The drive-thru coffee chain remains committed to its longer-term goal of reaching 1,000 US stores in the first half of 2025, despite rapid outlet growth hindering profitability
Dutch Bros now operates 800 outlets across 14 US states | Photo credit: Dutch Bros
Oregon-based Dutch Bros has reached 800 outlets across the US with a new store in Surprise, Arizona.
The drive-thru chain set a goal in 2018, when it had approximately 300 stores across seven states, to reach 800 outlets by the end of 2023. It now has sites across 14 US states.
Dutch Bros has longer-term ambitions to operate 4,000 stores, with plans to reach 1,000 stores by the first half of 2025.
While it continues to post strong revenues, with sales rising 34% year-on-year in the second quarter of 2023 to reach $250m, the coffee chain’s rapid expansion has inhibited profitability.
In September 2023, Dutch Bros announced a public offering of its stock to raise $300m, more than $200m of which it will use to repay outstanding debt. The remainder will go towards ‘working capital and general corporate purposes’, according to an SEC filing.
Dutch Bros forecasts full-year revenues reaching between $950m-$1bn — which, if achieved, would represent a 28%-35% increase on its full-year 2022 sales.
The drive-thru coffee chain’s outlet and sales growth will soon be overseen by President Christine Barone, who will assume the role of CEO from Joth Ricci from 1 January 2024.
Dutch Bros is the fourth largest branded coffee chain in the US, behind Starbucks, Dunkin’ and Panera Bread, which have 16,144, 9,434 and 2,151 stores respectively.
World Coffee Portal research shows the total branded US coffee shop market grew by 1,552 outlets in the last 12 months to reach more than 40,000 outlets.
Further outlet growth is forecast, with the market expected to surpass 41,300 outlets next year and exceed 45,200 outlets in 2028.