Dairy Queen To Add Orange Julius-Branded Smoothies To Menu

Dairy Queen is tapping its Orange Julius subsidiary to further establish its presence in the smoothie market.

The frozen treat chain said that it will offer juice drinks and yogurt-based smoothies at all of its more than 4,000 North American locations by early next year.

"We are looking to shake up not only the $3 billion smoothie category in the U.S., but also our competition," Barry Westrum, executive vice president of marketing for American Dairy Queen Corporation, said in a press release.

Westrum told Nation's Restaurant News Wednesday that the Orange Julius smoothies were more eclectic than those at other quick-service chains, and that protein powder and fresh bananas would be offered as "boosts" for a "nominal charge."

"What our consumers told us is they are looking for more variety and some of the typical things you would find in a smoothie shop [rather than at a quick-service restaurant], much more conveniently located in a Dairy Queen," he said.

The smoothies and juice drinks are available in five flavors: Orange; Strawberry; Strawberry Banana; Tripleberry, made of blueberry, raspberry and strawberry; and Mango Pineapple.

Orange Julius Premium Fruit Smoothies are made with fruit and low-fat yogurt, and blended to order. Julius Originals are a proprietary blend of juice and other ingredients originally developed more than 85 years ago by founder Julius Freed, who set out to make less acidic juice drinks.

Average retail prices for the smoothies are $2.89 for 12 ounces, $3.39 for 16 ounces, and $3.89 for 24 ounces.

A number of large quick-service chains have introduced smoothies, including McDonald's, Dunkin' Donuts and Burger King. McDonald's offers "Real Fruit Smoothies" in Strawberry Banana, Wild Berry and Mango Pineapple flavors. Burger King introduced Strawberry Banana and Tropical Mango smoothies as part of a complete menu overhaul. And Dunkin' Donuts has rotated smoothies on its menus for years, having first introduced a tropical fruit smoothie in 2007. In the past quarter it introduced a Tropical Fruit Smoothie.

Edina, Minn.-based International Dairy Queen Inc. acquired Orange Julius in 1987. At the end of 2011 it franchised 1,019 co-branded Dairy Queen and Orange Julius locations worldwide, of which 432 were in the United States. There are currently 136 Orange Julius units worldwide.

Virtually all Dairy Queen locations are franchised, and over the past five years franchisees have been adding Orange Julius as part of the process of renewing their agreements, but not without dispute, as some franchise groups sued franchisor American Dairy Queen over the added costs of converting their units.

Westrum said franchisees are on board this time, and the majority of them would be serving the new items by the end of 2012. They will be available systemwide in North America by the first quarter of 2013.

"I think our franchisees saw the market opportunity," he said, adding that the quick-service market was "saturated with low quality, kind of ubiquitous smoothies."

He continued, "The time is right now for the brand to get its fair share and more of the business."

The Orange Julius smoothies will be marketed locally in certain areas as they roll out over the next few months, followed by a national media program on television, radio, digital and social media platforms in early 2013.

Contact Bret Thorn at bret.thorn@penton.com.
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