Dutch Bros reveals US growth ambitions in IPO prospectus

Dutch Bros is preparing to launch an IPO that could value the company at up to $3.3bn | Photo credit: Dutch Bros

Dutch Bros has made its investor pitch as it prepares to launch an IPO that could value the company at up to $3.3bn. The Oregon-based coffee chain has filed to raise approximately $400m according to a prospectus filed on 7 September 2021.  

Founded in 1992, Dutch Bros has grown from a single mobile kiosk in Oregon to a national network of drive-thru coffee shops in the US.  

Its IPO prospectus highlighted that the company had increased its store count from 254 locations in seven states at the end of 2015 to 471 stores in 11 states as of 30 June 2021. As of 30 June 2021, 264 of its sites were franchised and 207 were company-operated.  

“Our vision for the company is simple: a bright future. That vision isn’t limited to Dutch Bros. It’s about the whole community and how we can be of value, not just to our customers’ communities but also to the communities of origin where we source our coffee,” wrote company Co-founder and Executive Chairman Travis Boersma. 

Dutch Bros’ drive-thru model proved highly beneficial during 2020, enabling the store to continue trading during Covid-19 lockdowns when many other brick-and-mortar coffee shops were forced to temporarily close or modify trading.

World Coffee Portal data shows the proportion of US consumers surveyed favouring drive-thru over entering a coffee shop has increased from 48% in 2019 to 63% in 2020. That year, Dutch Bros reported system wide average unit volume (AUV) grew approximately 3% to $1.7m.  

‘With an average check of approximately $7.50, we are busy from early morning through the end of the day to generate these AUVs’, the company wrote. 

Despite Dutch Bros’ net income decreasing from $21.2m in 2018 to $5.7m in 2020, the coffee chain highlighted that 2020 represented its fourteenth consecutive year of positive same store sales growth.  

Indicating a recovery from sales disruption over the past year, revenues rose from $327.4m in 2020 to $404.5m in the 12 months ended 30 June 2021. 

Notably, the coffee chain also reported that coffee comprises just 16% of beverage sales. Dutch Bros’ Blue Rebel energy drinks are its biggest sellers, comprising 24% of beverage sales, with iced coffee and cold brew making up 16% and 4% respectively. The company's afternoon daypart from 12-4pm is its busiest, when 29% of sales are made.