Dunkin’ recently announced a partnership with Grubhub to begin delivering the company’s food and beverage products to consumers. Dunkin’ will begin servicing the New York area from more than 400 stores and restaurants, before branching out to other markets, such as Boston, Chicago and Philadelphia. According to Dunkin’ Vice President of Marketing, Stephanie Meltzer-Paul, the rollout to other markets will take place in the next few months. And the company has plans to begin delivering to more than 3,000 locations nationwide, which represents about a third of the current 9,400 U.S. Dunkin’ chains.
With 12,000 locations in 36 countries, the Grubhub deal could be the start of a profitable trend for the coffee and donut conglomerate. Last year, Dunkin’ announced an investment of over $100 million in order to rebrand the chain. And earlier this year, the company officially dropped “Donut” from its name and became Dunkin’, which most people used anyway. It’s been a proven success with other companies, such as FedEx, which used to be Federal Express before shortening its name in 2000.
In 2018, Dunkin’ reported revenue of $1.32 billion, and the same year, Grubhub had revenue of $1.7 billion and a net income of over $98 million. As of the first quarter of 2019, Grubhub has more than 19 million active users for delivery service and the company delivers to over 115,000 restaurants throughout the United States.
Dunkin’ is planning a major push with its delivery service without any hesitation. The company discretely began testing the delivery service last year, after approaching Grubhub for using its business model for select stores throughout New York City, Boston and Philadelphia. The average delivery time during the pilot program was 15 minutes. The fee for the delivery service, by using GrubHub, averaged $5 per delivery. During the testing in those markets, Dunkin’ recorded delivery sales two-times the amount of in-store sales.
If the deal with Grubhub is successful, there could be an extension of delivery services to another brand of stores – Baskin Robbins. Baskin-Robbins was acquired by Dunkin’ in 1990, which led to the company expanding its products, including bagels, hot and cold beverages, and even breakfast sandwiches. The partnership with Grubhub fits the ongoing need for convenience by consumers, who want on-demand delivery service of food and beverage items from a wide variety of stores and restaurants. Grubhub has already made a huge success with delivery from major food chains, such as KFC and Taco Bell.