Dairy Queen Stackburger flamethrower and small ice cream cone
Source: Dairy Queen
Dairy Queen is expanding its burgers offerings as the fast food chain goes beyond Blizzards and other desserts.
The new Stackburger line is the largest extension of Dairy Queen’s menu in two decades, with five burger flavors for US customers: Flamethrower, Loaded A1, Bacon Two Cheese Deluxe, Two Cheese Deluxe and Original Cheeseburger. They are available as double burgers of one third of a pound or triple burgers of half a pound – hence the name Stackburger.
Burgers will be a constant addition to the menus at DQ Grill & Chill’s locations, which account for 72% of Dairy Queen’s more than 3,300 American restaurants. The Stackburger line is also launched in Canada.
Dairy Queen is far from the only restaurant chain that is expanding its offerings to attract more customers. Panera Bread is pushing for more dinner orders, adding flatbread items to its menu, while Dine Brands’ IHOP sparked waves a few years ago by briefly changing its name to IHOB to promote its burgers.
Warren Buffett’s holding company Berkshire Hathaway has owned Dairy Queen for 25 years. With net income of $ 84.3 million in 2021, the fast food chain is a relatively small component of Buffett’s empire, which reported net share attributable to shareholders of $ 89.8 billion last year. Last year, Dairy Queen’s annual revenue rose 18 percent to $ 224.7 million, according to franchise disclosure documents.
The official presentation on Tuesday is long overdue. International Dairy Queen CEO Troy Bader said in an interview that the chain began looking critically at its menu nearly five years ago, around the time he took over the company. The company knew it couldn’t be “everything for everyone”, so it tried to figure out what its customers wanted, according to Bader.
Dairy Queen landed on two foods: chicken strips and burgers. The chain first updated its chicken strip offerings before making burgers.
“I would say this is one of the first real menu strategies we’ve had in the Dairy Queen system for a very, very long time,” Bader said.
In markets such as the Southeast, its food offerings already account for the majority of sales, surpassing offerings for sweet treats. And customers who bought lunch or dinner there still bought Blizzard or an ice cream cone.
Improving his burgers took several years, starting in earnest in 2019. Dairy Queen created a new muffin that was ethereal but strong enough to withstand the weight of three burgers. He replaced his cheese options with white cheddar and sharper American cheese.
Dairy Queen CEO Troy Bader
Source: Dairy Queen
“We were proud of our burgers, but we knew we could do better with them,” Bader said.
The chain then put the Stackburgers to the test. For almost 10 months, Dairy Queen has been testing new menu items in Birmingham, Alabama; Sioux Falls, South Dakota; and South Bend, Indiana. Restaurants in the Canadian provinces of Ontario and Alberta were also included in the test. In total, nearly 100 seats were included, making it the biggest test for the chain in more than two decades.
The pandemic also caused some delay. The national labor crisis exacerbated supply chain problems, so Dairy Queen chose to postpone the launch, which was originally scheduled for late autumn 2021. Bader said the chain wanted to make sure its suppliers had enough employees to ensure that franchisees will not remain inside the delusion.
But the chain was not worried about customers staying home. Bader said Dairy Queen’s sales fell significantly in six weeks in the spring of 2020, as the pandemic led to a blockade and fear of even visiting lanes. After that month and a half, however, his business recovered quickly.
“From then on, we had nothing but record sales,” he said.
During the two-year period from 2020 to 2021, the chain’s sales in the same store in the United States increased by 17% compared to 2019 levels.
Bader is confident that burgers will boost sales. Dairy Queen launched Stackburgers on February 7 and has seen a double-digit increase in sales so far, without any publicity.
While fast food competitors like McDonald’s are testing or adding plant-based burgers, Dairy Queen is sitting still.
“There is so much new news with our Stackburgers and with the work situation with our franchisees, we didn’t want to introduce too many new items for them,” Bader said. “When we think of plant proteins, it’s something we keep watching, watching and seeing what role it can play in the Dairy Queen system.”
Berkshire Hathaway is preparing to hold a personal annual shareholders’ meeting on April 30, the first since the pandemic began. Bader said Dairy Queen would abandon Blizzards and instead emphasize pre-packaged items, such as his non-dairy Dilly bars, for the safety and comfort of investors.