Dairy Queen sets bold target: $10 billion in sales by 2030

OMAHA - Last year, Dairy Queen restaurants around the world brought in $6.4 billion in sales.

By 2030, the Bloomington-based company wants franchisees to hit $10 billion. That’s more than 4,500 Blizzards sold per minute around the clock.

“We’ve got a long way to go,” said International Dairy Queen CEO Troy Bader. “For us to get there, we need to make sure that every experience at every restaurant is exceptional every day. Easy to say, really hard to do.”

Dairy Queen leaders shared the “10 by 30″ goal internally a year ago, but Bader discussed it publicly for the first time at last week’s Berkshire Hathaway annual meeting.

Berkshire Hathaway has owned DQ since 1998. The first Dairy Queen opened in Illinois in 1940, but the company has been headquartered in Minnesota since 1962.

The franchisor’s ambition comes amid a rapid global expansion and sales trends that are the envy of the industry.

Unlike many of its fast-food peers, Dairy Queen had a “positive” first quarter, Bader said, following a year of growth.

“If you see the releases of some of our competitors, not everybody is experiencing that right now,” he said.

With higher prices and economic uncertainty, chains like McDonald’s, KFC and Wendy’s have seen traffic and comparable sales decline.

Dairy Queen isn’t immune to that pressure, however. HSBC analyst Meredith Jensen wrote “consumer trust in [fast-food] value has eroded” because of inflation.

“The more recent aggressive return to value for the sector is resonating with consumers across income brackets,” Jensen wrote in an April report on the restaurant industry. “Yet the more challenging macro environment may delay this recovery longer than we anticipate.”

So to reach that $10 billion goal, Dairy Queen needs to emphasize value while expanding its global reach. Along the way, Bader said the company will “become more unified and much more consistent.”

There are more than 7,700 franchised DQ locations around the world, including 4,100 in the U.S. At the current rate of new store openings, it won’t be long until more than half of all locations are outside the U.S.

“We want to continue to grow our presence around the world,” Bader said. “That includes the countries we’re in now as well as beyond.”

There are more than 1,600 locations in China, where a majority of last year’s 419 new locations opened. Dairy Queen for decades only sold treats in China but recently opened a few “Blizzards and burgers” stores that have landed well.

“We have a franchisee very interested in that,” Bader said.

But there’s still plenty of room to grow in the U.S. Last year about a third of Americans went to Dairy Queen at least once, and, on average, they visited three times throughout the year. That’s about par for the top-25 restaurant chains, according to Circana data HSBC compiled.

While many Americans associate DQ with cones, sundaes, ice cream cakes and Blizzards, the company has been relentless about expanding its savory food offerings. Already, Dairy Queen has an 11% share of the country’s chicken strip market, and food sales comprise roughly half of revenue at DQ Grill & Chill locations domestically.

And though the rate of new U.S. Dairy Queen restaurants has slowed in recent years, Bader said there’s still room to conquer new territory.

“Dairy Queen started as much more of a Midwestern and rural brand,” he said. “We have no locations in Manhattan. We have very few locations in L.A. and downtown Chicago.”

Bader, 60, became CEO in 2018. He emphasized that brand cohesiveness is a key to growth: “The more we become more unified in our menu, in our positioning, in our appearance, in our execution, the stronger we’ll be as a brand.”

International Dairy Queen, which earns franchisee-paid royalties, brought in a $97.8 million profit on $257 million in revenue last year, according to franchise disclosure documents.

Bader said Dairy Queen is “a big brand but a small company,” with about 550 corporate employees.

“I give our franchisees a lot of credit, because it’s about creating those experiences at the restaurant that help differentiate DQ from many of our competitors.”