The Motley Fool’s readers have spoken, and I have heeded their cries. After months of pointing out CEO gaffes and faux pas, I’ve decided to make it a weekly tradition to also point out corporate leaders who are putting the interests of shareholders and the public first and are generally deserving of praise from investors. For reference, here’s my previous selection.
This week, we’ll dig into something we all love — doughnuts, coffee, and ice cream — and I’ll highlight why Dunkin Brands Group Inc (NASDAQ:DNKN) CEO, Nigel Travis, has done a truly exceptional job at the helm.
Kudos to you, Mr. Travis
Despite its popularity now, Dunkin Brands Group Inc (NASDAQ:DNKN) — consisting of Dunkin’ Donuts and Baskin & Robbins — hasn’t always had an easy path to success. In fact, the company unsuccessfully tried to enter the West Coast with its popular Dunkin’ Donuts before, opening up 12 stores in California in 1999, only to close them a short time later after failing to achieve the desired results.
Part of the problem working against Dunkin’ Brands is that the public perception of obesity is changing. With obesity now a full-blown epidemic, healthier food and drink choices are in the spotlight, which has required companies such as Dunkin Brands Group Inc (NASDAQ:DNKN) to innovate their menus. Still, it makes growing the company’s core doughnut business difficult.
We saw both of these problems eat Krispy Kreme Doughnuts (NYSE:KKD) alive last decade. Krispy Kreme expanded zealously without really understanding the saturation level of the markets it was operating in. In addition, it didn’t have much of a menu beyond doughnuts, only recently adding its own signature coffee blend, and healthier items such as yogurt as an option.
Yet in spite of its own growing pains, Dunkin’ Brands and its CEO, Nigel Travis, have persevered.
The first factor that’s led Dunkin Brands Group Inc (NASDAQ:DNKN) to success has been its ability to stay fluid with its menu. The company’s DDSMART menu (short for Dunkin’ Donuts Smart) features items such as oatmeal, egg white flatbread sandwiches, and wake-up wraps. By giving health-conscious consumers more choices, it’s keeping its current customer base loyal while also giving a reason for newer customers to walk through its doors.
Partnerships have been another key to Dunkin’ Brands’ success. It, not Starbucks Corporation (NASDAQ:SBUX), was the first coffee chain to forge a partnership with Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR), the company behind the single-serve Keurig brewer and K-Cups. It was apparent to Travis early on just how revolutionary the single-serve brewing movement was, so he inked a deal to have Green Mountain sell Dunkin Brands Group Inc (NASDAQ:DNKN)’ blend in K-Cups. It was only weeks later that Starbucks had essentially little choice but to partner with Green Mountain as well or be left in the dust.
This partnership is also a key reason Dunkin’ Brands has been able to fend off McDonald’s Corporation (NYSE:MCD), which has certainly made a name for itself in coffee by taking on the big boys like Starbucks Corporation (NASDAQ:SBUX) and Dunkin’ and offering an inexpensive brew. Dunkin’ Brands has been able to use its signature coffee line to build a brand of loyalty that simply doesn’t exist for McDonald’s coffee.
A step above his peers
In addition to guiding the expansion of Dunkin Brands Group Inc (NASDAQ:DNKN), including bringing the company public in 2011 on the Nasdaq, Travis has overseen a growing dividend and a gaggle of happy employees, and he’s instilled a giving nature among his company and its employees.
Although its dividend is relatively new, Dunkin’ Brands announced in January that it’d be boosting its quarterly payout by a whopping 27% to $0.19 from $0.15 in the preceding year. For a restaurant chain, a 1.8% yield is nothing to sneeze at — nor is a 27% dividend boost after being public for less than two years.
Dunkin’ also isn’t any slouch when it comes to keeping its employees happy through various perks and discounts. On top of offering medical, dental, and vision coverage, it also provides up to $5,000 in undergraduate and graduate college reimbursements for qualified individuals and programs. Dunkin Brands Group Inc (NASDAQ:DNKN) can also help its employees get discounts on auto and homeowners insurance, pet insurance, and, of course, bulk coffee purchases.