Customers are taking to Dutch Bros’ new mobile ordering option.
After fully launching systemwide in Q4, the platform accounted for 8 percent of transactions. That rose to 11 percent in Q1. CEO Christine Barone and the leadership team knew this upward trajectory would happen.
Why?
“We knew what our customers wanted,” Barone says. “They were asking for mobile orders. I think all great ideas do start with your customers and your broistas.”
Before implementing mobile ordering, the typical 900- to 1,000-square-foot stores were already set up with multiple make lines, with one production zone next to the drive-thru window and another one next to the walk-up window. In some high-volume shops, there are as many as five production zones. Shops use kitchen display systems, so a mobile order pops up on the screen just as it does when an employee takes an order outside using a tablet.
READ MORE:
1,000 Locations is Just the Start for Dutch Bros’ Growth
Dutch Bros to Lean on Culture and Data to Hit 2,000 Locations by 2029
Dutch Bros Wants Morning Market Share with Food Test and Mobile Expansion
The brand also ensures workers are still handing off drinks to digital guests and conversing with them, “creating that awesome moment when you come through our drive-thru and leave with a little bit of a smile on your face and a little happier than when you came in,” Barone says.
“We can tell if you’re in a rush or not in a rush, and we can tell if you want to have a conversation,” the CEO adds. “We can read those cues pretty well. Our teams do just an amazing job with that. … And then I think we also continue to learn. So we’re watching, we’re doing surveys with our Dutch Rewards customers to understand, is their drink ready on time, what are the things we can do to improve. So I think the other thing about our culture is no matter how well we’re doing, we always look to get better.”
Historically, drive-thru has mixed 90 percent, but more than half of mobile customers are choosing the walk-up window. This helps relieve drive-thru wait times and encourages passing cars to stop by whereas they wouldn’t have if the line appeared too long.
In some newer markets, mobile ordering has reached about 20 percent.
“I think what’s going on there is mobile order has been in the beverage market for a long time. And so as we’re introducing ourselves to new customers who just assume that we have it, they’re coming to us, they’re using it, whereas in some of our more mature markets or stores that have been around for a little bit longer, we might have had folks who really love Dutch Bros but have decided to go elsewhere because we didn’t have that functionality,” Barone says. “So we’re looking forward to reintroducing them to Dutch.”
Meanwhile, Dutch Rewards—debuting in 2021—accounted for 72 percent of transactions in Q1. The program has proven to be a “great way for us to talk to customers,” Barone says, including the introduction of new beverages, or news about a sticker or special merchandise drop. With mobile ordering, especially in new markets, the chain has seen a surge in Dutch Rewards sign-ups.
The growth of the loyalty program has become a serious value proposition.
“All of our customers out there are just thinking about how they spend their money. Having those free drinks that come through Dutch Rewards, having those opportunities to get extra points on certain days, all of those are really important, I think, in helping to drive that overall value proposition where we’re in a really strong place right now,” Barone says.
Expect mobile ordering and the Dutch Rewards program to have an even bigger impact once Dutch Bros launches its food menu nationwide in early 2026. The brand is testing eight food items (a wrap, two breakfast sandwiches, a waffle, and assorted bakery items) at 32 shops, with the hopes of boosting its morning daypart mix from 33 percent. For perspective, the first part of the day mixes nearly 50 percent at Starbucks.
Dutch Bros also happens to be one of the fastest-growing beverage concepts in the country. The chain ended Q1 with 1,012 shops after opening 30 or more restaurants for 15 straight quarters. The plan is to open at least 160 shops this year after debuting 151 locations in 2024. Short term, the brand believes it’s capable of reaching 2,029 units in 2029, meaning it hopes to open more than 1,000 outlets in four years.
Long term, the brand said its total addressable market is 7,000 locations, up from the 4,000-unit figure it noted during its IPO in 2021. Financial services firm William Blair said this target could be conservative since it doesn’t fully count for opportunities from mobile ordering, an expanded food offering and the awareness gap in many markets that should tighten as more units come online.
New markets this year include Indiana, Ohio, Louisiana, Georgia, and South Carolina.
The company is already the third-largest coffee chain in the U.S., behind Starbucks and Dunkin’. It primarily expands through corporate units, backed by a pipeline of 450 operator candidates that have an average tenure of more than seven years.
“You’ve always got to do a lot of planning to open the number of shops that we’re doing, but we shared on our Q1 earnings call that we felt good about where we were,” Barone says. “A lot of the construction on the sites in ’25 has already started or is underway. So just being thoughtful about that, I think we feel like we’re in great shape to open at least 160 shops this year.”
Dutch Bros’ same-store sales grew 4.7 percent in Q1, fueled by a 1.3 percent rise in traffic and a 3.4 percent bump in average check. AUV was $2 million.
“I think we always have a lot going on. When folks ask me what don’t people know enough about Dutch Bros, I think come to Dutch Bros, try it out. It really is an awesome experience, and I think it’s something where it’s when you get it’s because you’ve come and you’ve met our team and you’ve experienced a great drink.”
