The pandemic is receding, economies are reopening. Which brings us to … our everlasting need for coffee. How else to get ready for the Zoom calls that still are the mainstays of working from home — and of course, for the daily commute as we return, in some cases, to the office?
In what might be a sign of confidence for investor enthusiasm and for its own growth prospects, Dutch Bros Coffee said this week that it has filed, confidentially, with the Securities and Exchange Commission (SEC) for an initial public offering (IPO). Terms are nebulous so far, as the number of shares, and the wealth of information generally available in an S-1, remain undisclosed.
Generally speaking, casual dining — and specifically, firms focused on morning rituals — have been aiming to list on the public markets. The Dutch Bros announcement comes on the heels of Krispy Kreme’s own filing for an IPO, for example.
The filing was not unexpected — as noted in this space last month, the coffee company has been mulling a listing, per reports in Bloomberg, that would be worth about $3 billion.
Like other companies also in the java business, such as Starbucks, Dutch has been finding success with its rewards program — in this case, forged in tandem with Paytronix, and where more than 1.4 million users signed up in the first month. The rewards app also features contactless payments.
“The U.S. coffee shop market is enduring the worst trading environment in living memory,” Allegra Group CEO Jeffrey Young told Reuters in January, as PYMNTS recounted. “However, with a changing political situation, mass vaccinations and operators rapidly adapting with new trading formats, there is light at the end of the tunnel. We expect trading to begin stabilizing from summer 2021, however it will take a number of years for operators to fully readjust to the ‘new normal.’”
Along the way, loyalty programs have their rewards, literally, for the firms that deploy them.
PYMNTS surveys done in conjunction with Paytronix found that digital loyalty rewards programs can serve as a tailwind for sales — as 45 percent of restaurant customers would spend more if they were offered a rewards program, and 31 percent said they would spend more if ordering their consumables on a mobile app.
Dutch Bros has been able to move through the pandemic with the advantage of having the overwhelming majority — about 97 percent — of its business tied to drive-thrus. The National Coffee Association said earlier this year that drive-thru and app-based ordering are each up 30 percent since the start of 2020.
As reported by Forbes, as of late last year the company had more than 420 locations and has been continuing its expansion across the Western United States, having opened more than 50 locations last year, and aiming for 85 additions this year — and may see as many as 300 to 400 more locations through the next three to five years.