Ice Cream Market Hot For Dairy Queen

(Thursday, July 23, 2009) - INTERNATIONAL Dairy Queen Inc said yesterday it plans to open 500 more stores in China over the next five years as consumers are more inclined to counter recession with sweet treats in emerging countries.

The world's leading ice cream chain and its Chinese partner Shanghai Shida Catering Management Co Ltd yesterday opened its 200th store in Xi'an, capital city of Shaanxi Province.

The United States company, which has its headquarters in Minneapolis, came to China in 1992. But it was not until 2005 that the company started its rapid expansion.

China is expected to be the company's largest market outside the US and Canada next year, John Gainor, its president and chief executive officer, said.

Dairy Queen added 100 stores in China since the second half of last year, covering the east coast area as well as inner provinces such as Hubei, Shaanxi and Sichuan.

"The economy in China has done better than the other parts of the world," Gainor said. "We know people like to treat themselves during tough times and with the high quality and affordability of our products, we believe that is one of the reasons Dairy Queen continues its growth in China."

He said sales revenue in China rose 17 percent in the first half of this year from a year earlier.

This compared to a 4 percent increase in mature markets such as the US and Canada.

"We are still very optimistic about the continued expansion of Dairy Queen as more people become exposed to the brand. We know it's the time to invest in countries that can drive our future growth," Gainor said.

Dairy Queen is part of the Berkshire Hathaway family, a company run by Warren Buffett. It manages more than 6,000 outlets in 21 countries and China is one of its fastest growing markets.

Ying Wuwei, general manager of Shanghai Shida, said the fast expansion of Dairy Queen reflected the huge potential of the ice cream market in China and future store expansion would tap more second-tier cities such as Qingdao, Kunming, Zhengzhou and Chengdu.

Dairy Queen is the largest ice cream chain in China.

Haagen-Dazs operates around 80 stores in China and Cold Stone Creamery plans to open 100 outlets over the next three to five years.

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