Dunkin’ Brands Versus Starbucks: Numbers Don’t Lie

I pledge allegiance to Dunkin' Brands Group (NASDAQ: DNKN  ) , owner of the always-tasty Dunkin' Donuts. I'm not a coffee drinker (I opt for Bing energy drinks by Petey's.) But I love vanilla-frosted-with-sprinkles and chocolate-glazed donuts from Dunkin' Donuts. These visits are rare but always a treat. It's likely that your visits to either Dunkin' Donuts or Starbucks (NASDAQ: SBUX  ) are more frequent considering Americans have a love affair with coffee.

You will find many interesting stats below, including what percentage of Americans visit Dunkin' Donuts and Starbucks, how often loyalists to each brand visit each month, how often Dunkin' Donuts and Starbucks fans talk about the opposite brand on social media sites, and what type of people are most likely to frequent Dunkin' Donuts and Starbucks. 

Atmosphere and price
Before we get to the numbers, each brand's trademark offerings should first be established. 

When you visit a Starbucks, you will pay more for a coffee that's the same size as a coffee sold by Dunkin' Brands. You're paying for the experience, a different taste (not necessarily better; this depends on the consumer), and even the fancy names, such as tall, grande, venti vs. small, medium, large at Dunkin' Donuts.

In regards to experience, Starbucks offers a very clean, spacious, and comfortable atmosphere. It was the first coffee shop to offer this type of upscale atmosphere with Wi-Fi included. This led to droves of consumers frequenting Starbucks locations. Considering that people tend to stay at Starbucks for longer periods of time than Dunkin' Donuts, Starbucks is able to sell more products. For instance, if you're working on a project on your laptop and it takes three hours, you're likely to go for a refill or a snack.

Dunkin' Donuts recently attempted to offer the same approach. There has been some traction, but it would take a long time for Dunkin' Donuts to be seen in the same light as Starbucks when it comes to atmosphere. This potential is also likely to be limited, which stems from Dunkin' Donuts attracting a more middle-income consumer who is less likely to work on a laptop while drinking coffee. 

Predicting your favorite coffee haunt
According to Truelens.com (a company that helps Fortune 500 companies understand and communicate better with customers), Dunkin' Donuts is most likely to attract social moms, sports fanatics, and family travelers. As stated above, it's also more likely to attract middle-income consumers. Starbucks, on the other hand, is most likely to attract college students, music enthusiasts, early adopter explorers, and higher-income consumers.

One of the most interesting stats for a Truelens.com study of 9 million public online expressions from Dunkin' Donuts and Starbucks is how much loyalists for each brand discussed the opposing brand when talking about coffee brands.

According to the study, Dunkin' Donuts loyalists discussed Starbucks coffee 59.2% of the time They discuss McDonald's (NYSE: MCD  )  coffee 16.3% of the time, Dunkin' Donuts coffee 14.4% of the time, Keurig 7.2% of the time, Krispy Kreme Doughnuts  (NYSE: KKD  )  coffee 2.2% of the time, and Caribou Coffee 0.6% of the time.

Starbucks coffee drinkers don't appear to be as obsessed with Dunkin' Brands coffee. When discussing coffee brands, Starbucks coffee drinkers talk about... Starbucks -- at a whopping 87.9% of the time. They talk about McDonald's coffee 6.7% of the time, Dunkin' Donuts coffee 2.4% of the time, Krispy Kreme coffee 1.4% of the time, and Keurig 1.3% of the time.

Based on these stats, it appears as though Dunkin' Donuts coffee drinkers might be experiencing some jealousy toward Starbucks' popularity.

Dunkin' Donuts coffee drinkers talk about iced coffee three times more than Starbucks coffee drinkers. Starbucks didn't miss out on the popularity of iced coffee, pushing its iced coffee brand to retail distributors earlier this spring. Starbucks also picked up on the fact that its followers are twice more likely to discuss alcohol than the general population. Logically, Starbucks launched its Starbucks evening campaign, offering beer and wine.

Up until this point, it would seem as though Starbucks is the coffee leader. That would be an accurate assessment, but Dunkin' Donuts loyalists do discuss breakfast menu items three times more than Starbucks loyalists, indicating that Dunkin' Donuts is making more progress on the menu expansion side.

Speaking of expansion, Dunkin' Brands is also expanding West, and based on early results, it's likely to see success. For more on this topic, you can read: "Dunkin' Brands Offers Significant Growth Potential." Now for more interesting numbers. 

Loyalty test and visit frequency
According to a study done be Experian, 11% of Americans go to Dunkin' Donuts. That's impressive. However, 13% of Americans go to Starbucks. Once again, whatever Dunkin' Donuts can do, Starbucks can do better. Additionally, 33% of Dunkin' Donuts consumers also go to Starbucks, whereas 29% of Starbucks consumers also go to Dunkin' Donuts.

In regards to frequency, Starbucks consumers are more likely to visit more times per month:

 

Less Than One Visit Per Month

1-5 Visits Per Month

6-13 Visits Per Month

14+ Visits Per Month

Dunkin' Donuts Loyalists

20%

64%

10%

6%

Starbucks Loyalists

16%

63%

15%

6%

The bottom line
Dunkin' Brands is a strong company with great growth potential thanks to its expansion into new markets, especially the Western United States where it has very limited exposure. However, at the moment, Starbucks remains the clear leader in the coffee wars. 

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  • Report this Comment On December 10, 2013, at 8:22 AM, crystalkelly wrote:

    No jealously over Starbucks and I have never been to a spacious Starbucks in my life besides the basement level of Macy's in downtown Chicago.

    Dunkin' is still working on renovating locations, nearly all the stores I have been too have been remodeled and are spacious with the exception to the micro locations like at the train station(s) and Midway Airport.

    It wasn't until this year that Dunkin' finally got a rewards program together (which I have yet to look into) - I've been waiting for years for a such a program.

    Now my tastes have changed toward tea and I no longer drink coffee. Starbucks does offer a larger tea line - so admittedly Starbucks has been getting more or my visits lately.

    Starbucks should be watch it's back - Dunkin' loyalists are obsessed. Dunkin' needs a tea line, like quick.

  • Report this Comment On December 18, 2013, at 10:16 PM, analyzerlx wrote:

    I prefer Starbuck's coffee over Dunkin Donuts. I live south of Boston and there seems to be an irrational local love affair with Dunkin Donuts. My wife and I prefer Mary Lou's coffee to Dunkin's coffee, the only reason I can see why Dunkin does so well is that they have saturated the region making it more convenient for workers to grab a coffee and donut before heading off to work. When it comes to donuts, I would have to say that I wish Krispy Kreme can come back and also to have Tim Horton's expand down here.

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