Dunkin' Donuts

Duncan 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 has failed to capture national attention, India. As of 2018, it's 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 Duncan india? To answer that, let's go back to 2012, when Duncan launched its first location. Duncan 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. Duncan entered with its typical breakfast-first strategy, and it braced for heavy traffic at the start of the day. But it didn'take long to figure out that Indians weren't all that interested in the American morning routine. The majority of Indian cons They'd rather have a sit-down meal. Yeah, basically when you look at donuts, so basically when Duncan donuts came to India, it's regarded as a breakfast for all the western countries or wherever the Duncan donuts have their outlets. But india, the cons So here people, And it wasn't just the timing of the offering. It appeared to be the menu itself. To be fair, Duncan tried to localize its offerings. It had custom donuts catered to Indian taste buds It had lychee kooladas. And for a brand that rarely ventures outside its core product, Duncan 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 Duncan'sales. Instead, it marketed its food to a nation that's not exactly crazy about coffee. But it wasn't enough to help Duncan shake its donut-first reputation. Duncan was seen as more of a pastry shop, and Indians didn't want to start their day with sweet baked goods. Donut is basically considered as a desert, right? And a desert which has a lot of other assortments added on to it. So it's a high-calorie assortment. And therefore, it's more Or once in a while, Indians having a sweet tooth would So Duncan pivoted. It pushed its operating hours later. It rolled out its Diwali donut, which touted savory flavorings But Keta Duncan's tweaked image was actually to downplay the donut. So it tried something it hadn't done before. Burgers. With burgers, Duncan 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 Duncan's image rather than help it. We started advertising on burgers rather than donuts. I mean, when you go global brand when donuts in your name, you cannot say that we are not donuts and we are something else. So that's really against the basic rule of marketing, which is focus. In a statement to CNBC, Duncan Brand said that it finds it important to include core Duncan products alongside more regional menu items to cater to local tastes. But Duncan didn't comment on its store closures india. Another potential misstep had nothing to do with the menu. Duncan expanded too fast, its locations were too big, and those huge retail spaces translated into higher operational costs. So when Jubilant Food Works announced plans to pair back more Duncan shops in 2018, it came as little surprise that its new plan was to focus on small stores in kiosks. But keep in mind, Duncan isn't alone in its struggle with the donut. Duncan's main donut rivals, Krispy Kreme and Madover Donuts entered the market within a few years of one another. And at first, things were pretty great. Donuts 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, donut markets saw a surge in the Indian subcontinent. And we had Duncan Donuts which entered the market at that point of time and we all know that right from 22 stores, they reached up to 77 stores in 2017, which was the peak of Duncan donuts india. But Agarwal said that the donut's popularity has started to stagnate, and now the donut chains of India are feeling the pressure. The donut is struggling. It's not just Duncan and Krispy Kreme. There have been declining sales across donuts for quite some time. Not just india, but if donuts were working, they would be Duncan Donuts, but they're now just Duncan. And so that's, if it's not working here, it's certainly not working india. That precipitous fall in the popularity of the donut is partly to do with the more health-conscious India. It'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 cons In fact, one of Duncan's brands, other businesses, Baskin Robbins, is killing it india. Baskin Robbins, which is franchised india by Gravis Food, has more than 725 stores in the country and claims to be the largest ice cream chain india. So if Baskin Robbins and Duncan are two fruits from the same tree, then why is one doing so much better than the other india? Euro Monitor 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 india. Mintel estimates that in 2021, 657. 2 million liters of ice cream will be purchased india. But donuts? Well, they're just not a favourite for the adult Indian cons So Duncan's big problem india seems to have more to do with the fact that it's failing to give Indian cons Take Duncan brands. The company in the United States is by no means failing. The company has seen a steady growth in revenues over recent years. The Indian market isn't biased against international companies, more specifically, Duncan brands, because Baskin Robbins has seen such success india. And jubilant foodworks, which franchises Duncan india, also franchises Domino's Pizza, one of the most popular brands in the country. It's also not the first time an international Duncan franchise agreement has flopped either. Duncan 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 cons So will Duncan india have the same story as Duncan in China? Or will it be able to turn things around? Experts say it's certainly worth trying. With a population size second only to China, India is thought of as the last great battleground for international fast food rivals. Only about 3% of all food service establishments there are chained. In Western markets, it's over 50%. So if you're looking to capture market share in the US, 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 newer stores, they have been reducing their store sizes, which is the same strategy which was being followed by Madover, 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 taste. 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. But by adding tea-based beverages to their menu and offloading unprofitable stores for kiosks, Duncan may be able to save itself india after all. Thank you.