Vermont-based coffee chain Dutch Bros BROS hit critical on Friday, taking a breather after a breathtaking post-initial public offering IPO which saw the stock reach double gains two days in a row.
After pricing earlier this week at $23 per share, Dutch Bros came to market on Wednesday at a higher-than - expected $32.50 and rose as high as 71% intraday.
The stock followed its surge on Thursday, but dropped by over 11% in Friday's trade, but hovered near $43 per share, suggesting investors have faith the brand can go toe-to-toe with competitors like Starbucks SBUX Dunkin' and Tim Hortons QSR President and CEO Joth Ricci told Yahoo Finance Live that the IPO was culmination of 30 years of hard work by thousands and thousands of employees and people across the western half of the U.S. that have really built Dutch Bros. The company was founded in 1992 by brothers Dane and Travis Boersma as a dual pushcart espresso machine with a single-head espresso machine in Grants Pass, Oregon.
As of June 30th, 2021, it has 471 cities across 11 states including Oregon, Washington, California, Idaho, Arizona, Nevada and Colorado. Comfounder Joth Ricci believes discipline growth put the 30-year-old company in a good position for this public debut.
From the very beginning we've been a very disciplined company, Ricci added. The company intends to make its way to the east coast in time with the intention to be somewhere on the eastern seaboard within the next few years maybe three, four. In 2020, Dutch Bros reported $327.4 million dollars in revenue, compared to $186.0 million in 2017 - $985.0 million in revenues. The company also saw same-store sales increase 2 percent in 2020 despite the impact of COVID -19 pandemic on restaurant industry.
According to the company's S-1 filing, as of June 30 there are 264 franchised shops, with 207 being company-operated. Back in 2008, the company made the decision to step selling franchises to anyone outside of existing Dutch Bros system and grow using leaders within its franchise partners.
Now the company plans to accelerate this decision with the long-term potential of at least 4,000 Dutch Bros locations in the United States.
Over the last three years, we really accelerated our company-owned shops. We are almost at about 45% company owned now and 55% franchise and most of our new locations in the future will be company-owned, Ricci noted.
However, as fast food chains and franchises get hit by labor and food shortages, Ricci believes the company is still in a good position. He said the company went from a kind of great situation in hiring to good amid the worker crunch.
And we haven't had the challenges that we've seen other people have and as long as we keep our culture. we focus on our people, we focus on the chemistry that we have within our stands and delivering that service. we feel like we're in a pretty good place on labor end, he added.
Unique to the brand is Blue Rebel energy drink, which comes in an assortment of flavors like Electric Berry, Aftershock, Shark Attack, Double Rainbro and Peach. Customers can customize it themselves in a straight up drink or as slushy energy.
Ricci believes that the customization of what we do with energy provides a really unique proposition for the company. Back in 2012, the company also launched 8.4 oz cans that are currently available at drive-thrus.
The brand may however have eyes on competitors energy drinks like Red Bull and Monster, according to Ricci, as it weighs seeking shelf space in stores.
When you think about it happens to you in convenience stores and grocery stores and how broad Red Bull, Monster and the category they created have been. I think there continues to be a great opportunity for us in energy, Ricci added.
Brooke DiPalma is a producer and reporter for Yahoo Finance. You can follow her on Twitter at BrookeDiPalma or email her at bryangold.com/Bdipalma.