Dutch Bros posted 8.3% same-store sales growth in the second quarter, making it one of the top-performing public QSRs of the period. Only Cava and Burger King reported higher metrics at 9% and 8.5%, respectively, according to Restaurant Dive’s tracking of the fast-food setting. The coffee chain has now achieved 13 consecutive quarters of same-store sales growth and 8 consecutive quarters of transaction growth since its public debut in 2021.
The team behind the growth
The company’s expansion relies heavily on a stable, internal workforce. Dutch Bros has a pipeline of operator candidates with an average tenure of eight years at the company, ready to lead new locations. These leaders typically started as employees and worked their way up the ranks. “All of our operators today have started as Bro-istas and worked their way up through the system,” CFO Josh Guenser said. He added that the chain focuses on ensuring staff have the tools they need to provide a consistent experience.
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Site selection and density
Dutch Bros has refined its site selection process to identify high-potential locations within contiguous markets. The chain uses data to predict performance based on past openings. Management teams also travel to new markets to assist with training and opening procedures. This effort aims to create a daily routine for customers by placing shops closer to homes and workplaces. For example, a newly opened location in Chicago is already annualizing to approximately $7 million in sales.
The strategy relies on a simple concept: if a line gets too long, the chain opens a new shop nearby to serve those customers more conveniently. Guenser noted there is significant pent-up demand and an opportunity to drive brand awareness further.
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Acquisitions and conversions
Growth also comes through acquiring existing drive-thru operations. Earlier this year, the chain purchased 20-unit Clutch Coffee to quickly expand in the Carolinas. Now, Dutch Bros has proposed buying up to 65 locations from the bankrupt Salad and Go chain across Arizona, Nevada, Texas, and Oklahoma. The company prefers these sites because they feature drive-thrus and boxes of similar size to its own ground-up developments. “They’re great real estate, so we’re excited to be able to take on those sites,” Guenser said.