Berkshire Hathaway investors who needed a sugar rush at Saturday’s annual meeting were in luck. Berkshire-owned See’s Candies and Dairy Queen both had popular booths on the exhibit floor.
“People need their candy,” said See’s Candies president and CEO Pat Egan. But inflation is a concern.
Egan noted that See’s has raised prices for some products due to higher costs for ingredients and packaging. But he added that a lot of what the company needs to produce its candy is sourced from America, which means that there are fewer worries about higher overseas shipping costs.
Egan said last year was the company’s best year for sales ever, with revenue up 26% from pre-Covid levels of 2019. He added that e-commerce sales were particularly strong.
Dairy Queen CEO Troy Bader said the ice cream chain is also doing well, especially since it has added chicken strips, burgers and other lunch items to the menu.
Still, inflation is a big issue for its consumers.
“Inflation is hot. Consumers are spending more on housing, fuel for our vehicles, utilities. Heath care, on and on and on. The discretionary income we have is smaller,” Bader said.
He added that higher labor and equipment costs are a challenge for Dairy Queen franchisees too. That’s why many have chosen to raise prices for some menu items.
But Bader said Dairy Queen franchise operators have to “thread the needle” because the chain doesn’t want to lose customers. Price hikes are necessary to protect profit margins. The risk though is that consumers may get turned off, which would hurt sales.