Dunkin' Donuts Teams With Coca-Cola on RTD Coffee Line
CANTON, Mass. — Dunkin' Donuts is entering the ready-to-drink (RTD) segment with a line of coffee beverages slated to launch next year.
The RTD lineup will be available at grocery, convenience stores and mass merchandisers, as well as at Dunkin' Donuts locations, across the United States. The Coca-Cola Co. will manufacture, distribute and sell the products.
The launch marks Dunkin' Donuts' first foray into the burgeoning RTD coffee category, which represents $2.3 billion in annual sales, according to Nielsen. The agreement also further extends the brand into new distribution channels.
"This new product introduction will increase consumption of Dunkin' Donuts coffee and increase our brand relevance with existing and new consumers, including many younger customers, which we believe will in turn, drive incremental visits to our restaurants," said Dunkin' Brands Group Inc. Chairman and CEO Nigel Travis.
Financial terms of the agreement weren't disclosed. Coca-Cola will produce the beverages according to Dunkin' Donuts specifications, including the use of high-quality Arabica coffee blends. Coca-Cola's extensive network of bottling partners will sell and distribute the beverages, which will include real milk and sugar in a range of flavors.
Dunkin' Donuts also said it would equally share with qualified U.S. franchisees its net profits from the sales of RTD coffee through outlets outside of its restaurants.
"We are an almost 100-percent franchised company, and our mission is to drive our brand relevance and to drive the profitability of our Dunkin' Donuts franchisees," Travis said. "Our research has clearly shown that ready-to-drink coffee consumption is a separate occasion from the purchase of our restaurant-brewed iced coffee. That same research also shows that having a ready-to-drink coffee product builds brand loyalty. We strongly believe that this product launch is good for customers and for our franchisees."
Dunkin' Donuts has teamed with Coca-Cola since 2012 to serve Coke products, including soft drinks, juices, enhanced waters and energy drinks, at its restaurants in the United States and select markets around the world.
Based in Canton, Dunkin' Donuts has more than 12,000 restaurants in 44 countries.