Some international Dairy Queen restaurants look quite different from their counterparts in the United States, including this location at China’s Shenzhen Bao’an Airport.
Ice cream is big business in Thailand. With more than 500 Dairy Queen locations, it’s one of the largest international markets for the brand, and for master franchisee Minor Food it’s viewed as a key growth vehicle with plenty of runway ahead.
“The only two seasons are hot and hotter, or rainy and rainier,” said Anhul Chauhan of Thailand’s tropical climate that makes it ideal for year-round ice cream sales. “And the Thai customer has a sweet tooth.”
Chauhan is the CEO of Bangkok-based Minor Food, which as part of Minor International operates and franchises 27 restaurant concepts with more than 2,400 outlets across 24 countries. Among its other concepts are Burger King, Bonchon and Swensen’s, and last year Minor International acquired the Sizzler brand with rights to expand the steak and salad bar chain in global markets excluding the United States, Puerto Rico and Guatemala. The deal also gave Minor International control over Sizzler’s portfolio of 64 franchise units in Thailand and 10 in Japan.
Minor Food in 2022 had revenue of 27.4 billion baht, about $786 million, across its restaurant and food manufacturing businesses.
The company opened 20 Dairy Queens in 2023 and plans to accelerate new development this year. “This is a 1,000-store market,” said Chauhan, and Minor also operates a handful of stores in the Maldives, with more to come. Same-store sales for its DQ business grew 23 percent last year, he noted, “and that’s off a very strong year in 2022.”
Anhul Chauhan leads Minor Food, which is growing DQ throughout Thailand.
Dairy Queen is a hugely recognizable brand in the Thai market, with the first store opening there in 1996. Consumers, said Chauhan, are drawn to U.S. and other Western brands for their “high-quality, safe food in a clean environment,” and at Dairy Queen the churn of innovation keeps them coming back.
Minor Food has its own innovation center and works with International Dairy Queen to co-create flavors such as a Durian Black Sticky Rice Blizzard, featuring the tropical fruit famous for its distinct odor. “It’s an acquired taste,” laughed Chauhan as he noted a Thai Tea Blizzard broke sales records for limited-time offer launches last year.
“We can respond very fast to market trends,” he continued, such as with the Ovaltine Volcano Blizzard. Many Thai consumers grew up with the malted milk mix, which has “this retro kind of appeal. It has a kind of nostalgia,” he said.
Remaining relevant to consumers—and continually appealing to the younger set—are essential to Dairy Queen’s continued success in Thailand, and Minor Food invests on both fronts with a range of marketing campaigns. “Engagement activations,” such as a pop-up store at Bangkok’s CentralWorld shopping plaza featuring a mix-and-match soft serve bar, games and photo corner, help the brand get in front of younger customers, said Chauhan.
“If we can grab their attention and hold it for a minute, we’ll be successful,” he said. “It’s difficult, but they are the customers of the future.”
Minor Food is likewise investing in the test of new store formats. The majority of its Dairy Queens are small-format kiosk shops in shopping malls, but the company is experimenting with a DQ lounge concept that offers seating in a relaxed, casual environment. The aim, said Chauhan, is for customers “to have what we call a sweet pause.”
At press time, the first DQ lounge was set to open in December, and its debut is one example of how Dairy Queen draws on its international presence to gauge the performance of new formats and consider bringing them to the U.S., said Nicolas Boudet, chief operating officer for Dairy Queen’s international business.
Nicolas Boudet is the chief operating officer for Dairy Queen’s international business.
Hired in September 2022, Boudet came to Dairy Queen from Wingstop, where he was senior vice president of global development and president of international. The opportunity at the Minneapolis-based restaurant company known for its soft-serve Blizzards and burgers, he said, is to take a brand with a “storied growth profile” and tap into its potential outside the U.S.
Dairy Queen further bolstered its international team in May when it hired Chris Wren as vice president of development and Greg Kirian as vice president of marketing. Both have held leadership roles at Wingstop and Yum Brands, among others.
Of Dairy Queen’s 7,000-plus locations, about 2,500 of them are international, “and that’s just the beginning,” said Boudet, who was tasked with refining the brand’s expansion strategy to “focus on markets where we believe we can win.” Taking a methodical approach, he and the team are evaluating factors such as market attractiveness—“Is there enough spend per capita to support a Western brand such as Dairy Queen,” said Boudet—supply chain strength and the caliber of franchisees who need to be capable of quickly scaling to at least 50 to 100 stores.
New target markets include Hong Kong, Saudi Arabia, Singapore and Australia, and more expansion is on tap for China, where Dairy Queen has more than 1,300 stores and through a new agreement will add 180 more with franchisee CFB Group.
A Durian Black Sticky Rice Blizzard was among the many limited-time offers introduced in Thailand last year, where Minor Food CEO Anhul Chauhan says menu innovation plays a crucial role in attracting customers.
CFB Group, through its Shanghai Shida Catering Management Co. subsidiary, will open 180 food-centric restaurants in China by 2034. The deal will further boost the group’s DQ unit count, which already sits at 1,000-plus, and comes after CFB in 2022 committed to opening 600 new treat-focused stores.
Existing Dairy Queens in China mainly serve the brand’s ice cream treats and some light snacks, noted Boudet, and the shift to also developing food-centric restaurants comes as the brand aims to capture more consumers in various dayparts. “We’ll do so in a cohesive way and present a blended perspective of what people can find at Dairy Queen,” said Boudet.
The menu composition and asset design are underway, he continued, and will be recognizable as Dairy Queen “but also uniquely Chinese.” Like with the lounge format in Thailand, Boudet said the rollout of food-focused locations in China will help inform how Dairy Queen approaches expansion in other markets where treats lead.
Ranked No. 19 on the Franchise Times Top 400 list of largest franchise brands, Dairy Queen finished 2022 with global sales of $5.7 billion, up 2.1 percent from the prior year. It’s a subsidiary of billionaire investor Warren Buffett’s Berkshire Hathaway Inc.