Donuts has become the quintessential Northeastern doughnut shop, with working-class credentials and obsessive customers.But now the Canton, Mass.-based chain plans to expand south and west across the country, and that has America wondering: Will Southerners, with their long-standing love of Krispy Kreme Doughnuts Inc.’s sugar-glaze, find room for another doughnut?Mr. Rando is in charge of 12 Nashville-area stores that will serve as a prototype for the company’s expansion, testing everything from new products to store appearance.Dunkin’ Donuts currently has about 4,400 stores in 36 states, but the majority are in the Northeast and mid-Atlantic region. (There are another 1,700 international Dunkin’ Donuts stores in 29 countries.) Company executives hope to triple the total number of American stores by 2020.But parent Dunkin’ Brands Inc. is invading the South with a different sort of doughnut — thicker and cakier than the traditional Southern treat from Krispy Kreme, which is lighter, sugarglazed and served hot.Stan Parker, senior vice president of marketing for North Carolina-based Krispy Kreme, said many Southerners have grown up with their doughnuts and think of a trip to Krispy Kreme as more than just breakfast or a snack. “For many people, Krispy Kreme has been part of their lives for a long time,” he said.Josh Owens, an equity analyst who follows the restaurant industry for Morningstar Inc. in Chicago, said Krispy Kreme is still a relatively small chain compared to Dunkin’. “Dunkin’ Donuts has a reasonably strong brand. It’s a brand a lot of people are familiar with. It’s not necessarily going to have the fad element that Krispy Kreme had with its expansion,” he said.Krispy Kreme went public in 2000 and became a national sensation as it expanded across the country. Its stock price and profits climbed rapidly, but then crashed in 2004.Krispy Kreme executives at the time blamed the low-carb craze for declining sales, but the company had serious problems — it faces shareholder lawsuits and investigations alleging it engaged in faulty accounting — and analysts said it grew too fast. Krispy Kreme Doughnuts Inc. recently hired two former tobacco executives who are expected to help the company clear some of its problems.Dunkin’s coffee may be more important to its business prospects than its cakey doughnuts. While Starbucks Corp. leads the growing $11 billion industry, there’s still plenty of room, Mr. Owens said.Dunkin’ Donuts’ blue-collar customer base varies so much from the more upscale patrons at Starbucks that the two companies practically operate in separate markets, he said.Dunkin’ Donuts believes some of its other products — bagels, breakfast sandwiches, cookies, flavored coffee — will attract Southern customers, even if they stay loyal to Krispy Kremes.

Dunkin’ Donuts Hopes Dixie Will Dump Krispy Kreme

Dunkin’ Donuts Hopes Dixie Will Dump Krispy Kreme

More from the New York Sun

Execution of Fort Hood Killer Nidal Hasan Will Be Public, Pete Hegseth Says

Justice Department Adds Torture Charge to Maduro Indictments as Judge Denies Bail to Dictator’s Wife

Country Music Star Ella Langley’s Deer Hunt Puts Her in Liberal Haters’ Crosshairs

Disgraced Royal Pulls Off Stunning Legal Victory, Thrusting King Charles Into Excruciatingly Awkward Position

Guilfoyle Faces Possible Probe After Trump Donor Claims She Begged Him for $100,000 To Pay American Express Bill

Republicans Divert Nearly $2 Million To Save One of Trump’s Favorite Senators in a Contest She Shouldn’t Be Losing

Trump Goes To War for Peace Prize: President Vies With Carney, Pope, and Greta

Michael Douglas: A Hollywood Antihero’s Bumpy Ride

More from the New York Sun

Execution of Fort Hood Killer Nidal Hasan Will Be Public, Pete Hegseth Says

Justice Department Adds Torture Charge to Maduro Indictments as Judge Denies Bail to Dictator’s Wife

Country Music Star Ella Langley’s Deer Hunt Puts Her in Liberal Haters’ Crosshairs

Disgraced Royal Pulls Off Stunning Legal Victory, Thrusting King Charles Into Excruciatingly Awkward Position

Guilfoyle Faces Possible Probe After Trump Donor Claims She Begged Him for $100,000 To Pay American Express Bill

Republicans Divert Nearly $2 Million To Save One of Trump’s Favorite Senators in a Contest She Shouldn’t Be Losing

Trump Goes To War for Peace Prize: President Vies With Carney, Pope, and Greta

Michael Douglas: A Hollywood Antihero’s Bumpy Ride