This Popular Coffee Chain Is Currently Outperforming Starbucks and Dunkin'
If you haven't been to a Dutch Bros. coffee shop yet, you likely live in a state in the eastern half of America. That's because the chain is already spread out far and wide across the West, and is now rapidly expanding in Texas and the rest of the Great Plains.
But the number of locations does not tell the real story behind this chain's success: for that story, look to Dutch Bros.' latest sales numbers and compare them to those of Starbucks and Dunkin', the two largest coffee chains in the nation. In terms of same-store visits, Dutch Bros. is crushing its major competitors.
Founded in Grants Pass, Ore. as a pushcart espresso vendor by brothers Travis and Dane Boersma in 1992, Dutch Bros. took many years to grow into the powerhouse coffee chain it is today. And with a fiercely loyal customer base and a highly efficient drive-thru business model—which was at the crux of its pandemic success—Dutch Bros. looks set to keep on growing.
Here's what you need to know about this customer-favorite brand that's smoking the competition. For more, check out Wendy's Just Struck a Deal That Will Drastically Change the Way It Operates.
Dutch Bros. is big and getting bigger
At present, there are more than 470 Dutch Bros. locations, according to The San Joaquin Valley Sun, and more are on the way. Though the first Dutch Bros. in Texas opened earlier this year, a Placer.ai report states that the chain hopes to have around 100 locations in that state alone by the end of the year 2023. The West Coast states are currently the most heavily saturated with Dutch Bros. shops, though Arizona, Idaho, and Colorado also have many locations.
A pandemic success story
Before the coming of COVID-19, Dutch Bros. was doing just fine, but they hardly stood out as a threat to Starbucks and Dunkin'. That all changed in April 2020, mere weeks into the pandemic. According to Placer.ai, that month saw visits to Starbucks and Dunkin' plummet by a significant 60%, while Dutch Bros. visits only dropped by 11.4%.
This modest drop was largely due to the chain's well-established drive-thru business model, which allowed for minimal customer contact during transactions. And in the spring and into the early summer of 2020, Dutch Bros. not only made up for that 11.4% drop in visits but saw its customer traffic surge by more than 50% even as visits to Starbucks and Dunkin' remained below pre-pandemic levels.
Dutch Bros. is still outperforming its rivals today
As it turns out, Dutch Bros. success—and its outperforming of Dunkin' and Starbucks—was no mere pandemic fluke. Currently, the chain is still outperforming the giants. Data from Placer.ai shows that as of September 2021, Dutch Bros. received 113.8% more visits than it had in October 2019, compared with an 11.9% increase for Dunkin' and a 1.8% decrease for Starbucks.
A customer favorite
Dutch Bros. is not only seeing more growth in terms of locations, but it's seeing better same-store sales and increased customer loyalty. According to Placer.ai, in September of this year, visits to Dutch Bros. locations were up approximately 112% compared to the same time period in 2019. (Q3 of 2019 is used as a basis for comparison in the report in general.) Dunkin', meanwhile, saw only an 11% rise in traffic during that month, while Starbucks saw a dip of 3.4%.
Starbucks and Dunkin', beware
Dutch Bros. has only been a publicly traded company for a few weeks, but if the company's IPO is any indicator, it could be poised to take an even bigger share of the fast-food coffee market from the major coffee chains.
The Dutch Bros. initial public offering on September 15 saw around 24.2 million shares offered at a starting price of $23, according to a Dutch Bros. press release. Within hours, the stocks were trading for more than $36, according to Yahoo! Finance, and at present BROS shares are valued at $55.22. The stock's all-time high so far is $60.05, more than 2.6 times its value at the IPO.
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