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Why Dunkin Donuts lures Colombians away from local brands

by Nigel Hollis | June 01, 2010
I am not sure I have ever seen so many donuts on one plane before. Many of the well-dressed businessmen heading to Cartagena from Bogota were carrying shopping bags stuffed full of Dunkin’ Donuts boxes. What, I wondered, was the attraction? When I quizzed the guy sitting next to me on the plane the answer was, “You can only get them in Bogota. People buy them to take home to their families.” Fair enough—but why an American brand, not a local one?

 

I am not alone in noticing the presence of Dunkin’ Donuts in Bogota’s El Dorado airport or the intensity with which Colombians seem to crave them. Brownie, of the "Blondie and Brownie" blog, suggests that Dunkin' Donuts has encouraged this desire by adapting their donut selection to local tastes. She notes that in addition to more normal fare, the El Dorado outlet sells donuts filled with guayaba (guava) and arequipe (a caramel spread similar to dulce de leche), as well as a chocolate frosted donut covered in mani (peanuts). 

 

But if this were the only reason for the appeal of Dunkin’ Donuts, might not the local Donut Factory serve instead? The two outlets are almost side by side in Terminal 2, but it was obvious from the number of customers that the American brand was getting more than its fair share of attention. (There was also a second Dunkin’ Donuts by the entrance downstairs.)



Admittedly, the donuts in Dunkin’ Donuts looked more attractive to me than the ones in Donut Factory, and so they might be considered better suited for gift giving. But I believe there is more to this phenomenon than just looks and taste.

First, there is a scarcity factor involved. When you cannot easily get something, it becomes that much more alluring. As a result, a box of 10 donuts costing about 22,500 pesos (just over $10) becomes a much more notable gift for the family than something that costs more but is available down the street.

Second is the fact that Dunkin’ Donuts comes from the United States. I suspect that to many Colombians there is still an allure in buying an international brand, particularly one that hails from the land of Disney, Miami Beach, and New York.

As I noted in my post on Sonic Drive-Ins, pent-up demand is great as long as it lasts. The big question is whether Dunkin’ Donuts will be able to sustain its appeal when more outlets open in Colombia. In part the answer to that question may rest with the local competition. Unless the Donut Factory ups its game, there seems little reason why Dunkin’ Donuts might not become as well accepted in Colombia as Coca-Cola. But even if the Donut Factory does not compete effectively, Dunkin’ Donuts still needs to make the transition from scarcity brand to ubiquity successfully. And that will mean getting even closer to Colombian culture.

If you have any thoughts on this matter, I would love to hear them, particularly if you live in Colombia.

4 comments

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  1. pat, April 22, 2013
    just reading this now, any update on dd status in columbia
  2. Nigel, June 22, 2010

    Hi Carolina and Sebastian, this just goes to prove you cannot trust the information gathered from a random conversation on the plane! I stand corrected about the presence of Dunkin Donuts elsewhere.


    Sebastian, your comment makes sense to me. If it is not something familiar then the big, foreign brand may be the best bet. Carolina may be right that most people do not regard Donut Factory as local but they probably do know Dunkin' Donuts as a famous American brand?

  3. Carolina, June 22, 2010
    Hi, Nigel! The first thing would be to say that in general terms I (as a colombian) agree with your perception of Colombians desire for american brands. Still there are some variables that I would consider and add to your thoughts.
    The first thing is that I am not even sure if colombians are aware of the fact that Donut Factory is a local brand. I know it is, but its name is in english and they have not given any signs of being local so far.
    Therefore I think there are other factors that can make Dunkin Donuts more appealing than Donut Factory.
    Besides having two stores at the airport, Dunkin Donuts has other more strategical outlets in important shopping centers (as Centro Andino- high SEL target), while Donut Factory has way less and smaller points. Also, most Dunkin Donuts outlets have Baskin Robbins too, which offers, besides a nice image, all sorts of innovative ice creams. I think this two things end up making the brand more aspirational.
    Last, the two brands have a product difference that for many ends up dividing preferences: while Donut Factory donuts have a glaced frosting(which I personally prefer by far), Dunkin donuts cover is of powder sugar.
    Regarding the future of this brands, seems to me that they have both stopped investing in driving new consumers for a long time. Specially Donut Factory, which has maintained the same image for many years, while other substitute categories  (as cinnamon rolls) are evolving and innovating a lot in the market, and being each time more present (also with an American face).
    So I wonder if they are not both at risk of loosing their market to other more appealing categories that seem to be a trend and are becoming as aspirational as Donuts today.
  4. Sebastian, June 21, 2010
    Hi, Nigel. I'm from Colombia and, first of all, there are dunkin' donuts in other cities, not only in Bogota;. Second, this could happen because the donuts are not a product that is very very close to our culture, so when we have to choose this kind of products, we prefer big brands, the brands we know. And if this donuts are more expensive, we are gonna buy it because we want to feel something that is not from our culture, something different to what we use to do. Sorry for my english... again!! Thanks!!

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