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How Dunkin', Starbucks Are Making a Play For a New Market

This unusual food might seem like a new innovation, but it has a long lineage.

American companies have a history of trying to get in on ideas that originated in Asia.

Take the Korean beauty market, or "K-beauty" as it's often called, which started to make headway into the United States around 2015. People crowded onto Reddit to discuss the "10-step routine," an elaborate skincare process that promises to deliver what's known in South Korea as "glass skin."

U.S. brands hustled to get on board, and soon enough L'oreal  (LRLCF)  brand Maybelline had its own version of innovations that were born in South Korea, such as the cushion compact, which allowed users to reapply foundation by soaking the product within in a sponge and dabbing it on with an applicator.

Today you can buy K-beauty products everywhere from Sephora to CVS. And even though the height of the craze has faded, it's easy to find Asian influence in many other businesses.

Now, Dunkin'  (DNKN)  is the latest to cash in on the trend with a new addition to its menu that will appeal to many folks who can't get enough of the treats found at many an Asian bakery.

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What Did Dunkin' Add To Its Menu?

Dunkin' made its first move into an Asian-influenced menu in 2020 when it added matcha, a powdered tea known for its vivid green color, to its menu. Starbucks  (SBUX)  made the same move many years before Dunkin' did (although the ingredient was off-menu for Starbucks for a long time before it was formally added).

Matcha continues to be an alternative of choice for those who prefer less caffeine than coffee or want the numerous health benefits the tea offers. It's also a common flavor found at coffeehouses that serve bubble tea, a Taiwanese import which has gained more widespread popularity in recent years.

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Now Dunkin' has decided to go a step further by testing a mochi doughnut at its Nashville locations. Another beloved staple of the Asian bakery, mochi doughnuts are a hybrid of a doughnut and mochi, a glutinous rice that gives the pastry a satisfying, chewy texture.

Dunkin' already sells a mochi doughnut called Berry Berry Mochi in its Singapore locations, but it's a big move to try pushing them into the American market -- a move, in fact, that other fast-food brands could likely benefit from, judging by the response to many of its overseas-only items.

If Dunkin' is hoping to capture the attention of a younger customer that love bubble tea and mochi donuts, it seems to already be working.

It's also drawing the attention of a customer who typically does not go to Dunkin'--which is basically every fast-food retailer's dream come true.

In fact, folks in non-Asian countries have been asking the chain for these long before now, so it seems Dunkin' is watching to see what its followers have to say.

The Success of Asian Sweets in an American Market

If Dunkin's bet pays off, it could be ahead of the curve on a trend that could grow to be as big as bubble tea.

The global bubble tea market size was $2.1 billion in 2019, and forecasted to grow 8.9% by 2027. It has also spawned chains, the best-known being Sharetea, a Taiwanese company founded in 1992 that has locations in six different countries both in and outside the United States.

Mochi doughnuts are lesser-known in the U.S. for now, although devoted brands are starting to sprout up in places such as California, New York, and Atlanta.

Mochibee's, a New York-founded chain with locations in seven states, is currently expanding as well as offering franchise opportunities. So you just might see mochi doughnuts cropping up in your neighborhood before you know it.