OVERVIEW
While we are still digging in on the financials and valuation; Dutch Bros looks strong and is an interesting competitor to SBUX. BROS is an owner-operator and franchisor of drive-thru shops that focus on serving quality, hand-crafted beverages with substantial average unit volumes. Founded in 1992 by Dane and Travis Boersma, Dutch Bros began with an espresso machine and a pushcart in Grants Pass, Oregon. Like other publicly traded coffee stocks, espresso-based beverages are at the core of the business. Still, they have expanded the menu to include a wide variety of unique, customizable cold and hot beverages. As the S1 says, “We believe Dutch Bros is more than just the products we serve—we are dedicated to making a massive difference in the lives of our employees, customers, and communities.” Like SBUX, BROS offers a combination of hand-crafted and high-quality beverages, a unique drive-thru experience (unlike SBUX), and a “community-driven, people-first culture” that has allowed the company to open new shops aggressively. Once public, BROS will be one of the fastest-growing restaurant companies by new store growth at 20% annually. In the past six years, the company has increased its store base from 254 shops in seven states at the end of 2015 to 471 shops in 11 states as of June 30, 2021. As of June 30, 2021, 264 stores were franchised, and 207 were company-operated.
On the call, we will cover:
- Competitive moat
- The current operating model
- Unit economics
- Growth drivers
- Margin leverage
- Income statement/Balance Sheet/Cashflow
- Valuation
More to come!
