Consumers increasingly want their morning caffeine fix from the comfort of their car. Coffee quick-service restaurant (QSR) chain Dutch Bros. is aiming to raise over US$421 million in its initial public offering (IPO), going for a valuation of more than US$3.3 billion, per a filing with the US Securities and Exchange Commission (SEC) on Tuesday, September 7, reported PYMNTS.
The chain’s drive-thru model allowed it to thrive during the first year of the pandemic, while other restaurant brands struggled to pull through. The brand’s revenue grew 37% during 2020, which the filing attributes to its drive-thru focus.
“Our drive-thru operating model proved highly resilient by providing our customers with a safe and convenient way to visit, buy a beverage and make a personal, human connection in a time of crisis,” stated the filing.
According to PYMNTS, QSRs saw drive-thru sales surge during the pandemic, as contagion-concerned consumers stayed out of dining rooms, opting for the safety of staying in their own vehicles. The coffee away-from-home channel struggled with the turn to remote work, making Dutch Bros.’ positive sales growth more impressive.
However, with its speed and convenience value proposition, Dutch Bros. has stiff competition, forced to stand out against QSR giants such as Starbucks, Dunkin’, McDonald’s and others.
“We expect competition in this market to continue to be intense as we compete on a variety of fronts, including convenience, taste, price, quality, service and location,” Dutch Bros. acknowledges in the filing. “If our company-operated and franchised shops cannot compete successfully with other beverage and coffee shops, including Dunkin Donuts, Starbucks, other specialty coffee shops, drive-thru QSRs and the growing number of coffee delivery options in new and existing markets, we could lose customers and our revenue could decline.”
Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.
