Dutch Bros CEO Christine Barone believes the brand is on trend with its emphasis on iced beverages. It’s gaining relevance with customized energy drinks, which have been a core menu platform for over a decade.
Food, however, is an afterthought—at least for the time being.
In 2024, the brand announced a limited food test in eight shops. The initial pilot is focused on understanding the best assortment, how an expanded food program would impact existing operations, what the process looks like from a supply chain perspective, and determining necessary refinements to operational protocols. Barone said that although the test is small, early feedback is favorable and points toward the viability of a bigger platform.
Food mixes less than 2 percent. The chain offers a Chocolate Chip Muffin Top, Lemon Poppyseed Muffin Top, Orange Cranberry Muffin Top, and a granola bar. Dutch Bros has eight items in its food test, doubling its current offerings. Testing will continue throughout 2025, with a systemwide rollout likely to happen in 2026.
Dutch Bros believes better food choices would encourage more customers to visit in the morning, which represents just one-third of sales. For perspective, at Starbucks, food mixes 23 percent and the morning daypart mixes 50 percent.
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The beverage chain hopes to achieve three main goals with its food program. First is employee satisfaction. As the chain expands roles, it will consider how to do so in ways that “foster our fun and energetic work experience” so the company can continue to retain and attract workers, Barone said. Second, Dutch Bros eyes a targeted assortment focused on sufficiently capturing the food attachment and incremental beverage opportunity while minimizing complexity.
The third and final objective is to have no impact on throughput.
“We believe we have an opportunity to expand market share in the morning daypart,” Barone said. “We understand that many people seek the added convenience of a food pairing with their morning beverage choice. Food makes up less than 2 percent of our total sales, and we are likely missing morning beverage transactions from would-be customers who are not satisfied with our current food offerings. With the expansion of our food program, we are targeting these incremental beverage occasions and aim to compete more aggressively for these high-value routinized occasions with a limited food offering that fulfills our customers’ needs.”
Dutch Bros is also looking to draw morning visitors with its new mobile ordering platform powered by Olo. Q4 marked the brand’s first full quarter with mobile ordering, and “customers are enthusiastically embracing” the innovation, Barone said. As of December 31, rewards customers have placed 5.4 million mobile transactions. The channel already mixes 8 percent and continues to see sequential increases each quarter.
The chain has found that guests who use mobile ordering increase their frequency, that customers use it at a higher rate in new markets, and that orders over-index in the morning, especially with coffee-based beverages.
Dutch Bros implemented mobile ordering and started the food test based on feedback from its customers.
“We’re listening all the time to our customers and what they’re asking for,” Barone said. “Mobile order was the number one thing our customers wanted on our app. We get frequent requests for hot food in particular, something that has a little bit more protein in it. So those are things we listen to. The other piece is when we look broadly at the market, historically our business has been about one-third in the morning, one-third in the midday, and then one-third in the afternoon and late evening. And as we look at that, the market actually has a lot of transactions in the morning time. And so when we were looking at where we have some low growth potential in that morning daypart, mobile order is a little more important, and breakfast food is quite important in that morning daypart as well. And so as we look at that, we think, gosh, we could possibly be missing a beverage occasion in that morning daypart. And what we are seeing with mobile order is it is skewing toward the morning just as we as we thought it might.”
Dutch Bros’ comps lifted 6.9 percent in Q4. That was fueled by a 2.3 percent rise in transactions—the chain’s largest quarterly transaction growth since 2022. AUV was $2 million. For the full year, comps grew 5.3 percent and transactions dropped 0.1 percent.
The brand’s other transaction drivers are innovation and paid media. In Q4, Dutch Bros brought back its Hazelnut Truffle Mocha and Candy Cane Mocha; the chain sold almost 40 percent more Candy Cane Mocha drinks compared to Q4 2023. The company is also using targeted digital advertising to bring guests into the rewards program as quickly as possible so it can speak to them directly. This strategy has mostly been used in newer markets to boost awareness, but Dutch Bros recently tested increases in paid advertising in mature markets.
Dutch Bros opened 151 shops in 2024 and finished with 982 across the U.S. The chain’s 1,000th location opened in February in Orlando. The chain grows primarily through corporate units, backed by an internal pipeline of more than 450 regional operator candidates with an average tenure of more than seven years. That same pipeline was approximately 200 at the end of 2021.
Total revenues grew 32.6 percent to $1.28 billion in 2024, compared to $965.8 million in 2023.
In 2025, Dutch Bros expects to open at least 150 shops, for same-store sales to grow between 2 percent and 4 percent, and for revenue to be between $1.555 billion and $1.575 billion.
