Dunkin' Donuts Franchise Owners Resisting Price Hikes on Bagged Coffee
BELLINGHAM, Mass. --(BUSINESS WIRE)-- 97% of Dunkin' Donuts franchise owners responding to a recent survey say they have not raised the prices of 16 ounce bags of Dunkin' Donuts coffee even though the cost for coffee beans has reached a 13 year high. J.M. Smucker Company, which sells Dunkin' Donuts licensed coffee at supermarkets and other retail outlets, announced it has raised prices by 9%.
"Even as Smucker's is increasing the cost of a 12 ounce bag of coffee, the majority of Dunkin' Donuts franchise owners say they would rather absorb the increases than charge their customers more for a full pound," said Jim Coen, President of the Dunkin' Donuts Independent Franchise Owners (DDIFO www.ddifo.org).
The 2007 deal between Dunkin' Brands and Smucker's to sell 12 ounce bags of Dunkin' Donuts coffee at supermarkets and other retail establishments created consumer confusion because the Smucker's product is packaged differently and is not the same coffee that is brewed in Dunkin' Donuts stores. All Dunkin' Donuts stores are owned and operated by independent franchisees who have the flexibility to set their own prices for beverages and other products.
186 franchise owners representing 1650 Dunkin' Donuts shops in multiple states responded to the survey which asked whether they had raised prices for brewed coffee or bagged coffee. 95% said they had not raised prices for a cup of coffee. The survey was conducted by the DDIFO which represents the largest association of Dunkin' Donuts franchise owners in the U.S.
As a result of the jump in commodity prices, other retail coffee companies have announced price increases in the last month including Starbuck's, Peet's and Green Mountain Roasters.
With the holiday season approaching, many Dunkin' Donuts franchise owners say they will offer lower prices for purchases of two or more one-pound bags of Dunkin' Donuts ground coffee and whole beans.
"Many people enjoy giving the gift of Dunkin' Donuts coffee during the holidays and our franchise owners are responding with special pricing even as coffee costs are going up. This is one of the reasons why Dunkin' Donuts has been such a successful business for 60 years," said Coen.