Dairy Queen introduces Stackburger line amidst 2021 sales surge.

• The fast-food chain, Dairy Queen, is broadening its menu to include more burger options, shifting its focus away from Blizzards and other sweet treats.
• Dairy Queen's latest menu expansion in two decades includes five burger varieties for U.S. customers.
• For 25 years, Dairy Queen has been owned by Warren Buffett's holding company, Berkshire Hathaway.

The fast-food chain, Dairy Queen, is broadening its menu to include more burger options, shifting its focus away from Blizzards and other sweet treats.

Dairy Queen's latest menu addition is a Stackburger, featuring five burger flavors for US customers: Flamethrower, Loaded A1, Bacon Two Cheese Deluxe, Two Cheese Deluxe, and the Original Cheeseburger. These burgers are available in one-third or one-half pound sizes, hence the name Stackburger.

DQ Grill & Chill locations in the US will permanently feature burgers on their menus, accounting for 72% of Dairy Queen's more than 4,300 restaurants. Additionally, the Stackburger line will be introduced in Canada.

Dairy Queen is not the only restaurant chain expanding its menu to attract customers. Panera Bread has introduced flatbread pizza to increase dinner orders, while IHOP previously changed its name to IHOB to promote its burgers.

Dairy Queen, a fast-food chain owned by Warren Buffett's holding company for 25 years, generated a net income of $84.3 million in 2021, accounting for a small portion of Buffett's empire's $89.8 billion net income attributable to shareholders. In 2021, Dairy Queen's annual revenue increased by 18% to $224.7 million, according to franchise disclosure documents.

The official launch of International Dairy Queen on Tuesday marks the culmination of a five-year process of reevaluating the chain's menu, initiated by CEO Troy Bader upon taking over the company. The goal was to identify what customers truly desired, and the company has been working towards that end.

First, Dairy Queen revamped its chicken strip offerings before tackling burgers.

Bader stated that the strategy being implemented is one of the first true menu strategies in the Dairy Queen system in a long time.

In Southeast markets, food offerings accounted for the majority of sales, surpassing sweet treats. Customers who bought their lunch or dinner there often purchased a Blizzard or ice cream cone as well.

Several years were spent improving Dairy Queen's burgers, with the process beginning in 2019. The company introduced a new airy yet sturdy bun that could handle the weight of three burger patties. Additionally, Dairy Queen replaced its cheese options with white cheddar and a sharper American cheese.

Bader stated, "Although we were pleased with our burgers, we knew there was room for improvement."

The chain put the Stackburgers to the test in over 90 locations across the US and Canada for almost a year.

The pandemic caused delays in the launch of Dairy Queen's new product, which was originally scheduled for late fall in 2021. To avoid leaving franchisees in a lurch, the chain postponed the launch due to a nationwide labor crunch that worsened supply chain issues. Bader explained that the chain wanted to ensure its vendors had enough employees to meet the demand for the product.

Despite the pandemic causing lockdowns and fear about visiting drive-thru lanes, Dairy Queen sales fell significantly for six weeks in the spring of 2020. However, its business rebounded quickly after that month and a half.

"Since then, our sales have consistently been on record," he stated.

In the two-year period from 2019 through 2021, the chain's U.S. same-store sales increased by 17%.

Dairy Queen has observed a rise in units sold by double digits since the launch of Stackburgers on Feb. 7, without any advertising.

Dairy Queen is not following suit with its fast-food competitors by testing or adding plant-based burgers.

"Bader stated that they didn't want to introduce too many new items for their franchisees due to the labor situation and the ongoing monitoring of plant-based proteins' role in the Dairy Queen system."

Berkshire Hathaway is set to hold its first in-person annual shareholders meeting since the pandemic on April 30. Meanwhile, Dairy Queen has decided to focus on pre-packaged items, such as its nondairy Dilly bars, for the safety and comfort of its investors.