Dutch Bros discovered the secret to beating coffee giants—don’t sell actual coffee. The Oregon-based chain serves roughly 90% of its drinks cold, focusing instead on customizable energy drinks like the OG Gummy Bear Lemonade and Shark Attack Rebel that pack 111 grams of sugar into an iced large.
The strategy worked. Dutch Bros now ranks as America’s third-largest coffee chain behind Starbucks and Dunkin’, with 1,140 locations and $1.6 billion in business. Energy drinks alone account for 25% of sales, while traditional hot coffee barely registers. “The market is moving that way, and that is the core to what we do,” CMO Tana Davila told The Wall Street Journal.
Founded by two dairy farmers in 1992, Dutch Bros built its business around what Gen Z actually wants: Instagram-worthy cold drinks they can customize with 40-plus flavors, boba toppings, and protein add-ons. While Starbucks fights for morning commuters, Dutch Bros owns the afternoon energy-drink crowd that older chains have ignored.
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Dutch Bros discovered the secret to beating coffee giants—don’t sell actual coffee. The Oregon-based chain serves roughly 90% of its drinks cold, focusing instead on customizable energy drinks like the OG Gummy Bear Lemonade and Shark Attack Rebel that pack 111 grams of sugar into an iced large.
The strategy worked. Dutch Bros now ranks as America’s third-largest coffee chain behind Starbucks and Dunkin’, with 1,140 locations and $1.6 billion in business. Energy drinks alone account for 25% of sales, while traditional hot coffee barely registers. “The market is moving that way, and that is the core to what we do,” CMO Tana Davila told The Wall Street Journal.
Founded by two dairy farmers in 1992, Dutch Bros built its business around what Gen Z actually wants: Instagram-worthy cold drinks they can customize with 40-plus flavors, boba toppings, and protein add-ons. While Starbucks fights for morning commuters, Dutch Bros owns the afternoon energy-drink crowd that older chains have ignored.
Sign up for the Entrepreneur Daily newsletter to get the news and resources you need to know today to help you run your business better. Get it in your inbox.
