Dunkin' Drops the "Donuts," Adds … Beer?

Dunkin' Brands' (NASDAQ: DNKN) eponymous chain has dropped the word "Donuts" from its name, and now it's lending its revised brand to an entirely different wheat-based treat: beer. The company won't be selling six-packs in its stores, but it has partnered with craft beer major Harpoon Brewery on a new brew called Dunkin' Coffee Porter.

The beer was described as "a balanced and smooth brew offering robust and roasty notes," in a press release, and the folks at New England-based Harpoon say it was created "as a tribute to all the days that Dunkin' has helped the brewmasters fire up the brew kettle." It was formally introduced on Sept. 27 before Harpoon's annual Octoberfest event, as customers at the company's Boston brewery got to sample the coffee-infused porter.

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"Our brands have such passionate, loyal fans, who start their busy day with a cup of Dunkin' coffee and end it by enjoying one of Harpoon's famous craft beers," said Dunkin' U.S. Chief Marketing Officer Tony Weisman in the press release.

A brand expansion

Using coffee to flavor darker beers is a common practice, but this pairing gives Harpoon a clear marketing advantage. It's reasonable to think that Dunkin' fans who are also craft beer drinkers — especially in New England, where both of these companies are based — will want to see what the two have come up with.

The beer will be sold in 12-ounce bottles in select retail locations throughout the fall. Dunkin' Coffee Porter, which was further described as "a malty tasting brew that has a smooth mouthfeel with aromas of espresso and dark chocolate," will also be on draft at participating bars.

While Dunkin' hasn't dabbled in selling alcoholic beverages in its stores yet — unlike rival Starbucks — it has been just as aggressive in its efforts to grow its brand beyond them. Those efforts have included a broad expansion into grocery and convenience chains with its ready-to-drink bottled coffees.

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This partnership, though, brings the Dunkin' brand someplace new, and also someplace that makes sense. It's not a gimmick like KFC selling lip gloss. It's a logical brand extension.

It's worth noting that this is not Dunkin's first beer partnership. But its previous effort, DDark Roaster Brew, was only available at one much-smaller (albeit highly regarded) brewery.

More deals coming?

Dunkin' brings to the table one of the most powerful brands in coffee and doughnuts — even if it no longer wants to be so closely tied to the pastry treats. That gives it the muscle to make other deals like this one, perhaps even partnering with market leaders in other areas. We might see the company bringing back Dunkin' Donuts cereal — a product that launched before it was a national brand — or maybe even selling packaged pastries in grocery stores.

Starbucks has lent its name to everything from energy drinks to ice cream without diluting or hurting its brand. Dunkin' should be able to do the same, and this partnership — while minor in the grand scheme of things for a company of its size — may serve as a test for bigger things to come.

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Daniel B. Kline has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Starbucks. The Motley Fool recommends Dunkin' Brands Group. The Motley Fool has a disclosure policy.

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