Why Dunkin' Is Dropping 'Donuts' From Its Name

Dunkin' Donuts is dropping the iconic "Donuts" from its name.

The company is largely responsible for the popularity of the American spelling, which makes this decision even more noteworthy.

In a press release, the food chain’s parent company Dunkin’ Brands Group Inc. (DNKN) announced that the rebranding will come into force from January 2019 across all of its advertising, packages and exterior and interior signage at new and remodeled restaurants. Company chiefs reportedly said that the makeover is necessary to reflect Dunkin’ Brands' identity as a vendor of various beverages and foods, not just doughnuts.

"The new branding conveys the company's focus on serving great coffee fast, while embracing Dunkin's heritage by retaining its familiar pink and orange colors and iconic font, introduced in 1973," said the press release. According to the firm, the new branding is "one part of Dunkin's multi-faceted blueprint for growth, a plan designed to transform the company into the premier beverage-led, on-the-go brand."

In recent years, the Canton, Massachusetts-based food chain has been diversifying its food selection and also moved into the drinks market with coffee and iced teas. Higher margin beverages have become a key focal point for Dunkin and currently account for about 60% of company sales in the U.S. (See also: Why Dunkin’ Brands Stock Is Crushing Starbucks.)

In the press release, Tony Weisman, chief marketing officer at Dunkin' U.S, said the change presented an “opportunity to create an incredible new energy.” Meanwhile, the company’s CEO and U.S. president, David Hoffmann, said dropping the word “Donuts” from its brand formed part of Dunkin’s strategy to “modernize the Dunkin' experience” for customers."

Dunkin first experimented with its new name last year, starting at a store in Pasadena, California. The change did not go down well with customers, according to Business Insider.

The rebranding comes at a time of considerable investment for the company. In February, the food chain revealed a new strategy to slim down its menu, increase speed and focus more on beverages. It also recently unveiled plans to open 1,000 new U.S. stores by the end of 2020, according to CNN Money.

Management will now be hoping that its decision to drop “Donuts” from its name does not impact sales of doughnuts, which still generate roughly 40% of the chain's revenues.

Dunkin’s stock rose 0.54% in pre-market trading. (See also: Short on Dunkin' Brands and Burger King's Parent: Jim Chanos.)