Dutch Bros is on a digital journey, and customers couldn’t be more happy.
The chain has spent the year introducing mobile ordering for the first time in company history. The functionality is available in 90 percent of the system and 96 percent of company-operated shops. As of October 31, guests have placed approximately 2.8 million mobile order transactions. The channel mixes 7 percent, and the brand sees runway to grow that even further. In fact, some shops are seeing mobile orders mix twice as high as the system average.
It helps that the ordering process reduces friction; more than nine out of 10 customers said they were likely to use the channel again and recommend it to a friend. These same consumers are visiting 5 percent more often as well. From a Dutch Rewards perspective, the brand saw more than 1 million registrations in Q3, the highest number of registrations in a quarter since the program launched. During the third quarter, 67 percent of transactions were from loyalty members. Amid this growth, Dutch Bros is continuing to segment guests and provide personalized and relevant offers.
CEO Christine Barone said mobile ordering’s growth is coming through word of mouth and guests seeing signage as they move in the drive-thru at the point of purchase. The brand implemented some digital marketing pushes later in Q3, but it wasn’t a significant amount. The other tool is using the app itself where Dutch Bros makes the mobile ordering option obvious.
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Employees love it too. Dutch Bros is receiving positive feedback from workers, who are fulfilling mobile orders with 95 percent accuracy. Also, tip rates are higher in this digital channel compared to others. Barone said the introduction of mobile ordering has been seamless, with the help of kitchen display units and separate production bars at the drive-thru and walk-up window. The pace of rollout has been dependent on receiving feedback from stores and making adjustments in response.
Barone emphasized the chain isn’t sacrificing its core value of human-to-human interaction to boost digital growth. Workers are handing the drink to the customer every time to maintain that service interaction. Additionally, even though this technology could help remove labor from shops, Dutch Bros has been intentional about reinvesting saved dollars into hospitality.
In terms of operations, mobile ordering over-indexes in the morning with coffee-based beverages, which supports Dutch Bros’ plan to boost its early daypart. Over time, the brand expects most transactions will involve a single drink, given the channel is often used on a commute or when a customer is in a hurry.
There isn’t much food attachment, but Dutch Bros is hoping to change that. In Q3, the company began a limited food test in six shops. During this pilot, it explored an expanded bakery offering and sweet and savory hot food options. Barone deemed the test successful and said a bigger food menu will likely be part of Dutch Bros in the future. Currently, food mixes less than 2 percent. But it’s still early days; she believes the expanded food menu is an opportunity for 2026 and beyond.
“I think how we think about this strategically, as we look across our business, we have an opportunity to lift the entire business,” Barone said. “And then we also have a very specific opportunity to build morning routines. One thing that’s important for building morning routine is mobile order, which we have rolled out this year and believe that we have a long runway. But the second big thing there is food. And so as we look at the importance of food in that morning routine, we believe we could be missing a beverage occasion. And so as we say strategically about food, we believe it’s not only an opportunity to drive attach but the more important opportunity might actually be for that beverage occasion.”
Mobile ordering helped Dutch Bros achieve its highest same-store transaction growth quarter in two years. Systemwide comps increased 2.7 percent and revenue lifted 28 percent, exceeding expectations.
Menu innovation also played a role. The chain introduced a new Cookie Butter Latte and Caramel Apple Rebel energy beverage and brought back its Caramel Pumpkin Brûlée. Dutch Bros combined that with surprise-and-delight sticker drops and special merchandise giveaways that created excitement and strengthened brand loyalty, according to Barone.
The other major factor is paid advertising. In late 2023, Dutch Bros began accelerating digital spend in new markets to drive awareness, which has resulted in increased productivity in new shops. Barone said the marketing push is driving a material change in sales trajectory in these new trade areas. In Q3, the company started expanding paid advertising to more areas, including existing markets.
Dutch Bros, which primarily grows via company-operated locations, opened 38 new shops in Q3, putting it at 950 stores nationwide. The company hopes to open at least 160 more units in 2025. The brand’s people pipeline includes more than 400 operator candidates with an average tenure of more than seven years.
Andrew Charles, a senior research analyst with TD Cowen, said there have been questions from investors concerned that Dutch Bros’ positive traffic is benefiting only in the near team because of Starbucks’ headwinds and that a turnaround from the coffee giant may bring a shift.
Barone ensured the brand is resonating with guests and that Dutch Bros is “super focused” on its own identity.
“When I look at what’s happening in the industry right now, it is increasingly going to iced, the importance of customization and personalization and being able to do that very quickly is something that’s also increasing,” Barone said. “I think customers also want great authentic service, and we’re seeing continued growth in our customized energy business. And so when you look at all of those things, we really believe what’s working for us is being Dutch Bros. We created kind of the drive-thru in this category where we’re delivering service with convenience. And I think what we’ve been doing all year is executing on our playbook, and it’s working really well for us.”
