In the late 1980s, Dunkin’ Donuts (NASDAQ: DNKN) tried to reach breakfast customers who could not visit its stores by offering a cereal which was sold in supermarkets.
That product, which came in glazed and chocolate flavors, was not a hit — partly because it was a decade flooded with novelty cereal choices. Mr. T had a cereal, Pac-Man had a cereal, and Dunkin’ Donuts simply couldn’t break through the noise with its product, which was round, but didn’t really taste like doughnuts.
Now, the coffee-and-doughnut chain has returned to grocery stores with a packaged breakfast item. Instead of bringing back its cereal, the chain has partnered with Kellogg (NYSE: K) to make Dunkin’-inspired versions of Pop-Tarts.
What are Dunkin’ and Kellogg doing?
The two companies have paired to release Pop-Tarts in two Dunkin’ Donuts flavors, Frosted Chocolate Mocha and Frosted Vanilla Latte. They’re being described as a limited edition offering, though it’s likely that they will stay on shelves if customers respond well.
“Our fans have been clamoring for coffee-flavored Pop-Tarts,” said Pop-Tarts Marketing Director Angela Gusse in a press release. “No national coffee brand offers delicious coffee flavors quite like Dunkin’ Donuts – they were the perfect partner for ensuring the Chocolate Mocha and Vanilla Latte flavors were spot-on when wrapped in a delicious Pop-Tarts pastry.”
Why is this happening?
It’s a smart brand extension for both companies. Dunkin’ Donuts gets to make some licensing money with a product that supports its overall brand. Pop-Tarts may actually get the better end of the deal because the publicity associated with the team-up should remind consumers that its product exists.
This is a smart way to lure lapsed Pop-Tarts customers back into buying the breakfast treat, whether for themselves or for their kids. This deal should give both companies a little bump. It’s not going to move the needle in a major way for Dunkin’ Donuts, but it’s a nice way to dip a toe in the water to see whether it should consider further licensing its brand — or perhaps even bringing back its cereal line.
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