China screams for ice cream

International Dairy Queen Inc., the U.S. fast-food and ice-cream chain owned by Warren Buffett’s Berkshire Hathaway Inc., plans to increase its outlets in China by more than 60 percent by the end of next year.

The company aims to have more than 500 stores in the world’s most populous nation by December 2011 from more than 300 now, Jean Champagne, chief operating officer of Dairy Queen’s international groups division, said late last month in Shanghai. Dairy Queen, Nestle’s Haagen-Dazs and Allied Domecq’s Baskin-Robbins are setting up more stores in the world’s fastest-growing major economy as consumers in their home countries curtail spending in the wake of a global recession. China is Dairy Queen’s fastest-growing and second-largest market globally, trailing only the U.S.

Champagne said at a briefing, “As the country continues to develop, there will be a whole new customer base that will continue to know about DQ,” CEO John Gainor said at the same news conference. “We’re very excited about our growth in China.”

The Edina, Minn.-based chain plans to introduce 15 new flavors in China next year to cater to local customers, Champagne said. The new flavors will include goji berry, which will be exclusive to China, he said.

Dairy Queen targets 130 to 135 new outlets this year and more than 145 in 2011 in China, Champagne said.

While the company will continue to grow in Beijing and Shanghai, it also plans to expand in smaller cities, Gainor said.

“As China’s disposable income increases, it allows us to penetrate into second- and third-tier cities,” he said. “In the next 10 to 15 years, China will be a very significant part of our portfolio.”