After a year of serving as Dutch Bros president, Christine Barone brought in the new year by adding CEO to her title. It’s the first of many changes heading the brand’s way in 2024 and beyond.
The chain opened 159 stores last year and finished with 831 systemwide. This year, Dutch Bros may re-break its development record if it ends on the upper side of its 150-165 restaurant opening projection. This means the brand is on pace to surpass 1,000 locations in 2025 (a benchmark it forecasted in early 2023). It would be the third U.S.-based chain to do so, following Starbucks and Dunkin’.
The massive growth curve will be supported by a new leadership team. Retiring CFO Charles Jemley will be succeeded by current MOD Pizza CFO Josh Guenser. He will begin as “incoming CFO” on or around February 19 and fully take over the role once Dutch Bros releases its Q1 results in the spring. Jemley will stay on as an advisor to ensure a smooth transition. Guenser has worked as the pizza fast casual’s CFO since March 2020 and served 10.5 years in several financial roles at Starbucks.
Sumi Ghosh will soon be named “incoming president of operations,” and will spend his first few months engaging with shop and field leaders across the country. Once Ghosh completes this training, he will transition into the full role, where he will be responsible for shop operations, real estate strategy, and supply chain management. Prior to Dutch Bros, Ghosh worked as global VP of Nike stores for more than two years and spent about 12.5 years at Starbucks. Similar to the CFO switch, current COO Brian Maxwell—who’s been with the brand for 25 years—will temporarily stay on to serve as a mentor. Then he will move into a vice chair role where he’ll help Barone build strategy and long-term planning.
Jess Elmquist came on as chief people officer in January. He previously worked at Phenom People as chief human resources officer and chief evangelist and spent 20 years at Life Time Fitness. CMO Tana Davila, who joined in June, has experience at CKE Restaurants and P.F. Chang’s.
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Changes are also coming to the brand’s growth structure. For years, Dutch Bros has implemented a fortressing strategy when it enters a new market, which has led to sales transfers between units and lower AUVs. The chain now plans to go wider in trade areas instead of deeper. Whereas Dutch Bros may have entered a city and planted shops one, two, and three close together, it might “do one, pop over to three, and then as those customer bases grow, put that two in the middle,” explains Barone. She emphasizes that it’s a “tweaking” of the growth strategy and not a switch. There will still be fortressing of multiple units to prevent long drive-thru lines.
“It’s just a thought of what we’ve learned from our openings and our new markets and how we might pace that growth a little bit differently,” Barone says. “So that’s what [we] mean by going a little wider. It also might mean that we might open some new markets a little quicker. A lot of these changes you’ll really see in 2025, as we have a really robust pipeline already built for the next year.”
Dutch Bros wants to diversify its lease types too. In recent years, the brand sought ground leases to have better control of the development process in light of supply chain and construction pressures. But these leases also come with a higher upfront investment. So the brand will look to do more build-to-suits; these cost less at the beginning but have higher rent than a ground lease. It’s a trade-off the chain is willing to make.
In terms of box types, the company is moving away from its legacy 500-square-foot double drive-thru design on the West Coast. Dutch Bros will primarily expand with its single drive-thru prototype featuring 8,000 to 1,000 square feet of space. In certain locations, where the brand thinks it can infill a market, it will open 1,200-square-foot endcap drive-thrus that are cheaper since they share development costs with other co-tenants. These locations may have a lobby with a walk-up window but no seating.
A majority of future locations will be supported by a pipeline of 350-plus operator candidates who have been internally promoted.
“They’ve stayed with us for a long time,” Barone says. “And so they really love the brand. And then we have a whole series of training from the broista level up through the operator level. And so they’re learning new things in each new position and each new role that they take on, and we’re always continuing to look for ways to continue to better prepare them as they take over their next area and region for Dutch Bros.”
Going forward, Dutch Bros will pair new store development with more intentional marketing strategies to build brand awareness. This could be involvement in local high schools and communities. In some cases, it will be bigger, like when the company sponsored college football’s Big 12 Championship in December. That game took place in Texas—one of Dutch Bros’ most important growth markets. Marketing will involve product innovation as well. The company recently introduced a protein milk coffee systemwide, becoming the first shop at scale to focus on protein.
The chain will also consider how to convert more guests into the rewards program. With that said, the beverage chain already does well with this; almost 65 percent of transactions come from loyalty members.
“When you sign up for a loyalty program, you typically really love the brand,” Barone says. “And so I think it just reinforces what we know about the strength of this brand. The fact that almost 65 percent of the transactions are going through that rewards program is something really, really unique for us. And then what it allows us to do is to have a channel to connect with those customers that have said, ‘Hey, I want to connect with you.’ And so we can send them news about new drinks that we’re doing or something that might apply to them. It’s a great platform for us to communicate with those most loyal customers.”