Dutch Bros Inc.
(Note: Dutch Bros filed confidentially for an IPO on June 11, 2021. The company filed its S-1 on Aug. 20, 2021. Revenue and net income figures are for the 12 months that ended June 30, 2021. Our sponsor is TSG Consumer Partners, LP, a leading private equity firm.)
As of June 30, 2021, we had 471 coffee shops across 11 states, 207 of which were company-operated and 264 of which were operated by our franchise partners. Based on our internal analysis and third-party research conducted by Quantitative Analysis, we believe there is long-term potential for at least 4,000 Dutch Bros locations in the United States.
From the prospectus – Founder’s letter signed by Travis Boersma, co-founder and executive chairman:
Coffee is what we do, but it is not who we are. My brother Dane and I founded Dutch Bros in 1992. We are third-generation dairy farmers, and changes to that industry were making our prospects pretty grim. So we used that reality as motivation to branch out and try something new. Dane and I shared a desire to do something extraordinary together. We bought a double-head espresso machine, cranked up the stereo, threw open the barn doors and started experimenting with coffee beans.
Pretty soon we were selling espresso from a pushcart in downtown Grants Pass, Oregon. That pushcart cost us everything we had at the time. But we got to be ourselves, rock music, make great coffee and hang out with people. It was a dream come true. Quickly we were making over $100 a day, but we were disciplined and took out just enough for our basic needs. We put the money back into the business and let it snowball.
One pushcart became five. We started to appreciate the social power of the musical element and the freedom to do business our own way. In 1994, we bought our first drive-thru. We didn’t know it at the time, but that was our niche and destiny. We had a patio, so people who wanted to hang out and listen to music could, and then we had our drive-thru, which was more convenient for people in a hurry. Around that time, one of our daily customers wanted to take what we were doing to a neighboring town and offered to pay us monthly for the use of the Dutch Bros name. We thought it sounded cool, so we wrote up an agreement and started training him. He opened a location and started performing just as well as we were with our primary spots.
The most important thing for us was building customer loyalty. If we could figure that out, we were winning. So when people would come back day after day, we rolled out the red carpet. Our broistas would have fun trying to make everyone smile and create a magnetic, contagious experience. That lives on in our company. It’s our culture, what we look for in our employees and our differentiator.
We had to learn how to scale the business while maintaining the level of customer experience and loyalty we knew was at the heart of what we do. We turned to franchise partners who were close to the mission and understood what Dutch Bros offers to its customers and communities. From the beginning, they helped us learn, grow, serve our customers and develop our broistas into amazing leaders. In 2008, I made a decision to stop selling franchises to anyone outside the existing Dutch Bros system and decided to grow from within using the leaders our franchise partners helped create. That shift was a game changer for us. In our 30th year in operation, Dutch Bros has expanded from that one pushcart to more than 470 drive-thru coffee locations in 11 states with over 16,500 people employed by us and our franchise partners.
(Note: Dutch Bros priced its IPO on Sept. 14, 2021, at $23 – $3 above the top of its $18-to-$20 range – on 21.05 million shares – to raise $484.15 million.)
|Industry:||Retail - Eating & Drinking Places - Coffee|
|Address||110 SW 4th Street Grants Pass, Oregon 97526|
|Phone Number||(541) 955-4700|
|View Prospectus:||Dutch Bros Inc.|
|Revenues||$399.56 mil (last 12 months)|
|Net Income||$6.29 mil (last 12 months)|
|Price range||$23.00 - $23.00|
|Est. $ Volume||$484.2 mil|
|Manager / Joint Managers||BofA Securities/J.P. Morgan/Jefferies/Barclays/Piper Sandler/Baird/ William Blair|
|CO-Managers||Cowen/Stifel/AmeriVet Securities/Penserra Securities LLC/R. Seelaus & Co., LLC/Tribal Capital Markets|
|Expected To Trade:||9/15/2021|
|Quiet Period Expiration Date:||Available only to Subscribers|
|Lock-Up Period Expiration Date:||Available only to Subscribers|
|SCOOP Rating||Available only to Subscribers|
|Rating Change||Available only to Subscribers|