Growth | February 2010 | By Robin Van Tan

Growing Global

Page 3
Esablishing a global presence can help buffer a brand during the U.S. recession.
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At the London store and other potential international locations, the usual challenge for Chipotle—finding a way to locally source food—shouldn’t be much of a challenge at all, Arnold says.

“We do as much of that as we can in the U.S.,” Arnold says. “In Europe we think that’s going to be more feasible to do based on the way the European food culture is.”

Some food issues, such as getting tortillas made to Chipotle’s recipe, weren’t as easily solved. After working for several months, Arnold says Chipotle is comfortable with how the menu item is progressing.

Despite Chipotle’s plan to follow its existing model at the London store, there will be one change.

“We’re in the process of developing new packaging that has new copy on it,” Arnold says. Words such as flavor will be substituted with the Queens English spelling (“flavour”) on the updated package copy.

Dairy Queen: Now Made in ChinaDairy Queen's treats have worldwide appeal.

In the U.S. and Canada, Dairy Queen appeals to a demographic who remembers growing up on the company’s cones and sundaes. But in Shanghai and Beijing, DQ is “the Starbucks of ice cream,” says Brad Houser, executive vice president of international Dairy Queen.

“Although it’s sort of a senior citizen of brands here in the U.S. and Canada, it’s really kind of neat to see it in China where it’s that cool brand young kids actually hang out at,” Houser says.

Of the three quick serves QSR interviewed for this article, Dairy Queen is the most veteran in the international expansion game. It has about 640 stores in 16 countries outside of the U.S. and Canada, and the company opened its first China location in Beijing in the ’90s.

“This year, we will probably hit around 360–370 stores in China,” Houser says. “The goal is to hopefully be close to 500 stores by the end of 2011.”

Although it’s an ambitious objective, Houser says it’s a reasonable one.

“The good thing in China is that you can sign a deal one month and have the store open the next month,” he says. “The construction and timeline to get things going is a lot shorter than it is domestically.”

Because of different labor laws and a culturally instilled work ethic that has citizens working round the clock, Houser says franchisees have been known to go from signing the paperwork to opening in as little as three weeks. Sometimes the company will open 15 to 20 Chinese locations in a single month.

“If they’re focused, they get things done,” Houser says.

Dairy Queen can also develop quickly because it doesn’t have the strict site-selection requirements that some chains do.

“Developers and landlords usually like working with us because there isn’t really a formula to the layout,” Houser says.

“Although it’s sort of a senior citizen of brands here in the U.S. and Canada, in China it’s that cool brand young kids actually hang out at.”

But while its stores have varied layouts, they all have the same ambiance—which is nothing like what customers find in its U.S. locations.

Once Dairy Queen realized young customers wanted to spend more time in stores hanging out with friends or surfing the Web, they adjusted the decor to lend a more modern feel.

“It’s less sort of that tables-and-chairs setup and more casual, contemporary seating,” Houser says.

Dairy Queen also modified its menu to include Asian-friendly flavor profiles such as green tea and jasmine tea ice creams.

“You want to ensure that you are that global brand and you’re adapting to the local taste, but you don’t want to go too far down the line where you’re that local brand itself,” Houser says. “We maintain the consistency of key products on the menu and then adapt from those to the local tastes.”

For example, Dairy Queens worldwide offer the same soft-serve options and chocolate and strawberry toppings—and the Oreo blizzard is the top-selling blizzard in the world.

The sizes offered also were tweaked in Asia because of cultural preferences.

“The portions are a little smaller because Chinese consumers don’t eat as much and it has to be affordable,” Houser says.

But while Dairy Queen started to offer burgers and fries in Thailand, it plans on selling only ice cream at its Chinese stores.

“In the rest of the world, we’re primarily known for our treats menu,” Houser says.