Dutch Bros Inc. is riding a wave of momentum in the U.S. coffee market, with second-quarter results showing strong growth even as rival Starbucks continues to face a slower turnaround.
The Oregon-based coffee chain reported 6.1% same-store sales growth in its latest quarter — an improvement from Q1 — alongside the opening of 31 new locations across 13 states. CEO Christine Barone attributed the performance to a compelling value proposition, noting that customers are responding positively to the brand’s drink sizes, pricing, and overall offering.
“We are in growth mode,” Barone said, adding that Dutch Bros plans to expand to 2,029 stores by 2029. The chain currently operates more than 1,000 outlets across 18 states.
Stock Market Momentum
Dutch Bros shares have risen more than 30% in 2025, buoyed by investor confidence in its expansion strategy and market share gains. Analysts point to Starbucks’ ongoing U.S. sales slump — six consecutive quarters of declines, including a 2% drop in the most recent period — as creating space for competitors like Dutch Bros to grow.
William Blair analyst Sharon Zackfia noted that the company’s robust second quarter performance undermines the idea that Starbucks’ eventual recovery will limit Dutch Bros’ progress.
Navigating a Competitive Landscape
The broader quick-service and beverage market is seeing intensified competition. Taco Bell is rolling out more of its Live Más Café concept stores, while McDonald’s is expanding its beverage offerings. Barone, however, said the brand is used to competition, having been in business since 1992.
“There will always be new competitors coming into the market,” she said.
Starbucks Looks to Regain Ground
Starbucks, meanwhile, is working to strengthen its value proposition under CEO Brian Niccol, who took the helm in August 2024. While the company says it has made progress over the past three quarters, analysts believe it still has work to do.
Baird analyst David Tarantino recently upgraded Starbucks to Outperform from Neutral, citing an expectation that the brand’s turnaround strategy will become more evident in the coming quarters. Starbucks stock is up 2% in 2025.
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IMAGE: Dutch Bros.
