Foodservice Equipment Reports

Westward Ho For Dunkin’ After IPO?

Dunkin’ Brands went public last week, in a big way. Shares were up more than 50% in the first day of its IPO. The optimism and soaring interest seemed to stem from investors’ sense of manifest destiny. The Canton, Mass., company's Dunkin' Donuts stores are concentrated in the Northeast, and investors are focused on expansion possibilities west of the Mississippi.

According to the prospectus released prior to its IPO, the chain plans to open as many as 250 more shops in the U.S. in the next two years. The company says that its expansion strategy "has the potential, over approximately the next 20 years, to more than double our current U.S. footprint and reach a total of 15,000 points of distribution in the U.S." That total includes grocery stores.

Dunkin’ Donuts products are sold in 6,800 locations in the U.S., including supermarkets and coffee shops; Dunkin' Brands' 2010 revenue—including sales at its Baskin-Robbins brand—totaled $577 million. According to NPD market research, Dunkin’ Donuts sells more servings of hot regular coffee and iced coffee than any other fast-food chain in the U.S., including Starbucks. In its prospectus, Dunkin’ says it has 57% of the fast-food coffee market in New England and New York; coffee and other drinks represent 60% of the chain's U.S. sales.

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