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The Spoon

Daily news and analysis about the food tech revolution

Dunkin

Dunkin’ Is Testing Delivery, Geofencing in New York City

Dunkin’ announced this morning it is now available for delivery in all five boroughs of New York City.

Dunkin’ is already in select cities in the U.S. through partnerships with Grubhub as well as DoorDash. For the NYC test market, Dunkin’ will be available exclusively through Grubhub and Seamless (Grubhub’s NYC-specific brand).

Grubhub isn’t a surprising choice here. In major urban areas — like NYC, LA, Philadephia, Boston, Chicago, and Washington, D.C. — the company is still the leader of third-party delivery when it comes to market share.

For the Dunkin’-NYC partnership, Grubhub will integrate orders directly into each store location’s POS system, a feature that’s getting more and more important with each new delivery partnership that surfaces.

But Grubhub didn’t stop there in terms of using technology to enhance the Dunkin’ deal. It also drew a geofence around each Dunkin’ location in NYC (there are over 400) in order to monitor traffic in surrounding areas and where couriers are in relation to the store making their order.

Seth Priebatsch, the head of enterprise at Grubhub, referred to this as “our ‘just in time delivery flow’” when he spoke to NRN this morning. Thanks to the technology, Dunkin’ will start a delivery order based on how far away the courier is and how large the order is. For bigger orders, Dunkin’ starts making an them when the courier is 10 minutes away; for smaller orders, the store will probably need just a few minutes to time an order with a courier’s arrival.

This geofencing method is something we’ll see more of as restaurant chains look to improve both timeliness and quality of their delivery orders. And Dunkin’ isn’t the first — McDonald’s already uses it, and Burger King pulled a well-publicized geofencing stunt late last year that wound up highlighting the value of the technology when it comes to attracting and retaining customers.

Packaging is the other aspect of the Dunkin’-Grubhub deal that bears noting. Grubhub said all couriers are equipped with insulated bags with which to deliver drinks, whether hot or cold. But it seems time and temperature are still the two major hurdles when it comes to coffee delivery, even for a chain as large as Dunkin’ (or, for that matter, Starbucks and Uber Eats). Even Priebatsch noted that Dunkin’ is currently trying to walk the line between serving a large delivery radius without making travelers go so far that the quality of the product gets diminished in the process.

While there was no news of Grubhub using anything beyond the standard insulated bag, packaging seems an areas ripe for disruption in food delivery, especially as as more and more goods like hot coffee and frozen smoothies go mobile.

The Coffee Bean & Tea Leaf Partners With Postmates for Delivery

Today, The Coffee Bean & Tea Leaf announced and kicked off an exclusive delivery partnership with Postmates at 180 company-owned Coffee Bean & Tea Leaf locations across California and Arizona. According to a press announcement, additional locations around the U.S. are planned “in the coming weeks.”

Delivery fees on orders start at $1.99. For customers of Postmates Unlimited, the company’s subscription service, the delivery fee is waived on orders over $15.

Southern California-based Coffee Bean & Tea Leaf joins a growing list of coffee retailers now delivering, usually via third-party services.

Starbucks already operates a delivery program via Uber Eats in certain U.S. markets. If you prefer the McCafe brand for your early-morning coffee needs, McDonald’s will deliver one through Uber Eats (though it recently bailed on its exclusivity contract with the service). Dunkin’, meanwhile, has been testing delivery since 2015.

Coffee has always been a bit of a tricky delivery item, largely because it’s historically been a hot, highly spill-able beverage. As one writer noted back in 2016, “Time and temperature seem to be the two biggest obstacles [to delivery] in repeating the experiences consumers have come to expect within the brick-and-mortar retail locations.”

Those were the days when ordering coffee for delivery meant getting a tepid drink wrapped three times over in cellophane. But times are changing. More and more tech around delivery operations and logistics has entered the restaurant industry over the last few years, as have business models like ghost kitchens, which typically only service delivery and could therefore speed up order fulfillment times. Starbucks, in fact, just announced it is testing ghost kitchens in China that could improve quality and timeliness on orders.

Plus, according to the National Coffee Association’s latest report, so-called non-traditional beverages like blended drinks, cold brew, and nitro coffee are on the rise, thanks to a higher demand for personalization and specialization from younger customers. Many (though not all) of these beverages are better suited to car trips than the old-fashioned cup of joe.

As drinks like these become more popular, and as technology gets cheaper and easier for restaurants to implement and the industry continues to innovate on packaging, tepid coffee in a paper cup could soon become a thing of the past.

Dunkin Donuts

Dunkin’ Is Taking Its Next-Generation Store to Texas and Beyond

Dunkin’ announced today a sizable expansion for 50 new locations outside the Northeast, the chain’s home region and where it’s historically held stores. The expansions will include elements of the chain’s next-generation store, which caters to mobile ordering, more modern design, and more espresso drinks.

In a press release, Dunkin’ said the new locations are part of an ongoing plan to open 200 to 250 new restaurants each year over the next three years. For this round, the company will head to Texas, Michigan, Southern Kentucky, Minnesota, Wisconsin, North Carolina, Nevada, and Missouri.

Notably, many of the planned expansions are with longtime franchisee groups. Even more notable is that with these deals, Dunkin’ will offer “flexible concepts for any real estate format,” according to the press release. Given that one-size-fits-all store redesign formats has been a point of friction for other restaurants (hello, McDonald’s), this flexibility could be a more rewarding way to go about expanding and redesigning.

Dunkin’s already made it clear to the world it’s trying to compete with other coffee-beverage brands (Starbucks, McDonald’s) with its next-gen concept store, which it launched at the beginning of 2018 in its hometown of Quincy, MA. The store, which has since made its way to other areas in the North, offers dedicated drive-thru lanes for mobile orders, on-tap (coffee) beverages, and delivery options with third-party companies like Grubhub.

Grant Benson, CFE, senior vice president of franchising and business development, indicated in the press release that new locations will offer those features, and that Dunkin plans to “capitalize on the momentum we experienced in 2018.”

That momentum is evident: same-store sales at Dunkin’ were up 2.4 percent in the first quarter of 2019, and CEO David Hoffman said this was the largest quarterly same-store sales gain in four years. He also noted it was the result of “technology advancements” (and espresso drinks).

Dunkin’ isn’t a totally foreign presence outside the Northeast; outposts like Dunkin’ Express are becoming more and more common at places like highway truck stops. But those are basically drip coffee and donut stations within an existing convenience store, and would only go so far when competing with the likes of Starbucks or McDonald’s. Expanding not just full-service locations but features of its next-generation concept would help give Dunkin’ a greater presence coast to coast, something it’s going to need if it wants to stay relevant.

What would really up the competition would be for Dunkin’ to adopt an AI strategy like the one McDonald’s just did when it acquired Dynamic Yield. While there’s no indication that such a deal is in the works, or even if AI is going to be that much of a competitive differentiator, it doesn’t seem out of the realm of possibilities as Dunkin’s next move.

The Dunkin’-Grubhub Delivery Deal Is Great News for Consumers, Bad News for Starbucks

Dunkin’, the chain formerly known as Dunkin’ Donuts, announced today it will begin testing a delivery program with Grubhub in select cities, NRN reports.

The delivery rollout follows a year of moves by the Quincy, Massachusetts-based chain to shed its former image as a donut chain and compete with premium coffee retailers, namely Starbucks. In January 2018, Dunkin’ unveiled its “Next Gen” store, which offers a more modern design as well as a dedicated drive-thru lane for customers placing mobile orders. Dunkin’ made itself available for order via Alexa in 2018, too. And the chain dropped “Donuts” from its name, doubling down on its efforts to focus the brand on beverages and not on its signature treat, frowned upon by nutritionists everywhere nowadays. (Fun fact: Dunkin’ Donuts is largely responsible for changing our spelling of the word from “doughnut” to “donut.”)

The chain also did a massive product relaunch of its espresso, reformulating the recipe and proclaiming their espresso, in the words of CMO Tony Weisman, “is so good, you don’t have to go to Starbucks.”

The Grubhub deal is non-exclusive, as Dunkin’ also partners with DoorDash and will continue to do so.

But as delivery continues to become the norm rather than the exception, there may well be fewer folks who want to go to Starbucks anyway. The Seattle coffee giant expanded its Uber Eats delivery program in January in San Francisco, and will continue rolling it out to major U.S. cities over the next several months. It’s also worth noting that Starbucks has significantly more locations nationwide, though Dunkin’ is slowly but surely expanding out of its New England home turf.

Delivery may well become the ultimate battleground for these two companies. Post espresso relaunch, Dunkin’ is, in my caffeine-riddled opinion, on par with Starbucks in terms of quality (and better sometimes). Starbucks has nicer interiors, but Dunkin’ has better prices. Both offer things like streamlined drive-thrus and easy-to-use mobile apps. So whoever can master the most efficient, cost-effective way to deliver these premium drinks is likely the one who will come out on top, at least in the short term.

Dunkin’ hasn’t yet released information about which cities it will deliver in with Grubhub, or when that’s slated to begin. But one thing’s clear: Quincy and Seattle are in lockstep right now, and their race for dominance will only get more heated as 2019 goes on.

Starbucks Expands Uber Eats Delivery Pilot Across U.S.

Starbucks this morning announced (via an email) it will expand the delivery pilot program it runs in Miami with Uber Eats to other U.S. cities. Starting today, the program is available in San Francisco, and will move to NYC, DC, Boston, Chicago, and Los Angeles over the next few weeks.

Starbucks has been testing out the delivery concept since 2015, when it launched a partnership in the U.S. with Postmates, which it has maintained over the last few years. Then, in 2018, Starbucks teamed up with Uber Eats in Miami to offer “favorite items that have been tested for delivery.” This latest round of cities is an expansion of that pilot.

For the Miami pilot, the caramel Frappucino has wound up being the most popular item ordered thus far. That isn’t surprising, since blended ice, sugar, and whatever else they put in those things will travel a lot better than a piping hot cup of black coffee (though fewer people probably want that in Miami anyway).

Which brings up a good point: hot liquids don’t travel well (duh). The times I’ve ordered coffee from the deli down the block, I’ve gotten a paper cup quadruple-wrapped in plastic cellophane containing a sort-of hot beverage. I’ve always blamed myself for being lazy enough to get coffee delivered in the first place. But if pricey coffee drinks become a standard delivery item, companies like Starbucks may need to think about more delivery-friendly packaging.

Still, I doubt packaging will deter people. The addition of Japan as a delivery market last year suggests the Starbucks-Uber Eats pilot is thus-far fruitful. Others — namely, Dunkin’ and McDonalds (also via Uber Eats) — are also jumping on the coffee-delivery trend, which will fuel more competition in the market.

Uber Eats, meanwhile, is ramping up its efforts across many areas of the food-delivery space. The company has been looking to use drones for delivery, and has exclusive partnerships with virtual (aka ghost) kitchens, too. While I speculate here, one could even imagine Starbucks and Uber Eats setting up a ghost kitchen to handle the influx of extra orders an expanded delivery partnership could bring.

Finally, the Uber IPO has been looming in the future for some time, though it, along with Lyft’s, are reportedly stalled at the moment due to the government shutdown. In any case, expanding a partnership in a space growing as fast as a delivery seems a well-calculated move for Uber Eats, right now and when that IPO eventually does happen.

How Starbucks’ “Greener Stores” Project Could Affect Other Coffee Retailers

Of all the details crammed into last week’s monster press release about Starbucks’ “Greener Stores” project, one in particular sticks out: that the coffee giant will open-source this new initiative in the hopes that other retailers will take similar steps to create “a new standard for green retail.”

Making retail greener isn’t a particularly new topic, but, on paper at least, the Starbucks Greener Stores plan certainly shows how much muscle Seattle is willing to put into the environmental side of its business. (That the company will save an incremental $50 million in the process over the next 10 years probably helps, too.)

For the project, Starbucks has partnered with the World Wildlife Fund. And over the next year, sustainability consulting firm SCS Global Services will audit all Starbucks-owned stores, existing and future, taking into account criteria like energy efficiency, noise control, air quality, and use of sustainable materials in building.

Some goals of the project include:

  • Using tech to gain 30 percent water savings and 25 percent avoided energy compared to old stores
  • Powering all stores with 100 percent renewable energy
  • Changes to lighting, air quality, and noise levels in stores
  • Building and/or refurbishing stores with sustainably sourced materials
  • Reducing waste
  • Create a “culture of sustainability”

“This framework represents the next step in how Starbucks is approaching environmental stewardship, looking holistically at stores and their role in helping to ensure the future health of our natural resources,” Erin Simon, Director of R&D at World Wildlife Fund, U.S., said in the press release “When companies step up and demonstrate leadership, other businesses often follow with commitments of their own, driving further positive impacts.”

All this follows Starbucks’ announcement from July that it will ban single-use plastic straws. The chain also operates 1,500 LEED-certified stores — more than any other retailer worldwide.

And yes, disposable coffee cups, whether plastic or plastic-coated paper, will probably lead to Armageddon at some point, but what this latest news from Starbucks highlights is that making the coffee industry sustainable has to do with a lot more than cups. From deforestation to coffee’s carbon footprint, the industry has a lot of issues to address if it wants to become truly sustainable at some point in the future. Which is why, while I tend to take company press releases with a gigantic grain of salt, it’s encouraging to see the world’s largest coffee retailer addressing the sustainability question from some of the less-discussed angles.

The question is, Can all this work on Starbucks’ part impact other major coffee retailers? With that in mind, here’s a quick look at what a few of the others are up to:

Peet’s Coffee and Tea. Since 2008, Peet’s has roasted all of its coffee in a LEED Gold-certified roasting facility in the U.S., located in Alameda, California. The roasters for the company’s recent expansion into China were even required to complete an apprenticeship at the Alameda facility. The company currently scores 41 out of 69 for the U.S. Green Building Council (USBGC), with particularly high marks around design innovation and indoor environmental quality (i.e., noise levels, air quality).

Costa Coffee. While it hasn’t yet made it Stateside, UK-based Costa has built “zero-energy” coffee shops that use sustainably sourced timber and rely on renewables like solar energy. Last year, it also opened an energy-efficient roastery, claiming it to be one of the world’s most sustainable industrial buildings. That includes a 249kw solar PV system for power and a rainwater harvesting system created to cut down on water use. Coke just acquired Costa for a reported $5 billion. With the deal set to close in 2019, we’ll have to wait and see what that means for Costa’s ongoing sustainability plans.

Dunkin’ Donuts. Meanwhile, America runs on foam cups, apparently, but that’s a problem Dunkin’ has vowed to do something about. In February of this year, the company announced its plan to phase out all polystyrene cups from its supply chain by 2020. Meanwhile, next-generation Dunkin’ stores are reportedly 25 percent more energy efficient than their predecessors, though actual numbers aren’t given. Dunkin’ also launched the DD Green Achievement in 2014, which helps franchises build more sustainable restaurants. The company says it plans have 500 DD Green Achievement stores in the U.S. by 2020.

Individually, none of these initiatives will make the coffee retail industry truly sustainable. And different companies have different priorities, not to mention varying budgets, which makes progress somewhat inconsistent across the industry. That’s where Starbucks’ new framework might actually provide some real guidance. Should it prove successful for the world’s largest coffee retailer, we may start to see a more standard set of practices around creating a more sustainable coffee culture.

Now if we could just figure out what to do about those darn cups.

Coffee Bean Launches Mobile Program With Uber Integration

Not to be outdone by Dunkin Donut’s next generation store that emphasizes mobile ordering, L.A.’s favorite coffee chain, Coffee Bean & Tea Leaf, just announced mobile ordering for select company-owned locations.

Like other mobile programs, Coffee Bean’s pay ahead ordering allows mobile customers to skip the line for their drink. Those who use the feature will earn extra Rewards points and have access to special discounts. As of today, the feature is available in 191 company-owned store locations around Southern California and Arizona. Coffee Bean plans to make the feature available to franchises and “new geographic areas” in the coming year.

One added bonus: the app is integrated with Uber. That means you can use the Coffee Bean Rewards app to both pay for your drink and order a ride to your preferred store location.

Taco Bell did a similar program with Lyft last year, allowing customers to make a detour to the nearest Taco Bell drive thru en route to their destination. The move was a complete disaster; many drivers were upset at being forced to sit in long drive-thru lines during peak traffic hours, for no additional compensation. Lyft eventually had to clarify that Taco Mode, as the program was dubbed, was optional for drivers.

Uber already has a rocky history in terms of its relationship to drivers. If drivers start tweeting about spilled lattes ruining their cars and long drive-thru lines, we may have another Taco Mode on our hands. Then again, coffee and fast-food burritos tend to serve different markets. At the risk of generalizing, bad smells and messy spills seem much more likely with a late-night crowd that wants fast food en route to the club, rather than someone on their way to a meeting who needs a caffeine jolt. So Uber may fare a little better with this deal.

Nation’s Restaurant News noted that mobile payments for restaurants have jumped 50 percent over the last year. So while it seems a bit late in the game for Coffee Bean to be joining the mobile ordering movement, it’s still an opportune time to do so. Plus, Coffee Bean customers tend to be fiercely loyal, which bodes well for the company, at least for this initial rollout.

 

Dunkin Donuts

Dunkin’ Donuts Mobile Customers Now Get Their Own Drive-Thru Lane

Last week, Dunkin’ Donuts cut the ribbon on its “next-generation concept store” in Quincy, MA. The site will act as a pilot store of sorts, where Dunkin’ can test out new store concepts and branding efforts before deciding to roll the changes out to more locations. The Quincy store opened about a mile away from the original 1948 Dunkin’ Donuts location. 

Besides dropping the “donuts” from the name out front, the biggest addition to the store is the dedicated drive-thru lane for mobile customers—that is, those who order ahead and pay through the Dunkin’ app.

It’s a potentially huge perk. Theoretically, at least, you could save a lot of time on the way to work by paying with your phone, bypassing half the other customers, and getting to stay in the car the whole time.

It’s also, as some have already suggested, part of a bigger strategy to become a true Starbucks competitor.

The strategy is not entirely new. In 2016, the company began featuring drinks like lattes and macchiatos in order to make espresso a bigger part of the business, attract younger customers, and compete with Starbucks. But Dunkin’ isn’t the only chain to have that idea: coffee beverage sales at McDonald’s and Burger King are reportedly taking a toll on afternoon sales at Dunkin’.

Meanwhile, the chain’s mobile program has lagged since its launch in 2016, making up only around 4 percent of the company’s total transactions. As a point of comparison, mobile now accounts for around 30 percent of Starbucks’ overall transactions.

If this increased investment in mobile is any indication, Dunkin’ is serious about catching up to Starbucks and, in the process, beating back competition from McDonald’s and Burger King.

In addition to its increased focus on mobile, the chain’s next-gen store also features a revamped design, bar-like taps pouring nitro- and cold-brew coffee, and several “healthier” snack options (i.e., bananas). The donuts, thankfully, aren’t going anywhere, even if they no longer get billing on the sign outside.

In-store, Dunkin’ on Demand will feature self-ordering kiosks, digital boards that track orders, and a dedicated mobile pickup area.The kiosks are slated for release in 2018. While the company hasn’t explicitly said so, the very idea of a store-as-concept-lab could possibly be another way to emulate Starbucks, who’s been using concept stores to test out new ideas in its home market of Seattle for some time. 

Will all this be enough to put Dunkin’ in true competition with Starbucks, or will it continue to straddle that weird line between coffeeshop and fast-food chain? There will be a lot of logistical pieces to manage, and the chain can’t afford any technological glitches or shortcomings with these changes. But if Dunkin’ can get those two pieces right, continue pouring quality brews, and maybe get a robot or two, it certainly stands a fighting chance.