North hopes to conquer South with doughnuts

Dunkin' Donuts is intent on expanding in Krispy Kreme's home territory.
FRANKLIN, Tenn. (AP) -- When asked how he got his own Dunkin' Donuts store, Joe Rando holds up the afternoon cup of coffee he's just poured for himself.
"Lifelong Dunkin' fanatic," he said.
When the Maine native moved South with his former company to the Nashville area a couple years ago, he found he had to do without his favorite treat.
"I sort of woke up one morning and said, 'There aren't any Dunkin' Donuts here. Why is that?' So I made a phone call," Rando said.
Heading South
From its first store in Quincy, Mass., Dunkin' Donuts has become the quintessential Northeastern doughnut shop, with working-class credentials and obsessive customers.
But now the Canton, Mass.-based chain plans to expand south and west across the country, and that begs the question: Will Southerners, with their long-standing love of Krispy Kreme's sugar-glaze, find room for another doughnut?
Rando is in charge of 12 Nashville-area stores that will serve as a prototype for the company's expansion, testing everything from new products to store appearance.
Dunkin' Donuts has about 4,400 stores in 36 U.S. states, but the majority are in the Northeast and mid-Atlantic region. (There are another 1,700 international Dunkin' Donuts stores in 29 countries.) Company executives hope to triple the total number of U.S. stores by 2020.
"Our objective is to take the brand national," Dunkin' Donuts brand officer Robert Rodriguez said. "We have been a very successful super-regional chain."
But parent Dunkin' Brands Inc. is invading the South with a different sort of doughnut -- thicker and cakier than the traditional Southern treat from Krispy Kreme, which is lighter, sugar-glazed and served hot.
Executives at both companies say their doughnuts have a universal appeal, but Rando says there's no middle ground.
"It's like the Red Sox and the Yankees -- you like one or the other," he said.
Stan Parker, senior vice president of marketing for North Carolina-based Krispy Kreme, said many Southerners have grown up with their doughnuts and think of a trip to Krispy Kreme as more than just breakfast or a snack.
"For many people, Krispy Kreme has been part of their lives for a long time," he said.
Rosemary Evans was clearly in the Krispy Kreme camp as she shared a dozen doughnuts with her children on a recent Saturday morning.
"Dunkin' Donuts just don't have much flavor," said Evans, who grew up in Alabama. "These are just more moist. You can fold them up and stuff a whole one in your mouth."
Dunkin' Donuts fan Jack Lehnhart disagrees. "Wax doughnuts," he says about Krispy Kremes.
Lehnhart, an Ohio native, and his wife, Nancy, brought their out-of-town guests, Jo-Ann and Bob Ruel, to the Dunkin' Donuts store in Franklin before the Ruels started driving home to Chatham, Mass.
"When we're on the highway, we're always looking for the DD sign," Jo-Ann Ruel said.
Josh Owens, an equity analyst who follows the restaurant industry for Morningstar in Chicago, said Krispy Kreme is still a relatively small chain compared with Dunkin'.
"Dunkin' Donuts has a reasonably strong brand. It's a brand a lot of people are familiar with. It's not necessarily going to have the fad element that Krispy Kreme had with its expansion," he said.

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