Why Dunkin’ Donuts Is Failing in India

Why Dunkin’ Donuts Is Failing in India

Dunkin’ is synonymous with breakfast
pretty much everywhere you go. There are more than 12,600 restaurants in 46
countries from Kuwait to Aruba. But there is one market where the
company is failed to capture national attention, India. As of 2018, it closed
more than half of its stores in just over two years, citing a lack of
profitability and operational efficiency. So what went so wrong for Dunkin’ in
India? To answer that let’s go back to 2012, when Dunkin’ launched its first
location. Dunkin’ granted exclusive franchising rights to Jubilant FoodWorks, the same franchisee that brought Domino’s Pizza to India, one of the top
restaurant brands in the country. Dunkin’ entered with its typical breakfast first
strategy and it braced for heavy traffic at the start of the day. But it didn’t
take long to figure out that Indians weren’t all that interested in the
American morning routine. The majority of Indian consumers don’t prefer to
grab-and-go their breakfast. They’d rather have a sit-down meal. Yeah
basically when you look at doughnuts. So basically when Dunkin’ Donuts came to India it’s it’s regarded as a breakfast for all the Western countries or
wherever the Dunkin’ Donuts have their outlets. But in India, it’s the consumer
preferences are totally different. So here, people you know they generally
prefer their local cuisine for their breakfast. And it wasn’t just the timing
of the offering, it appeared to be the menu itself. To be fair, Dunkin’ tried to
localize its offerings. It had custom doughnuts catered to Indian tastebuds,
like the mango doughnut. It had Lychee coladas. And for a brand that rarely
ventures outside its core product, Dunkin’ even rolled out a spicy sandwich lineup.
In an effort to localize its menu, this coffee loving brand even downplayed its
beverage branch of business, which accounts for about 60% of Dunkin sales.
Instead, it marketed its food to a nation that’s not exactly crazy about coffee.
But it wasn’t enough to help Dunkin’ shake its doughnut first reputation.
Dunkin’ was seen as more of a pastry shop and Indians didn’t want to start their
day with sweet baked goods. Doughnut is basically considered as a desert right and a desert which is a lot of other assortment added onto it so it’s a high
calorie assortment. And therefore, it’s more like a
luxury. It’s more like impulse kind of a purchase. Which you make if you are
celebrating or is there a special occasion or you know once in a while
Indians having a switch tooth would like to indulge in that kind of a purchase.
So Dunkin’ pivoted. It pushed it’s operating hours later, it rolled out its
Diwali doughnut, which touted savory flavorings like chickpeas, saffron and
chilly. But key Dunkin’s tweaked image, was actually to downplay the doughnut. So it tried something it hadn’t done before, burgers. With burgers, Dunkin’ was able to
get more foot traffic in and the non beef lineup was designed to appeal to
the country’s vegetarians. But making burgers the anchor product of the brand,
just appeared to dilute Dunkin’s image rather than help it. Decided advertising
on burgers rather than doughnuts. I’m gonna need to go global brand wind
doughnut in your name. You cannot say that we are not doughnuts than here’s something else, right? So that’s really against the basic rule of marketing, which is focus.
In a statement to CNBC, Dunkin’ Brands said that it finds it important to
include core Dunkin’ products alongside more regional menu items to cater to
local tastes. But Dunkin’ didn’t comment on its store closures in India. Another
potential misstep had nothing to do with the menu. Dunkin’ expanded too fast, its
locations were too big and those huge retail spaces translated into higher
operational costs. So when Jubilant FoodWorks announced plans to pare back more Dunkin’ shops in 2018, it came as little surprised that its new plan was
to focus on small stores and kiosks. But keep in mind, Dunkin’ isn’t alone in its
struggle with the doughnut. Dunkin’s main doughnut rivals, Krispy
Kreme and Mad Over Donuts, entered the market within a few years of one
another and at first things were pretty great. Doughnuts were initially a hit
when they were first introduced into the Indian market. The young population which was more acceptable to American tastes and culture. And so for them it was the
issue of novelty and therefore, doughnut market saw a surge in the in
in the Indian, you know, subcontinent and we had Dunkin Donuts, which entered the
market at that point of time and we all know the drive, right? From 22 stores, they reached up to 77 stores in 2017. Which was the peak of Dunkin Donuts in India.
But Aggarwal said that the donuts popularity has started to stagnate and
now the doughnut chains of India are feeling the pressure. The doughnut is
struggling. It’s not just Dunkin’ and Krispy Kreme. There have been declining
sales across doughnuts for quite some time. Not just in India but if doughnuts
were working they would be Dunkin’ Donuts doughnuts but they’re now just
Dunkin’. And so that’s if it’s not working here, it’s it’s certainly not working in
India. That precipitous fall in the popularity of the doughnut is partly to
do with the more health-conscious India. India’s becoming a very health conscious
market, right? So people are moving away from sugar and salty food and looking
for more healthier options. So that’s one of the reasons why I feel that the sales
have kind of stagnated. But even though Indian consumers are
looking for healthier foods, some desert chains in the country aren’t struggling
like Dunkin’. In fact, one of Dunkin’ Brands other businesses, Baskin-Robbins, is
killing it in India. Baskin-Robbins which is franchised in India by Graviss Group,
has more than 725 stores in the country and claims to be the largest ice cream
chain in India. So if Baskin-Robbins and Dunkin’ are two fruits from the same tree, then why is one doing so much better than the other in India. Euromonitor says
it’s because Baskin-Robbins focused on its signature product, ice cream. And
according to a Mintel report, the ice cream industry is heating up in India.
Mintel estimates that in 2021 657.2 million litres of ice cream will be
purchased in India. But doughnuts well they’re just not a favorite for the
adult Indian consumer. So Dunkin’s big problem in India seems to have more to
do with the fact that it’s failing to give Indian consumers what they’re
looking for and less to do with any mistake made by either Dunkin brands or
Jubilant FoodWorks. Take Dunkin’ Brands, the company in the United States is by
no means failing. The company has seen a steady grow than revenues over recent years. The Indie market isn’t biased against
international companies, more specifically, Dunkin’ Brands because
Baskin-Robbins has seen such success in India. And Jubilant FoodWorks, which
franchises Dunkin’ in India, also franchises Domino’s Pizza, one of the
most popular brands in the country. It’s also not the first time an international
Dunkin franchise agreement has flopped either. Dunkin’ has tried and failed to
enter China twice. And in 2015 it decided to step back in a third time with a
better understanding of what Chinese consumers want and an ambitious goal to open 1,400 restaurants. So will Dunkin’ in India have the same story as Dunkin in
China? or will it be able to turn things around? Experts say it’s certainly worth
trying. With the population size second only to China, India is thought of as the
last great battleground for international fast food rivals. Only
about three percent of all food service establishments there are chained. In
Western markets, it’s over 50 percent. So if you’re looking to capture market
share in the U.S., you have to take it away from somebody else. But if you enter
India in the right way, with the right formula, there’s tremendous potential
upside. And reducing store sizes is part of that formula. For the U.S. store, they
have been reducing their sizes, store sizes, which which is the same strategy
which was being followed by Mad Over Donuts or Krispy Kreme. The brand
slashed unprofitable stores and instead started focusing on small kiosks to sell
their products. And remember how they basically ignored their beverage unit
when first entering the country, that’s not happening anymore. They’re planning
to introduce more teas to their menu to cater to Indian. Tastes they’re probably
better off on the hot beverage focused side of it than trying to localize
the menu to get away from it being donuts. So yeah, Dunkin’ in India has had to overcome a lot upon entering the market and it
still does. But by adding tea based beverages to their menu and offloading
unprofitable stores for kiosks, Dunkin’ may be able to save itself in India
after all.

85 thoughts on “Why Dunkin’ Donuts Is Failing in India

  1. I suggest they start selling beef patties for breakfast in India. Also perhaps pork buns in Pakistan. This is the best way.

  2. Indians have variety of options and even at fraction of donut cost. I will prefer aalo pratha. And paneer prantha like a king 😁

  3. Who would love to eat sweet as a breakfast… The main reason for failure is the price and the type of meal.. Indians see this as a snack and they feel like to eat once in a while.. If donut is my breakfast for one week I would certainly not eat even for one day.. For $0.40 cents I ll get a nice and healthy meal In bangalore even though it considered as 3ed expensive city in India..

  4. Its simple. Indians don't like to eat sugary and highly processed garbage to start their day. We have healthy hot breakfasts and a wide variety of it. I live in US and never once have I had this sugary poison pill.

  5. PRICE
    Price is what what killed it, no one will spend 199 for a tea because we Indians know the value of things even before having it and if it's worthy we'll have it daily.

  6. Donuts as breakfast? Then it's unhealthy breakfast. I prefer meals. Well, here in the Philippines, doughnuts is still popular because in 3pm we have called merienda, the time when we usually eat sweets.

  7. In the land of diverse sweets selling donuts is a stupid idea. And who would eat sweet suger bun as a breakfast everyday 😒

  8. Maybe if they drop there price
    199 for a cup of tea
    In 199 we can have full course meal twice
    And open there outlets in local markets

  9. some of the funniest things i heard for first time in my life :
    did they jjust said
    3:05 when donut is in your name, you cannot say no we are not donut we are something else.
    4:40 The donut is struggling.
    4:50 If donuts were working they would be dunkin donuts donuts.
    5:56 Icecream Industry is heating up in India

  10. Let's start a Dunkin donuts over and India. But the good news is we're not gonna sell donuts were going to sell hamburgers and switch our whole business up.

  11. What not to sell in countries
    Americans & European : Spices
    Arabs : Alcohol
    African : Drugs
    Pakistan : Bombs
    India : Donuts

  12. The thing is, if the product is trendy, it catches on in the market. While Starbucks is a normal coffee store in US, it is a style statement. India has a wide variety of foods that go from spicy, salty, sweet. I bet there is an alternative to a Doughnut, somewhere in India. I have had food in different countries and what I can say is, the environment heavily affects the taste of the product. What might be a seller in one country, might not work in another, unless you make it a style – statement. And then there is that compulsion to make products that are necessarily vegetarian. So if you have been adding eggs in your Doughnut, it won't stick. India, as a market, has challenges that might not affect many western countries. You have to be very careful what you are serving because one wrong step and you could be being insensitive to 100s of millions, in one country alone.

  13. Hahaha a nation not crazy about coffee? Lol you kidding me tea, chai and coffee is everything. Sure lattes and espresso aren’t

  14. I'm really surprised to know that Dunkin Donuts is a breakfast item. I always saw it as an alternative bakery.
    Did they even do any market study before entering India?

  15. well coz whichever type of donuts u order in your assorted donut box , one bite n they all taste the same. it's nothing but sugar .. we Indians are used to the rich creamy taste of barfis, laddoos, pedas, . donuts are nothing compared to those sweets. not to mention the prices of these sugar syrups

  16. Lmao I can just have a rasmalai for 20 rs if I feel like spending much on sweets. I can't even imagine the assortment of sweets we Indians have. Each as good as the other. (Though kaju katri rules!!)

  17. The problem is you are introducing a “convenience” to an extremely established culture. The natives of every land know their “convenience” better than any outsider.

  18. In US, dunkin is so affordable. $1 for a donut but in India its 70-80 rs which is equivalent to $1 but in that money you can get a good burger elsewhere

  19. It would do better if it was marketed as a snack rather than a breakfast. They need to make Indian coffee and chai (Indian Tea). They also need to make doughnuts with Indian sweet flavours (ladoo or kajoo cashew for example) just like how Domino's did but with Indian spicy food flavours.

  20. Donuts sold here are over-sweetened. Forget the breakfast, the majority of the Indians won't even have them anytime during the day. Also, sweets made from milk are much preferred here.

  21. West does not understand India. They underestimate India. They think we do not any food. We do not know to make food. I think west should first study about aour food andnd culture. We have thousands of foods. We need not western food.

  22. Who will take tea of INR 200 when we can get it in INR 5,it's not entirely about health consciousness or food behaviour, it's all about price tag. Just reduce it significantly for a day and See yourself 😉

  23. In nepal they would have more sucess because donouts are already a favourite dish among nepali tibetans mongolians and newari population .

  24. My uncle had a dunkin doughnut store in india when it’s was new in india it didn’t work then he sold the shop

  25. I live in Japan and I never really thought about it, but I don't think I've ever seen a Dunkin Donuts here. I've seen Baskin Robbins a few times and they always seem really popular, but never a Dunkin.

  26. Their r like 1000 DIFFERENT incredibly tasty food cousine avelable in India ….this country is having so much to offer from vada Pau to extraordinary thali.. What will make India have donuts… I mean every 150 km religion,food,language,coustumseven clothing changes .

  27. Americans eat donuts for breakfast?
    Man, i dont know how America became so developed when they all have to share just one brain cell.

  28. Everything that doesn’t fail in the world, fails in India. Apple, dunkin’ donuts, starbucks etc.

  29. *I will try to help you…. *

    First of all, no one for sure is going to buy tea for 200rs. You have to do something about it. Than I afraid the problem is in the very core… THE DONUTS. Indian are really not into donuts or anything sweet in the morning. Rather than focusing on morning breakfast focus on evening and night time. If you do some research you would know almost all McD and Dominos store were empty in the morning. All this franchise make the most profit at evening in India by the teens. Maybe try to sell Ice-Cream on donuts or something. India loves Ice-Cream because of heat.

  30. Okay hold up. The donuts are not hand made. There frozen and then let to defrost then bake. We never fry donuts. I used to work for Dunkns.

  31. donuts taste horrible. I am a rasgulla jalebi lover but I have to say with sweetness u gotta have taste too. Donuts are just tasteless hard too much sweet Gulab jamuns.

  32. No Indian will eat donuts in the breakfast if they have even 1 Indian option. There are like a hundred breakfast options in India . Dunkin Donuts must be crazy to be optimistic of their sales in India.

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