David vs. Goliath

If you live on the East Coast, you have probably never heard of Dutch Bros. It is a coffee shop that has grown to more than 800 locations and is growing 5x faster than Starbucks. Why is Dutch Bros so successful?

Why Dutch Bros?

The company has carved out a niche in the competitive coffee market with a different format. It is not a cafe. It sells coffee in a drive-through format with a limited walk-up offering and loud music to keep people moving rather than sitting.

It makes sense. When you are at a rest stop with a Wendy’s, a McDonald’s, and a KFC, the Starbucks brand and decor doesn’t fit. Think of Dutch Bros as a younger, more light-hearted version of Starbucks that belongs right next to an In-N-Out Burger.

Different Customer Base

Dutch Bros’ positioning creates one big difference in its customer-base relative to Starbucks: Age. Nearly 60% of Dutch Bros customers are under the age of 25. Meanwhile the average age of a Starbucks customer is 42.