Downsized desserts make diners feel better about tacking a treat onto a full meal, and restaurants can make more money off them by charging higher prices, said Michael Keller, chief brand officer at Minneapolis-based Dairy Queen.
“Consumers are willing to pay a little bit of a premium for the mini Blizzard,” Keller said. “That has helped our operators protect their margins.”
Surging ingredient costs are putting restaurant margins under increasing pressure. World food prices rose to almost a record in April as grain costs advanced, leading to price hikes for basics like eggs, meat and sugar. Dairy Queen, which also debuted a smaller milkshake this month, expects its ice cream costs to jump more than 10 percent this year.