With Dutch Bros set to launch mobile ordering nationwide for the first time, the brand fully expects an improvement in speed and convenience for drive-thru customers. Despite likely saving a significant amount of time with an order-ahead feature, the brand doesn’t plan on taking labor out of shops.

Instead, CEO Christine Barone said, Dutch Bros will reinvest this newfound time into production and hospitality. Similar to Chick-fil-A, Portillo’s, Raising Cane’s, and others, the beverage chain takes orders outside as cars approach the drive-thru lane. That one-on-one interaction isn’t something Dutch Bros takes lightly.

“As we look at mobile order and pay, we think it’s incredibly important that we really keep our brand differentiator, and that brand differentiator is our service,” Barone said during the company’s Q1 earnings call. “And so we will deploy more folks to making sure that we have great conversations with our customers, including both at the window and in line. So, if you drive through the line, you’re going to have an awesome conversation as you come through. Have someone reach you, and say you got a mobile order. ‘Let me help you with that.’ If you come up to the window, you’re going to come and have that same conversation. And so, it’s very intentional that we want to reinvest this labor back into both production and into ensuring that we can have great conversations with our customers.”


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Dutch Bros is launching mobile order and pay using solutions from Olo. Noah Glass, founder and CEO of the digital-forward tech company, notes that 37 percent of transactions come via drive-thru, a channel that’s spiked in popularity since 2020. A vast majority of those are nondigital, which is why it doesn’t surprise him that a drive-thru-only operation like Dutch Bros has been able to go this long without digital ordering capabilities, even through the COVID pandemic.

He applauds the company’s desire to create a more digitally personalized experience for customers and also its emphasis on the team member experience.

“How do you make the barista’s job better and easier and more rewarding through digital and not overload them or complicate their lives?” Glass says. “I respect that tremendously. As I speak to Christine, their CEO, or Leigh [Gower], the chief technology officer, or Tana [Davila], who runs marketing, they are very focused—in a true enlightened hospitality way—on the team experience and the guest experience and those things having an equal role in their mind of how to do digital. And that’s key. You can’t have something that guests love it but it runs over the operators or the staff inside the restaurant. It has to be a balanced approach. That is a win-win on both sides.”

He hopes a leading brand like Dutch Bros—the third-largest beverage chain in America with 876 locations—sets the agenda for other drive-thru operators and customers on what’s possible in terms of speed and personalization.

Glass views the move as a “huge growth opportunity” for the broader digital transformation of the industry. And that’s because Dutch Bros is adding this technology amid massive store expansion. The chain’s long-term goal is to reach 4,000 shops in the next 10 to 15 years, and while it’s a lofty goal, the beverage brand has a history of fulfilling publicly stated unit growth objectives. For instance, in 2018, Dutch Bros unveiled a plan to reach 800 stores by the end of 2023—consider that box checked. It also predicted 1,000 locations by 2025, and at the current pace, the brand should achieve that mark as well.

“They have articulated their plan to scale to 4,000-plus locations in the years to come and it’s credible,” Glass says. “I mean, you hear some brands— that have like one location—say, ‘We’re going to be 100 in three years time.’ You’re like, ‘OK, well, whatever. You’re going to run into the laws of gravity that apply to this industry.’ But Dutch Bros, that passionate fan base, the cash-on-cash returns, they’re going to grow and become a giant in this industry. And I think they have the ‘wind at their back’ of the market understanding just how special they are.”

Barone told investors Wednesday that the initial phase of the mobile ordering test is going well and that it’s expanded to include several restaurants in Arizona. The technology should be in a majority of shops by the end of 2024. The innovation is likely to have strong adoption as 66 percent of transactions in Q1 were from Dutch Rewards members. The expectation is that the digital option will unlock a new occasion from customers who may have previously decided against traveling to Dutch Bros because of a time crunch and long lines, particularly in the morning.

The CEO believes Dutch Bros’ store layouts—with drive-thru lanes and a walk-up window—are set up well to implement mobile ordering. For the past several years the chain has opened shops with escape lanes, which allow employees to run drinks to customers and have those cars leave before they reach the window. A feature that fits well with digital order-ahead.

“As we’re drawing shops today, we’re certainly highly cognizant that we will have mobile order capabilities in those shops in the future,” Barone said. “And so, as we think about that we’re thinking about all different types of things like parking, we’re thinking about the lines, we’re thinking about the escape lanes. But as you know, it does take a while for drawings to work their way through the pipeline and system.”

Dutch Bros same-store sales increased 10 percent in Q1 year-over-year, and that accounts for sales transfers between existing and new shops—a common occurrence due to the brand’s fortressing strategy. Company-operated shop gross profit was $54.3 million as compared to $28.9 million in the same period in 2023. Corporate shop gross margin was 21.9 percent, a year-over-year increase of 520 basis points. Adjusted EBITDA grew 120 percent to $52.5 million versus $23.9 million last year. AUV reached $2 million, the highest on record.

In Q1, the brand opened a record-tying 45 new shops, marking the 11th consecutive quarter of 30 or more new shop openings. Two openings came in Florida, the company’s 17th state overall. With a footprint in the Sunshine State, Dutch Bros is now truly a coast-to-coast operation.

Fast Casual, Marketing & Promotions, Story, Technology, Dutch Bros