Why now is the right time for Dutch Bros to go national

Not even a month into 2024 and it’s safe to say Dutch Bros has had a busy year thus far. As the calendar turned, Christine Barone officially took over the CEO role after serving as president for a little over a year. The company shared development guidance, aiming for 150 to 165 new units this year, including its initial entry into Florida in Q1. The long-term growth target is about 4,000 locations.

The company has also added three executives to its c-suite, naming Joshua Guenser as CFO, Sumitro Shosh as president of operations, and Jess Elmquist as chief people officer. And, earlier this week, Dutch Bro announced its intention to expand its Phoenix, Ariz.-based operations support center, shifting approximately 40% of its total support staff to the location by Jan. 1, 2025.   

Related: Incoming Dutch Bros CEO Christine Barone wants to drive the company toward 4,000 cafes

On paper, the nearly 850-unit drive-thru coffee chain is acting a bit like a startup. In reality, the company has 32 years under its belt, tracing its roots back to a small pushcart operation in Grants Pass, Ore.

That said, for Barone, the timing of these updates – three years after the company hit the public market – is no coincidence.

“As I look at Dutch Bros, I feel like we are at an awesome inflection point – the beverage space, the level of experimentation consumers are taking on, the level of trial across categories and into new categories. It feels like a special time,” she said during an interview last week at the ICR Conference in Orlando.

No doubt the coffee/beverage space is hot. Consider Starbucks’ and Dunkin’s consistent performance, or fledgling chains on steep growth trajectories, like 7 Brew, Scooter’s, The Human Bean, Bluestone Lane, Black Rock Coffee, and so many more. Even McDonald’s is jumping into the ring with its new CosMc’s concept. Consumers have proven they want such an abundance of beverage offerings and Barone is confident Dutch Bros will continue to provide them with a differentiated experience as the category intensifies.

“We’re not copying what others are doing but have rather been building what we do for over 30 years. There is a lot of space in this market and, for us, when you combine where we are with consumer exploration and how the employment experience is now coming first at every single company – Dutch Bros has those two things in spades in a way no one else does,” Barone said.

To keep pace with the exploration piece, Dutch Bros offers items like its proprietary energy drink, Blue Rebel, or its new protein coffee lineup. Guests can fully customize their orders and employees – or “broistas” – guide them through the process. The goal, Barone said, is to keep it simple for them. Dutch Bros’ rewards program has also proven to be resonate with its guests, with nearly 65% of all transactions generated through the program.

On the employment side, Dutch Bros recently made significant wage investments, including changes to the shop manager pay structure. Barone said the company also prioritizes a strong in-store culture to ensure a positive customer experience. It’s a virtuous cycle, she said – happy employees equal happy customers. This seems to be more than just lip service, by the way: Dutch Bros was recently named America’s Favorite Brand in the QSR segment by Technomic and has also been named a 2024 "Forbes Best Brands for Customer Service, powered by HundredX."

“One of our priorities is to empower our team to connect with our customers and make the right decisions for those customers on the spot. If they see you’re having a bad day, they’ll hook you up. They’re never going to get in trouble for that. We have sticker days and our stickers are very popular. I visited a restaurant recently and a Taylor Swift song came on and the entire team started dancing,” Barone said. “What other job can you be with folks you respect and have fun too? It’s unique.”

Barone’s focus as she takes the lead is to not lose that uniqueness as the company expands. That’s why the company has added new leaders who have experience with brands that have scaled. That’s why the company recently announced its support center change. That’s why the company is beefing up its marketing investments to not only build brand awareness but also deepen relationships with customers through its rewards program. And that’s why the company recently invested in manager wages.  

“What we’re focused on as we scale is not getting too big too fast or too corporate too fast, and making sure we have the right processes in place and data in place to make the right decisions,” Barone said. “Our job is to provide a compelling experience and to make sure our broistas have the stage to provide that experience.”

Contact Alicia Kelso at [email protected]