Dunkin’ Donuts and Liverpool – New England roots

It is a move that has roots in New England, Boston based Dunkin’ Donuts have signed a multi-year partnership with Liverpool Football Club.

The deal will see the Massachusetts based doughnut and coffee-house chain become the official coffee, tea and bakery provider of the five-time European champions. Sister company, Baskin-Robbins, is also in on the deal, as they will supply ice-cream.

Dunkin’ Donuts have, in recent weeks, been making news with their statements of intent regarding their plans to expand globally and, the agreement with Liverpool FC, is a bold first-step in the U.K and European markets. Given that the Premier League is broadcast to over 200 countries worldwide and the Anfield club boast an average attendance of 44,685, there is a captive market to be targeted.

The quotes from the press conference announcing the deal make for interesting reading as there is a clear dichotomy in the words chosen by both parties.

There is a clear emphasis on the financial aspect for the football club, who will undoubtedly be rewarded healthily in this deal, whilst for Dunkin’ Donuts it was all about exposure in global market: Liverpool’s chief commercial officer Billy Hogan stated that ‘fans across the globe will benefit from this partnership as Dunkin’ Brands look to expand their business’ whilst managing director Ian Ayre, commenting, upon the benefits for the football club, stressed the economic benefits: ‘This is one of our key partnerships and Liverpool fans should take comfort that we are right at the top of the commercial league.’

With the coffee market in the UK rising, and branded coffee shops seeing sales rise by a whopping 9.3% in 2013, the American company are clearly looking to grab a slice of the estimated £6.2bn turnover. Recent reports suggest that in a few years, the revenue from coffee could exceed £8bn whilst outlet growth would rise at a rate of 4.5% year-on-year. With Starbucks, Costa and Café Nero predominantly having the market share in the United Kingdom; Dunkin’ Donuts are hoping that their association with Liverpool with give them solid foundation of brand awareness that will allow them to compete against their rivals on British shores.

But why Liverpool?

The club may not sit on top of English football at the moment, but they are one of the most recognisable football teams in the world thanks to their continued success both domestically and internationally over the decades. With a number of fans in Great Britain and a sizeable following in key emerging markets such as Asia and Africa, the Reds naturally appear as an attractive commercial prospect for partners – though their sponsorship deals may not, presently, match that of their rivals. For example, Manchester United are set to reportedly rake in £48m a year through their incoming partnership with General Motors, Liverpool’s kit-sponsorship, which was signed last summer, is worth at least £20m.

There may be a financial motive in the sense that Dunkin’ Donuts have chosen their partner carefully, weighing up the cost with market exposure and Liverpool would be that happy medium and given the club’s performances this season, it could turn out to be a wise move as the side look to be back to challenging for the Premier League crown.

However, perhaps more importantly, is the American connection.

Liverpool FC are owned by Fenway Sports Group, an American sports investment company who were founded in 2001 under the guise of New England Sports Ventures. (Geographically, New England refers to the six northeastern states which includes Massachusetts.) The following year the group purchased the Boston Red Sox, the New England baseball outfit, and has since established the side as one of Major League Baseball’s most successful teams of the past decade, ending an infamous eight decade run without success in the process.

They then turned their attention to football and bought Liverpool in 2010.

It should come as no surprise then that Dunkin’ Donuts, a Massachusetts based company, has a similar relationship with Boston Red Sox. Evidently that both sides have agreed to do business once more and the pre-established connection with FSG through the Red Sox provided an ideal opportunity to gain a sporting partnership in the United Kingdom. A wise business move indeed and one that showcases it is often a case of who you know in the commercial world.

The agreement with Liverpool marks a bold step for the company. Anfield may now run on Dunkin’, but if a similar approach is undertaken on home soil as they expand past the Mississippi River, the slogan of America runs on Dunkin’ may hold true.

Dunkin’ Donuts are a company to keep an eye on over the coming years, especially if they continue to strike up interesting partnerships and make use of their already well-established links.