OVERVIEW
The Dutch Bros concept 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. 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. The specialty beverage restaurant category is competitive, but Dutch Bros. has a differentiated concept and unique company culture that has been popular wherever it has opened despite modest marketing. We'll also dig into coffee consumption trends during the pandemic and whether Starbucks should be concerned by the new competitor.
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On the call, we covered:
- Competitive moat
- The current operating model
- Unit economics
- Growth drivers
- Margin leverage
- Income statement/Balance Sheet/Cashflow
- Valuation
