February 3, 2015 / 3:54 PM / 2 years ago

Dunkin' Donuts 2015 drink expansion includes frozen Dunkaccinos

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The signage is pictured at a newly opened Dunkin' Donuts store in Santa Monica, California September 2, 2014.Mario Anzuoni

LOS ANGELES (Reuters) - Dunkin' Donuts is expanding its U.S. menu with cold blended drinks, including a milkshake-like frozen Dunkaccino, as it and other fast-food chains seek to boost sales in a competitive market, an executive told Reuters on Tuesday.

The coffee-and-doughnut chain will also offer fruit smoothies and reduced-calorie versions of its popular Coolatta drinks, said John Costello, president of global marketing and innovation for parent company Dunkin' Brands Group Inc (DNKN.O). Suggested prices for the 16-ounce size of the drinks will be less than $3.

Starbucks Corp (SBUX.O), the company's more upscale rival, has a nearly $3 billion business selling icy, blended Frappuccino drinks.

McDonald's Corp (MCD.N), Dunkin's most direct U.S. competitor, added fruit smoothies and frappes a few years ago as part of its McCafe menu expansion.

The vast majority of the nearly 8,100 U.S. Dunkin' Donuts restaurants will install new blenders this year as part of the drink expansion, Costello said.

The cost for that new equipment varies, but is less than $6,000 per restaurant, the company said.

Tests of the new frozen beverages suggest that they will be popular in the afternoon and evening, when coffee chains work to lure customers, Costello said. The new drinks did not significantly affect service speed in restaurants where they are available, he said.

Dunkin' Brands, which will report fourth-quarter results on Thursday, did not disclose sales of Dunkin' Donuts' new frozen drinks.

Reporting by Lisa Baertlein in Los Angeles

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