Dairy Queen launches Stackburger range as chain sees record sales in 2021

Dairy Queen’s Flamethrower Stackburger and Small Ice Cream Cone

Source: Dairy Queen

Dairy Queen is expanding its burger offering as the fast-food chain looks beyond Blizzards and other desserts.

The new Stackburger line is Dairy Queen’s biggest menu expansion in two decades, featuring five burger flavors for US customers: Flamethrower, Loaded A1, Bacon Two Cheese Deluxe, Two Cheese Deluxe and Original Cheeseburger. They are available as third-pound double burgers or half-pound triple burgers – hence the name Stackburger.

The burgers will be a permanent addition to menus at the company’s DQ Grill & Chill locations, which represent 72% of Dairy Queen’s more than 3,300 U.S. restaurants. The Stackburger range is also launched in Canada.

Dairy Queen is far from the only restaurant chain expanding its offering to attract more customers. Panera Bread lobbied for more dinner orders by adding items such as flatbread pizza to its menu, while Dine Brands’ IHOP made waves several 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 income attributable to shareholders of $89.8 billion for the last year. Last year, Dairy Queen’s annual revenue rose 18% to $224.7 million, according to franchise disclosure documents.

The official launch on Tuesday is a long time coming. International Dairy Queen CEO Troy Bader said in an interview that the chain began critically examining its menu nearly five years ago, around the time he took over the reins of the company. business. The company knew it couldn’t “be everything to 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 revamped its chicken strip offerings before moving on to burgers.

“I would say this is one of the first real menu strategies we’ve had in the Dairy Queen system in a long, long time,” Bader said.

In markets like the Southeast, its food offerings already accounted for the majority of sales, surpassing its candy offerings. And customers who bought their lunch or dinner there also tended to buy a Blizzard or an ice cream cone.

Improving its burgers took several years and started in earnest in 2019. Dairy Queen created a new bun that’s airy but strong enough to hold the weight of three burger patties. He replaced his cheese options with white cheddar and a more pungent American cheese.

Troy Bader, CEO of Dairy Queen

Source: Dairy Queen

“We were proud of our burgers, but knew we could do better with them,” Bader said.

Next, the chain put Stackburgers to the test. For nearly 10 months, Dairy Queen tested 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 sites were involved, making it the chain’s biggest test in more than two decades.

The pandemic has also caused some delays. A nationwide labor shortage exacerbated supply chain issues, so Dairy Queen opted to postpone the launch, which was originally scheduled for late fall 2021. Bader said that the chain wanted to make sure its suppliers had enough employees to ensure franchisees weren’t left behind. a swerve.

But the chain didn’t care about customers staying home. Bader said Dairy Queen sales dropped significantly for six weeks in the spring of 2020 as the pandemic led to closures and fear of even visiting drive-thru lanes. After that month and a half, however, his business quickly rebounded.

“Since the period, we’ve only had record sales,” he said.

In the two-year period from 2020 to 2021, the chain’s same-store sales in the United States increased 17% from 2019 levels.

Bader is confident that burgers will further fuel sales. Dairy Queen soft-launched Stackburgers on February 7 and has seen double-digit increases in units sold so far, without any advertising.

While fast food competitors such as McDonald’s are testing or adding plant-based burgers, Dairy Queen is absent for now.

“There’s so much new news with our Stackburgers and with the labor situation with our franchisees, we didn’t want to introduce too many new items for them,” Bader said. “When we think of plant protein, 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 an annual in-person shareholder meeting on April 30, its first since the pandemic began. Bader said Dairy Queen will forego Blizzards and instead highlight prepackaged items, such as its non-dairy Dilly bars, for investor safety and convenience.

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