• by Nina Lentini , March 9, 2007

Dunkin' Donuts' announcement yesterday that it had hired Rachael Ray to represent the brand had some scratching their heads. Why would Ray, host of a highly rated syndicated daytime show and best-selling author with a reputation for creating healthy, 30-minute meals, want to align her own brand with a company that makes, well, doughnuts?

The answer appeared in the third sentence of the news release: "Ray will also lend her perspective to the ... culinary team in the development of new, 'better for you' food and beverage options."

"That's the key," says image consultant S. Renee Smith, who saw the news as Ray's having "moved outside her brand. Dunkin' Donuts isn't exactly nutritional food. But it is trying to grab more market share by offering more health foods. In that sense, it's a great fit. She'll bring folks in because of her image, her brand.

"And she is going to continue to monopolize the market," Smith adds with a laugh, meaning she'll gain a new audience through the alliance.

Ray, whose deal with Dunkin' runs through 2010, will appear in TV ads next month and later in print and radio spots, online, in-store marketing and personal appearances.

The synergy is a good one, says Maria Caranfa, director of Mintel Menu Insights. The coffee and baked goods giant has positioned itself as a provider of sustenance to busy people with its "America runs on Dunkin'" campaign, and the ubiquitous Ray is one busy woman. "She is also the kind of person who identifies with the everyday consumer through her shows, her 30-minute meals. She knows people don't have a lot of time."

Dunkin' Brands, which was acquired in April 2006 by a consortium of three private equity firms, has been working to raise its profile through marketing. According to Nielsen Monitor-Plus, the company spent $122 million on advertising in 2005, while from January to November of 2006, it spent $123 million.

Dunkin' Donuts plans to open 10,000 new stores around the U.S. by 2020. It also intends to add 325 stores in Washington, D.C., and Baltimore by 2010. The restaurant has 4,400 stores, compared with 8,600 for the more upscale Starbucks, which lately seems to have lost its bliss, according to published reports.

As part of the expansion, Dunkin' Donuts is modernizing its stores and increasing its food offerings, with more choices for afternoon eating. It hopes to attract business crowds and students with a wireless network and improved ambience.

In recent years, the company has introduced several new products that provide customers with additional on-the-go options, including Smoothies, Latte Lite and the reduced-carb bagel; in addition, the company has been working since 2004 to remove trans-fats from all of its menu offerings.

Based in Canton, Mass., Dunkin' Donuts headquarters is about 63 miles from the area on Cape Cod at which Ray claims to have spent her early years.