I don’t consider myself a big Dunkin’ Donuts fan. When I lived in Delaware I used to go there only on Hanukkah, looking for donuts to remind me of Hanukkah doughnuts (I dare you to find those in Delaware!). So when I came to read their first CSR report, which was released last week, I didn’t expect much. Yet, I found myself surprised reading a transparent account of a company committed to become much more sustainable, while being aware of its challenges and the length of the journey it needs to make.
The report is actually released by Dunkin’ Brands, which includes Dunkin’ Donuts, the world’s leading baked goods and coffee chain, and Baskin-Robbins, the largest chain of ice cream specialty stores in the world. It is entitled Serving Responsibly, and as Nigel Travis CEO, Dunkin’ Brands explains, it’s more than just a title: “Serving Responsibly defines Dunkin’ Brands’ commitment to always consider the needs of Our People, which includes our employees and franchisees, Our Guests, Our Neighborhoods and the interests of Our Planet with every key business decision,” he writes.
Both Dunkin’ Donuts and Baskin Robbins are chains serving hundreds of millions of customers annually. Dunkin’ Donuts reports for example it sells almost 2.5 million donuts a day and more than 1 billion cups of coffee a year. This size of business means they have a big footprint as well as a lot of potential to make a difference.
The most important group of stakeholders Dunkin’ Brands can impact is their customers, or guests as they call them. Now, donuts and ice cream are not the healthiest or the most nutritious food to say the least, but it doesn’t mean Dunkin’ Brands is not looking to offer their guests plenty of healthier menu options, as well as accurate nutrition information so “they can make the best choices for themselves.”
Dunkin’ Brands tries to provide healthier choices for customers and in 2008 launched the “DDSMART menu“, which includes multigrain bagels, egg & cheese on an English muffin, iced latte lite and a reduced fat blubbery muffin (among other things). All the DDSMART menu items are reduced in calories, fat, saturated fat, sugar or sodium by at least 25% when compared to a base product and/or contain nutritionally beneficial ingredients. When it comes to menu labeling, the company joined restaurant industry groups to lead the way to federally mandated menu labeling legislation, which was enacted by President Obama in March 2010.
Now, when you sell more than 1 billion cups of coffee a year, you can’t avoid the question of the cups, especially when they are made of foam. Dunkin’ Donuts claim they’re also concerned of the impact of the cups and in fact it is their #1 sustainability priority.
Their challenge here is more complicated because they have nearly 100 percent franchised restaurant operations. Therefore changing the foam cups into cups made of a more sustainable material is a tougher sale. Not only must a new cup not cost more compared to a foam cup, but it also needs to provide customers with all the advantages they are used to getting right now (taste, convenience etc.). In addition, the new cup should be more environmentally friendly than the current cups. The bottom line is very simple – if Dunkin’ Donuts won’t provide a solution meeting these three criteria, the franchisees won’t buy it.
So far Dunkin’ Donuts hasn’t found a solution to their cup issue and they keep looking. In the meantime, to reduce waste, the company reduced the weight of both their foam hot cup and their plastic cold cup in 2009, which reduced the amount of materials sent to landfills by 4.6 million pounds annually. The company is also preparing to test reusable mug programs and recycling programs for everything from cups to coffee grounds in stores. When it comes to reusable mugs, Dunkin’ Brands can definitely learn from Starbucks who offers customers who bring a reusable travel mug a 10 cent discount on any Starbucks beverage. Actually Dunkin’ Brands can do much better with a higher discount, embracing it as their sustainability point of differentiation.
I believe the need to find win-win solutions that will convince Dunkin’ Brands’ franchisees to jump on the green bandwagon is actually a positive force, as it promotes innovation, gets the company to thoroughly examine every idea in terms of the triple bottom line and creates a good checks and balances system.
With their first report under their belts, Dunkin’ Brands is the first to admit it “is at the beginning of its CSR journey”. They still have a lot of work ahead of them, especially in terms of identifying and managing their carbon and water footprint, but their level of transparency and commitment as shown on the report leaves me optimistic they’ll get the job done. I only hope they’ll change their decision to report every two years – there is no reason guests and other stakeholders won’t receive an annual update on the CSR progress of their favorite coffee and donuts chain.
Raz Godelnik is the co-founder and CEO of Eco-Libris, a green company working to green up the book industry in the digital age. He is also an adjunct professor in the University of Delaware’s Alfred Lerner College of Business and Economics.