Dutch Bros. Coffee

Last updated
Dutch Bros Inc.
Company type Public
NYSE:  BROS (Class A)
Industry
FoundedFebruary 12, 1992;32 years ago (1992-02-12) in Grants Pass, Oregon [1]
Founders
  • Dane Boersma
  • Travis Boersma
Headquarters
Grants Pass, Oregon
,
U.S.
Number of locations
912 in 17 states (Jan. 2024)
Area served
 Western United States
Key people
  • Travis Boersma (chairman)
  • Joth Ricci (CEO)
Products
  • Whole bean coffee beverages
  • Made-to-order beverages
  • Bottled beverages
  • Merchandise
  • Smoothies
  • Energy drinks
RevenueIncrease2.svg US$966 million (2023)
Increase2.svg US$46.2 million (2023)
Increase2.svg US$9.95 million (2023)
Total assets Increase2.svg US$1.76 billion (2023)
Total equity Increase2.svg US$676 million (2023)
Number of employees
c. 24,000 (Dec. 2023)
Subsidiaries Dutch Bros Foundation
Website dutchbros.com
Footnotes /references
[2]
The chain's name originally included a period in the abbreviation, as seen in the neon signage of a 2014-opened store. Dutch Bros. Coffee neon sign.jpg
The chain's name originally included a period in the abbreviation, as seen in the neon signage of a 2014-opened store.

Dutch Bros Inc., originally written Dutch Bros. (with a period at the end), is a publicly held drive-through coffee chain in the United States. [3] Founded in 1992 by Dane and Travis Boersma, it is headquartered in Grants Pass, Oregon, with company-owned and franchise locations primarily located in the western United States although the company has expanded as far east as Davenport, Florida. [4] [5] [6]

Contents

History

Early history

Dutch Bros was founded on February 12, 1992, by Dane and Travis Boersma, brothers of Dutch descent, in Grants Pass, Oregon. [1] [7] [8] Their family's third-generation dairy farm had been struggling due to changes in environmental regulations, and the brothers were looking to start a new business. [9] [10] Travis Boersma suggested a coffee cart where they could sell espresso. [10] [8] Dane Boersma was able to help finance the idea with money he had set aside while running a Dairy Queen franchise. [10] They spent an initial $12,000 on an espresso machine and a single pushcart, which they set up in downtown Grants Pass. [8] [11] The name Dutch Bros was chosen in honor of their immigrant grandparents. [8]

They soon added four more carts and, by 1994, had established their first drive-through location. [12] [13] In 1996, the company began roasting its own coffee, sourcing beans from El Salvador, Colombia, and Brazil. [14] [8]

Dutch Bros Coffee in Bakersfield, California Dutch Bros. Coffee Bakersfield - March 2022 - Sarah Stierch.jpg
Dutch Bros Coffee in Bakersfield, California

Expansion

In 1994, Dane and Travis Boersma struck a deal with a customer, Marty McKenna, which allowed him to open his own Dutch Bros in Medford, about 30 miles away from Grants Pass. [8] [15] McKenna's first stand performed so well that he soon opened up a second one across town. [15] In 1997, the Boersmas brought McKenna on as a partner, hoping he would continue to expand the Medford operations. [8] [15] Two years later, they bought out McKenna's stake in the company. [8]

In 1999, Dutch Bros started formally franchising. [16] The company opened its 50th franchised drive-thru location in 2004. [8] That same year, shortly after moving into a new headquarters in Grants Pass, a nearby dumpster fire spread to the building, destroying Dutch Bros roasting equipment, five vehicles, and thousands of pounds of coffee beans. [17] [8] Following this incident, the company continued to expand, and by the end of 2004, operated 61 coffee shops spanning from Northern California to Oregon's Willamette Valley. [18]

By 2009, Dutch Bros was running approximately 135 coffee stands in seven states and generating $50 million in gross annual revenue. [16] Dane Boersma died in 2009 from Amyotrophic Lateral Sclerosis. [19] In 2013, Travis Boersma was featured on the American version of the television show Undercover Boss. [20] [21] Revenues continued to grow into the mid-2010s. The company earned $238 million in systemwide sales in 2015, $350 million in 2016, and $415.3 million in 2017, by which point there were over 283 Dutch Bros locations. [8] [22] [23]

In January 2017, Dutch Bros purchased a vacant shopping center in downtown Grants Pass, where their original push cart was located. [11] [22] The company converted 20,000 square feet of the shopping center's interior into futsal courts for local youth soccer teams and workout space for its employees. [24] [22] In March of that same year, the company bought the Washington Federal bank building across the street from the shopping center, to move its headquarters and 150 employees into the bank building the following fall. [25] [22]

Capital increase and IPO

In October 2018, Dutch Bros received an undisclosed amount from private equity firm TSG Consumer Partners for a minority stake in the company and announced plans to expand to 800 stores over the next five years. [23] [7]

Dutch Bros reported revenues of $238 million in 2019, $327.4 million in 2020, and $228 million over the first six months of 2021, heading into the company formally filing for its IPO in August 2021. [26] [7] The company stated in its filing that it hoped to raise $100 million, which it would use toward paying down $192 million in long-term debt. [7] Dutch Bros held its IPO and began trading on the New York Stock Exchange with the ticker symbol "BROS" on September 15, 2021. [27] The IPO raised $484 million, selling about 21 million shares for $23 each. [27] [13] Travis Boersma retained about 74 percent of shareholder voting power after the listing, due to his ownership of Class B stock. [27]

Business model

Dutch Bros operates as a chain. [8] The vast majority of its stores are drive-thru stands. [28] [29] Each store sells hot and cold drinks, including non-coffee options, and a selection of baked goods. [30] [31]

The company started franchising in 1999. [16] In 2008, Dutch Bros transitioned to an internal franchising model that required potential franchisees to have worked for the company for a minimum of three years. [8] This resulted in a 97 percent continuity rate among franchises; between 2010 and 2015, only three percent of all Dutch Bros franchise locations closed. [8] In 2017, Dutch Bros stopped franchising and started opening only company-owned stores. [12] [32] As of June 2021, franchisees were running 264 Dutch Bros stores and another 207 were fully company-owned. [30] The company has a history of buying out franchisees who need to meet the company's customer service standards. [8]

Operations

Dutch Bros is headquartered in Grants Pass, Oregon. [33] It is majority-owned by Travis Boersma, who holds the title of executive chairman, and Christine Barone is its president and CEO. [27] [26] The company operates approximately 800 stores across 16 states and employs about 23,000 people. [33] [34] [35] In September 2021, Dutch Bros became a publicly traded company, selling 21 million shares for a total of $484 million. [27]

Charity

Through "Drink One for Dane", Dutch Bros. Coffee donates to the Muscular Dystrophy Association. [36]

See also

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References

  1. 1 2 "Dutch Bros Coffee to open its first cafe in Tacoma". Washington Newz. 22 January 2019. Retrieved 1 May 2022.
  2. ↑ "Dutch Bros Inc. 2023 Annual Report (Form 10-K)". U.S. Securities and Exchange Commission. February 23, 2024.
  3. ↑ Maynard, Micheline. "Coffee Lovers, Keep An Eye on Dutch Bros. They Just Got a Big Investor", Forbes , October 2, 2018
  4. ↑ "What is Dutch Bros? 8 things to know about the popular coffee chain coming to Florida". Sarasota Herald-Tribune. 21 February 2024. Retrieved 28 February 2024.
  5. ↑ "Dutch Bros. moving headquarters to downtown Grants Pass". KGW. 28 March 2017. Retrieved 21 December 2018.
  6. ↑ Margolis, Joshua, and Christine Snively. "Dutch Bros. Coffee: A Compelling Future." Harvard Business School Case 415-010, April 2015.
  7. 1 2 3 4 Rogoway, Mike (August 21, 2021). "Dutch Bros seeks to raise $100 million in IPO, hopes to have 4,000 coffee stands someday". The Oregonian. Retrieved October 4, 2021.
  8. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Adams, Susan (June 15, 2016). "The Coffee Cult: How Dutch Bros. Is Turning Its 'Bro-istas' Into Wealthy Franchisees". Forbes. Retrieved October 4, 2021.
  9. ↑ Tims, Dana (September 28, 2017). "Top Workplaces 2017: Dutch Bros. Coffee finds strength in its relationships". The Oregonian. Retrieved October 5, 2021.
  10. 1 2 3 Culverwell, Wendy (August 15, 2014). "How Dutch Bros. grew from a pushcart in Grants Pass to a $150M coffee mainstay". Portland Business Journal. American City Business Journals. Retrieved October 5, 2021.
  11. 1 2 "Dutch Bros. purchases original location". KOBI (TV) . California Oregon Broadcasting, Inc. January 19, 2017. Retrieved October 5, 2021.
  12. 1 2 Tognini, Giacomo (September 15, 2021). "Dutch Bros Coffee IPO Brews Oregon's Newest Billionaire". Forbes. Retrieved October 5, 2021.
  13. 1 2 "TSG-backed Dutch Bros valued at over $5 billion in NYSE debut". Reuters. September 15, 2021. Retrieved October 5, 2021.
  14. ↑ Angel, Devanie (February 16, 2006). "Dutch treat". Chico News & Review. Retrieved October 5, 2021.
  15. 1 2 3 Preszler, David (May 17, 1999). "Dutch Bros. opens 10th". Mail Tribune. Retrieved October 5, 2021.
  16. 1 2 3 Furniss, Jennifer (February 28, 2009). "Tactics: Dutch Bros. rejects the corporate grind". Oregon Business. Retrieved October 5, 2021.
  17. ↑ "Still No Cause For Oregon Coffee Warehouse Fire". Firehouse. August 13, 2004. Retrieved October 5, 2021.
  18. ↑ "Coffee shops perking up Oregon town". Seattle Times. December 24, 2004. Retrieved October 5, 2021.
  19. ↑ "Dutch Bros. Coffee co-founder dies". The Oregonian . Retrieved 16 October 2019.
  20. ↑ "Season 5 Episode 8: Dutch Bros. Coffee". CBS . Retrieved 21 December 2018.
  21. ↑ "Nampa Dutch Bros. will be featured on 'Undercover Boss' tonight". Idaho Press. Retrieved 21 December 2018.
  22. 1 2 3 4 Adams, Susan (May 9, 2017). "Dutch Bros., A Forbes Small Giant, Is Moving Its Headquarters And Investing In Its Hometown". Forbes. Retrieved October 5, 2021.
  23. 1 2 Spencer, Malia (October 1, 2018). "Dutch Bros lands private equity investment, plans massive expansion". Portland Business Journal. Retrieved October 5, 2021.
  24. ↑ Kolliner, Kimberly (January 19, 2017). "Dutch Bros makes a multi-million dollar purchase for the community". KTVL . Sinclair Broadcasting. Retrieved October 5, 2021.
  25. ↑ Whiting, Lisa (March 27, 2017). "New home for Dutch Bros". Mail Tribune. Retrieved October 5, 2021.
  26. 1 2 Bjorke, Christopher (August 20, 2021). "Dutch Bros files for IPO, seeks to raise $100M". Phoenix Business Journal. Retrieved October 5, 2021.
  27. 1 2 3 4 5 Patton, Leslie; Hytha, Michael (September 15, 2021). "Dutch Bros Shares Get 59% Debut Boost After $484 Million IPO". Bloomberg. Retrieved October 5, 2021.
  28. ↑ Tanyeri, Dana (February 1, 2017). "Growth Chains: Woe is Who? - Dutch Bros Coffee". Foodservice Equipment & Supplies. Retrieved November 11, 2021.
  29. ↑ Oches, Sam (July 27, 2021). "Dutch Bros. gets a jolt from drive-thru". Nation's Restaurant News. Retrieved November 11, 2021.
  30. 1 2 Beltran, Luisa (August 23, 2021). "Dutch Bros Coffee Goes Public". Barron’s. Retrieved August 23, 2021.
  31. ↑ Pitz, Ray (August 8, 2013). "A sweet combination". Sherwood Gazette. Retrieved November 11, 2021.
  32. ↑ Wilson, Marianne (September 15, 2021). "Dutch Bros. goes public with big expansion plans". Chain Store Age. Retrieved November 11, 2021.
  33. 1 2 "Form S-1/A Dutch Bros Inc". SEC.gov. September 13, 2021. Retrieved October 14, 2021.
  34. ↑ "Dutch Bros Coffee to Go Public". Barron's . Retrieved 17 September 2021.
  35. ↑ Hamer, Cristal (December 10, 2021). "Dutch Bros Coffee opens Hollister location". KSBW. Retrieved December 10, 2021.
  36. ↑ "Dutch Bros holds 16th Annual Drink One for Dane fundraiser to support the fight against ALS". www.mda.org. MDA.
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