Forget Starbucks, This Expanding Coffee Chain Continues Rocketing Toward Profitability With a Community All Its Own

Dutch Bros, an Oregon-based drive-thru coffee chain, is aiming to stand out with its blend of customer friendliness, distinctive drinks, and fast growth. The company has been gaining momentum since its initial public offering price in 2021, with 39 new stores in just the third quarter of 2023, boosting its overall presence to 794 locations. Revenue jumped to $265 million, marking a 33% year-over-year increase and showcasing how Dutch Bros is winning hearts.

Dutch Bros’ Broistas, the drive-thru employees who take orders and serve drinks, won second place on Forbes’ first-ever best customer service list for the quality of their people. The company placed 10th overall for best customer service this year. “Amazing” and “friendly” were some of the terms used to describe the workers, who give out monthly stickers to drive engagement and create word-of-mouth.

Dutch Bros President Christine Barone, a former Starbucks executive, notes that the company continues to invest in the communities, partner with local high schools, and raise funds for local charities. Giving-back initiatives include Dutch Luv day, Drink One for Dane, and Buck for Kids, raising $960,000 for nonprofits focused on mentoring and supporting youth in local communities.

Dutch Bros has a robust 31% company-operated shop contribution margin and a notable increase in average unit volumes (AUVs) by almost 20% since 2019, demonstrating that focusing on people doesn’t just build a loyal fan base but also drives impressive financial results. As Dutch Bros steams ahead with its ambitious goal of 4,000 total shops, the challenge will be to scale without losing the essence that makes it special.

Starbucks, with its 38,038 stores worldwide and an 8% uptick in global comparable-store sales, certainly sets a high bar. Yet Dutch Bros continues carving out its own success story with an impressive 23.9% surge in shop count year over year and a leap in net income to $13.4 million for the third quarter of 2023 from a modest $1.6 million the previous year.

Dutch Bros remains a relatively recent entry in the stock market, having only launched its IPO in September 2021 at a price of $23. Share prices quickly rose to highs above $60 before falling back to a more recent range near $30. Competition is one of the biggest challenges the company faces, along with a hefty debt incurred as part of its growth processes. Interest on this debt came out to more than $9 million in the most recent quarter, putting a damper on net income and adding a further challenge to reaching its expansion goals.

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