Here’s How Dunkin’ Brands Is Increasing Focus On Product Innovation

Exciting and healthy new menu items with differentiated flavors and technology initiatives for efficient and more personalized service are likely to be the two key growth drivers for restaurant stocks in the coming years. Dunkin’ Brands (NASDAQ:DNKN) is ensuring that it is able to compete effectively on the menu innovation front with players such as McDonald’s and Starbucks, which are working aggressively on introducing innovative menu items. The company recently announced that it had appointed Kate Latimer has Vice President, Culinary Innovation who will lead the company’s “strategic development of new and enhanced menu choices.”  Ms. Latimer has more than 25 years of experience of which she spent two decades in PepsiCo where she was responsible for innovation and transformation of PepsiCo’s global beverage category.

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Proven Product Innovation Leader Can Help Create Competitive Difference

Dunkin’ Brands’ new innovation leader comes with a wealth of experience in creating and launching innovative next generation products including Pepsi’s first premium water, LifeWtr. A strong leader in the beverage innovation segment can prove to be a great asset for Dunkin’ Brands allowing the company to distinguish itself from other players by creating innovative beverages. We believe hiring a product innovation leader from PepsiCo is a positive strategic decision by the company given PepsiCo’s success in transforming its portfolio to meet customer expectations. With the millennial generation now becoming the highest spending segment in the U.S., beverage companies are focusing on the needs of this segment which leans towards healthy beverages and gourmet coffee. Products which are innovative and unique attract the attention of this generation leading to significant experiments by beverage companies such as “gourmet cold coffee” being piloted by Starbucks. Use of healthy ingredients and limited use of preservatives to attract millennials is another significant change which food and beverage companies are bringing about and an experienced leader with a proven track record can help Dunkin’ Brands better navigate this segment.  We believe Dunkin’s approach to build a strong management team in key focus areas should help the company drive growth in the long term.

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