By Mike Esterl
It's getting harder to sell a kid a soda.
American Dairy Queen Corp. said Thursday it would remove
carbonated soft drinks from its children's menu in September,
becoming the latest fast-food chain to make such a move amid
obesity and health concerns.
In a twist, Dairy Queen is owned by Warren Buffett's Berkshire
Hathaway Inc. Mr. Buffett is an avid Cherry Coke drinker and a
loyal former Coca-Cola Co. board member. Berkshire Hathaway is the
biggest shareholder in Coke, which derives about 70% of its sales
from soda and is the leading beverage supplier to U.S.
restaurants.
Dairy Queen confirmed that Coke is its biggest supplier. PepsiCo
Inc. and Dr Pepper Snapple Group Inc. also supply Dairy Queen.
Children's meals represent the newest no-go zone for the soda
industry, whose U.S. volumes have fallen 10 straight years as
health-conscious consumers switch to water and other drinks. Coke,
PepsiCo and Dr Pepper Snapple agreed to remove soda from schools in
2006 and say they don't market sugary drinks to children.
Restaurants have been feeling heat from consumer and
public-health groups like the Center for Science in the Public
Interest, the Alliance for a Healthier Generation and
MomsRising.org to make children's menus healthier. First Lady
Michelle Obama's "Drink Up" campaign also encourages Americans to
drink more water.
McDonald's Corp. removed soda from its children's Happy Meals
last July and promotes water, milk and juice as beverage choices.
Wendy's Co. dropped soda last autumn and Burger King, owned by
Restaurant Brands International Inc., made the move in February.
The Subway, KFC and Olive Garden chains also don't promote soda
with kid meals.
Explaining its move Thursday, Minneapolis-based Dairy Queen
cited "concern regarding children's nutrition" and said it is
working to offer "healthier options" on its menu. Dairy Queen
already offers other beverage choices including milk and water for
kid meals, and has been adding new food options including turkey
wraps and bananas.
A Dairy Queen spokesman said the company, which has 4,800 U.S.
outlets, didn't consult with Mr. Buffett or Berkshire Hathaway
about the decision. Mr. Buffett's office didn't respond to a
request for comment. Coke said it doesn't comment "on our
customer's business."
Mr. Buffett told attendees at Coke's annual shareholder meeting
last month that a quarter of the calories he has consumed over the
past 30 years are from the company's namesake cola. "I've got to
tell you, I feel healthy," added the billionaire investor, whose
holding company owns 9% of the beverage giant.
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