Buffett’s Dairy Queen sees Taiwan among possible new markets, while mindful of geopolitics

By Jonathan Stempel

(Reuters) – Berkshire Hathaway-owned Dairy Queen is exploring options to expand in new markets, perhaps including Taiwan, the company’s CEO said, even as geopolitical concerns with China simmer.

Owned by Warren Buffett’s Berkshire Hathaway (NYSE:) since 1998, the fast-food chain counts China as its second-largest market, operating more than 1,250 stores there out of more than 7,000 worldwide.

Tensions between the United States and China have been rising, with some investors worried that China might invade or seek to reunify Taiwan soon.

Troy Bader, chief executive of International Dairy Queen Inc, said the company often looks to markets adjacent to existing ones, so it can take advantage of existing supply chains, when considering where to expand.

He said Taiwan “is on our list for exploration at this point,” as are Australia, India, and Europe.

“We’re going to be smart, but we’re going to continue to grow in those markets so we can be there for fans,” Bader said, referring to customers, in a May 5 interview at Berkshire’s annual shareholder weekend in Omaha, Nebraska.

Buffett told Berkshire shareholders a day later that he felt “better” about deploying capital in Japan than Taiwan, reflecting U.S. tensions with China.

He contrasted Berkshire’s increasing its stake in five Japanese trading houses with his decision in late 2022 to unwind most of a $4 billion investment in Taiwan Semiconductor Manufacturing Co disclosed just three months earlier.

“I reevaluated that in the light of certain things that were going on,” Buffett said.

Bader said Dairy Queen would be mindful of political concerns in whichever market it entered.

The Bloomington, Minnesota-based company operates in at least 20 countries, five in the Middle East.

“You need to think about them in any country you’re in,” he said. “We do not have a presence in Europe. With all that’s going on there, we’re not going to be opening stores tomorrow. The development process takes time.”

Dairy Queen sales topped $5.7 billion last year, up from more than $5.5 billion in 2021, despite distribution problems as warehouses struggled to retain labor.

Bader said the 83-year-old company is counting on greater customer use of its DQ Rewards digital app to fuel group, with more than 7 million U.S. and Canadian downloads so far.