Dutch Bros’ 30-plus-year resume as an innovator has helped it defy traffic trends over the decades. It connects with multi-generational guests through launches like Sweet Cereal Sips, Brownie Batter Lattes, and even a March decision to hand over a rubber duck to customers on visits. But what makes Dutch Bros’ outlier performance of late unique, CEO Christine Barone said, is how early stages many of its drivers are.
Firstly, from a growth perspective, it took Dutch Bros 33 years to reach 1,000 locations, which it did on February 7 in Orlando, Florida—some 3,000 miles from the original pushcart in Grants Pass, Oregon. Dutch Bros nearly doubled in size from September of 2021 (the year it went public) to this past August (getting to 912 at the time). It’s opened 30 or more restaurants for 15 consecutive quarters. That includes 151 across fiscal 2024 and 30 in Q1 2025 to start the year, with at least 160 planned for the full calendar.
Dutch Bros’ next target is 2,029 shops by 2029—which would require roughly 200 openings per year from 2025–2029—and a total addressable fleet of more than 7,000 U.S. locations. That’s well above the 4,000 the company outlined at its IPO. Dutch Bros told investors the current map alone, without even adding new states, could handle 3,500 restaurants.
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Dutch Bros’ strategy of tapping internal leaders to open new areas has swelled to a pipeline of 450 operator candidates, with an average tenure of more than seven years. That’s nearly doubled since 2021. In 2024, Dutch Bros enhanced its real estate development team by increasing resources in market planning and expanding with new members in construction and site acquisition. It supported efforts with enhanced data, tools, and processes, Barone said. Brian Cahoe, formerly the CDO of KFC U.S., came onboard in February in the same role as well.
So, from a sheer density perspective, Dutch Bros has been introducing itself to guests at a far faster clip than any time in its history. However, expansion is just one corner of the potential.
The two other significant, yet young, levers are digital engagement and food.
Last year, Dutch Bros shared a transaction-driving strategy focused on three foundational initiatives to elevate traffic—category-wide innovation, more paid advertising, and growth in its Dutch Rewards program as the primary avenue for targeted customer marketing.
Dutch Bros in Q1 posted blended same-store sales growth of 4.7 percent (two-year stack of 14.7 percent). Traffic rose 1.3 percent. At company-run units, the figures hiked 6.9 (17.8 two-year) and 3.7 percent, respectively. The 4.7 percent comp included a 3.4 percent increase in ticket (about 4 percent of price partly offset by negative mix). Systemwide average-unit volumes inched 2 percent to $2 million.
The brand in Q1 continued to accelerate paid advertising to spread awareness alongside openings. This as Dutch Rewards attributed about 72 percent of system transactions, a 5-point improvement versus the same period last year.
Dutch Rewards gives the chain a tool, like most loyalty directives, to communicate with guests through more personalized filters. It can introduce diners to new products and provide unique experiences, such as surprise sticker days and merch drops. “We strategically incentivize visits across various segments, geographies, and dayparts,” Barone said. “Dutch Rewards serves as a highly effective direct line of communication with our customers, allowing us to gather real-time feedback from our campaigns and continuously improve our customer experience.”
Again, the program is just four years old after launching in early 2021. And what’s begun to change is Dutch Bros’ ability to layer systems on top of prior pillars. In particular, Barone said the brand sees a clear path forward with “Order Ahead,” throughput, and the aforementioned food.
Focusing on Order Ahead to start, Dutch Bros didn’t begin testing mobile ordering until early 2024 in Arizona. By October, consumers placed 2.8 million mobile order transactions as the functionality spread to 90 percent of units and 96 percent of company-run stores. It hiked to 7 percent of sales.
Now, it’s up to 11 percent, Barone said, 3 points better than Q4. In many markets, as has been the case for a while, there are transaction penetration rates nearly 2X higher than the system average driven by “this easy way for new customers to discover our brand,” she said.
Barone added Order Ahead is playing out as Dutch Bros anticipated. Transactions have over-indexed to the morning—a daypart when many people are time sensitive and on their way versus taking a break. “This is encouraging as we recognize that at times we have long lines,” she said.
Order Ahead met Dutch Bros’ need to get faster. And it also opened up the company’s underutilized walkup window channel, Barone said.
From a more holistic sense, Order Ahead has enabled Dutch Bros to introduce a more modernized version of itself to customers who may not have tried it before. So when a guest sees a Dutch Bros open in their market, they’re now stepping into a digital flywheel with order-ahead, rewards, and the ability to tap the convenience tools they’ve come to expect from other coffee competitors. It solved a cost-to-entry point.
And then, when they do get there, they discover the differentiation—Dutch Bros traits like the walk-up window, customer service, and innovation. Barone said “Broistas” remain the separator. “This foundation is built with each Broista in our shop from coast to coast, from the very start of the onboarding process, our training and flow checks ensure every Broista is fully trained in our core anchor tenets of speed, quality, and service,” she said. “A continuous learning playbook allows us to enhance the customer experience. Our shop growth is predicated on the readiness and capabilities within our operations teams. Field leaders are deeply ingrained in the culture, allowing us to create compelling features for thousands of Broistas as they advance their careers with Dutch Bros.”
Dutch Bros is working off that hospitality strength and addressing targets in reverse. Throughput, for instance, is something Barone zeroed on in-store as well as with Order Ahead. Having the right people in the right place, doing the right things at the right time, while an elementary-sounding concept, is not as easy to execute at scale as it is in principle. At this stage, Barone said, Dutch Bros’ efforts concern driving incremental throughput during peak hours since it’s clear and measurable. The company is challenging shops to exceed base targets. Early results from a small pilot were promising, she said.
The unlock was visibility. Teams can now see, say, what their highest Friday hour was over the last couple of months, and then go try to beat it.
“So part of what we’re doing right now is really just bringing enhanced visibility through very easy-to-use kind of speed dashboards and things like that,” Barone said. “The other piece we’re doing is we’re working with our teams so they can identify where there might be bottlenecks in their shops. And so, as you think about kind of the cars coming through the drive-thru and really timing where beverages are going out the window with that.”
“Our teams are working through an exercise where they can look and understand kind of what part is actually causing a bottleneck,” she added. “And sometimes that’s unique depending on the shop itself or the makeup or the way the traffic might arrive with the red light, things like that.”
There’s also a series of tools operators can use to see if employees are staying in production, or if they might need to send a second runner out to start taking orders. Barone called it a “flexible system of deployment.”
Returning to the early innings point, and building on its Order Ahead success, Dutch Bros feels food can generate incrementality in the morning and push frequency. This is a multi-year growth chart given Dutch Bros’ current food mix is less than 2 percent of sales. The brand ran a pilot in eight locations that recently expanded to 32. Early learnings led Dutch Bros to keep the menu at eight SKUs, four of which are hot items.
Barone said internal goals are straightforward—maintain existing high levels of Broista job satisfaction (don’t muddy the role), continue to support throughput efficiency, minimize complexity, and offer a targeted assortment that allows Dutch Bros to satisfy guests’ cravings for food while capturing more beverage opportunities. Just like with Order Ahead and rewards, Dutch Bros doesn’t want to drop out of consideration because of what it doesn’t offer (food, ability to earn points).
Looking ahead, Barone said, expanding Dutch Bros’ food trial represents a crucial step toward a broader effort and rollout planned for 2026. “This expansion aims to reach a wider potential audience and positions Dutch Bros more competitively in high value routinized beverage occasions,” Barone said.
The brand has done extensive work on the distribution piece. It’s now nailing down the equipment and making sure it can execute without pulling labor from other areas.
The strategic intent, though, remains to capture additional beverage orders and do so with the least complexity possible. That’s why Dutch Bros is taking the limited SKU angle. Simplicity will help the brand manage throughput while still providing those hot options needed to meet routinized beverage occasions.
Barone said the incrementality of mobile ordering so far stems from a couple of things. Dutch Bros is measuring when a customer joins the rewards program or was a member. In each case, what happens? That pre and post behavior, she said, witnessed a lift in frequency.
The other thing Dutch Bros noticed was the number of rewards signups surged with the addition of mobile ordering. As the chain opens new markets, there’s quicker adoption. “So there’s both a rewards benefit to that and a mobile order benefit from that,” Barone said. “And I think that increased functionality, as a reminder, it was the No. 1 thing that our customers were asking for. So I do think we’re seeing that in those increased downloaded and that increased adoption of the app.”
And, as shared before, Dutch Bros wanted to see mobile order strength in the morning, which it has. Traditionally, the chain appreciated even traffic throughout the day (a third each in the morning, midday, and afternoon, respectively). Mobile bumped up guests early.
Barone added this lift didn’t lead to more promotions or margin-hitting deals. The brand’s contribution from discounts was even, year-over-year. What changed was the sophistication of how Dutch Bros delivered offers. If anything, there’s runway to become more efficient.
Part of the thought behind mobile order and showing the full menu online as well was a marketing hook. Customers check out what they might order and see the path to becoming a rewards member. Barone said the interplay resulted in accelerated adoption.
More digital leading to walk-up window usage opened possibilities, too. Dutch Bros looks at this from a production perspective, Barone said. It has two main areas—the walk-up window and the drive-thru. Balancing out production and demand proved “quite helpful,” she explains.
Overall, Barone feels Dutch Bros continues to insulate from a difficult macro environment by combing core equities with whitespace yet to tap.
“I think that we are just rooted in an excellent value proposition right now,” she said. “So we continue to look at that and see how the brand is resonating with customers. And all of those things really give us confidence in what we’re seeing right now despite what we’re hearing in the broader macro environment.”
“I do think, too, we are in this unique position in that even with things like innovation and Dutch Rewards and the paid advertising,” Barone continued, “we still are kind of peeling the layers back on that and driving the efficacy across those programs.”
