Dutch Bros Inc. (Dutch Bros) operates and franchises drive-thru shops that focuses on serving hand-crafted beverages.
Menu
The company sells a wide range of customizable hot, iced, and blended beverages.
Coffee: Coffee-based beverages make up 50% of the company’s menu mix. In the company’s shops, it utilizes premium La Marzocco machines to handcraft espresso shots for both the company’s hot and cold custom classic and signature coffee beverages. The company also sells its proprietary coffee-b...
Dutch Bros Inc. (Dutch Bros) operates and franchises drive-thru shops that focuses on serving hand-crafted beverages.
Menu
The company sells a wide range of customizable hot, iced, and blended beverages.
Coffee: Coffee-based beverages make up 50% of the company’s menu mix. In the company’s shops, it utilizes premium La Marzocco machines to handcraft espresso shots for both the company’s hot and cold custom classic and signature coffee beverages. The company also sells its proprietary coffee-based ‘Freeze’ blended beverages and cold brew. The company imports and roasts its own coffee beans. The company’s Private Reserve coffee is a 100% Arabica three-bean blend, roasted by Dutch Bros in its Grants Pass, Oregon or Melissa, Texas facilities.
Energy: 25% of the company’s menu mix is based upon its proprietary Dutch Bros Rebel energy drink, which is highly customizable with flavors and modifiers and can be served blended or over ice. The company’s energy platform helps unlock the afternoon daypart and helps it appeal to a diverse customer base.
Refreshments and Other: The remaining 25% of the company’s menu mix is a wide variety of teas, lemonades, smoothies, food, and sodas offering caffeine-lite and caffeine-free beverages that can be enjoyed across all dayparts and by customers of all ages.
Dutch Rewards Loyalty Program
Dutch Rewards is the company’s app-based digital loyalty program. In 2024, approximately 68% of all transactions were attributable to Dutch Rewards members, up from approximately 65% in 2023.
Dutch Rewards uses a spend-based model, where customers collect points that can be redeemed for rewards. These rewards can be utilized to receive free drinks or shared with others. Points and rewards generally expire after six months.
The company offers members the ability to preload funds on their account and pay through its app, a function it calls Dutch Pass. In addition to being convenient for customers, Dutch Pass enables the company to increase its speed of service by reducing the payment collection time. The company’s Dutch Pass functionality also allows users to purchase and share digital gift cards, providing more customers the opportunity to share in the Dutch Bros experience.
The company utilizes Dutch Rewards to communicate and interact directly with its customers and drive traffic. The company sees an opportunity to continue enhancing the sophistication of its segmentation and targeting efforts, using consumer insights to drive behaviors that the company expects will create lasting value. The company intends to continue investing in consumer insights and moving toward more personalized marketing to offer targeted messaging, offers, and rewards that enhance the Dutch Bros experience at an attractive return on investment.
Mobile Order
In 2024, the company launched mobile order functionality within its Dutch Rewards app. As of December 31, 2024, over 95% of systemwide shops had mobile order functionality enabled. In most cases, customers can choose to park and pick-up at the company’s walk-up window or pick up their order in its drive thru. The company’s mobile order system interacts with its existing point-of-sale and kitchen display system, easing integration with its operations.
Shops
The company primarily utilizes a drive-thru model: approximately 90% of its business is conducted through the drive-thru with the remaining 10% conducted at its walk-up windows. The company’s shops and its real estate strategy are designed from the ground up to support this drive-thru centric business.
Although the company’s shops typically have a smaller overall footprint than other drive-thru formats, essentially all of the company’s square footage is used to support the production of beverages. The company typically target lots that are at least 25,000 square feet to handle substantial car volume. Except for a handful of legacy ‘coffee houses,’ which do have lobby areas, the company’s shops are designed to enable customers to drive-thru or walk-up and enjoy their beverage off premises. Most of the company’s shops feature either a single or double drive-thru window with multiple feeder lanes for traffic flow and a walk-up window.
Long-Term Franchise Partners
The company utilizes a mixed model, where it continues to encourage its franchisees to develop within their existing operating areas while developing new regions with company-operated shops.
Growth Strategies
The company's growth strategies are to open new shops; assume an innovation leadership position within the beverage industry; and build brand awareness in new and existing markets.
Operations
Coffee Procurement and Roasting
The company is actively involved in the sourcing, roasting, packaging, and distribution of coffee beans.
The company partners with third-party importers and exporters to purchase and import its green coffee beans. Through this relationship, the company sources high-quality coffee beans from across Central and South America.
Since 2021, the company has partnered with Enveritas, an independent nonprofit organization that provides sustainability verifications for coffee.
The company roasts all its coffee in its roasting facility in Grants Pass, Oregon and Melissa, Texas. The company roasts its coffee bean varietals to specific profiles designed to highlight each of the coffee bean's unique flavors and aromas. After the coffee beans are roasted, the company blends them to create its signature Private Reserve espresso blend.
The company packages and ships its Private Reserve, Decaf and White Coffee espresso blends to several distributors across the country that supply all its company-operated and franchised shops.
Sourcing and Supply Chain
The company also manufactures its own proprietary Dutch Bros Rebel energy drink via a co-bottling and co-packaging relationship. In 2023, the company began rolling out tap systems and distributing its Dutch Bros Rebel energy drink via a ‘bag in a box’ system for use in shop beverage taps.
Intellectual Property
The company owns many registered trademarks and service marks in the United States, the most important of which might be its trademarked Windmill logo. Other important trademarks include the company's 'Dutch Bros,' 'Dutch Bros Coffee,' 'Dutch Bros Rebel,' and 'Dutch Bros. Blue Rebel' word marks and the company's recognizable Dutch Bros sign logo.
Seasonality
The company's business is subject to seasonal fluctuations that impact its revenue and shop gross profit margins. The company typically experiences higher nominal system sales in the summer months, which impacts revenue and shop gross profit margins in its second and third quarters of its fiscal year (year ended December 2024).
History
Dutch Bros Inc. was founded in 1992. The company was incorporated in 2021.