Dutch Bros, the Oregon-based coffee brand that in 2021 went public on the New York Stock Exchange in an IPO that made its co-founder a billionaire, announced today a handful of leadership changes and its unit growth outlook for 2024.
CEO Christine Barone, speaking at the ICR Conference in Orlando January 8, said Josh Guenser will join the company as chief financial officer in February following a “long transition” with CFO Charley Jemley. The company’s CFO since early 2020, Jemley, who noted he is 60 years old, said his plan when he came in was to eventually transition out, and Dutch Bros “is in great shape.” Guenser comes to Dutch Bros from MOD Pizza, where he was CFO, and he also spent more than 10 years at Starbucks, including as senior vice president of finance for the Americas.
As Dutch Bros’ new president of operations, beginning in mid-January, Sumitro Ghosh will spend his first months immersed in daily shop operations, said Barone. “We want to make sure Sumi knows how to make every single drink,” she said, as he also gets to know team members and franchisees. Like Guenser, Ghosh held roles at Starbucks, including chief operating officer, said Barone, herself a former Starbucks executive. Ghosh most recently was a global vice president at Nike; he takes over for COO Brian Maxwell, who will transition to vice chairman and report to Co-founder and Executive Chairman Travis Boersma.
A third new leader, Jess Elmquist, comes in this month as chief people officer. He spent 20 years at fitness company Life Time and most recently was chief human resources officer at Phenom People.
Barone, who joined Dutch Bros in November 2022 as president, took over as CEO at the start of this year as part of a previously announced executive change. She said the company has been “thoughtful” about hiring as it brings on executives who have worked at scale and also in smaller organizations, and who embrace the company’s servant leadership approach.
Christine Barone took over as CEO of Dutch Bros at the start of this year, replacing Joth Ricci.
Dutch Bros has 831 drive-thru coffee shops, said Barone, and is targeting the opening of 150 to 165 locations in 2024. Much of that development will be with corporate stores, while existing franchisees will have the ability to grow in their markets, she said.
Dutch Bros opened 159 new stores in 2023, 146 of them company-operated units. “We’ll have a much higher mix of company-owned growth” going forward, she said. Of the brand’s 831 units, 542 are company owned, versus 289 franchised stores.
As it expands, Barone said the strategy is one of going “a little bit wider before we go deeper,” meaning a higher mix of new markets and slower infill. Dutch Bros plans to incorporate more 1,200-square-foot endcaps, which are a small percentage of its existing units, in addition to its current prototype, which is a freestanding store at 800 to 1,000 square feet with multiple drive-thru lanes served by one window. Most stores also have a walk-up window.
That walk-up window, said Barone, could give Dutch Bros an advantage if it introduces mobile ordering. The brand has an app, and 65 percent of transactions go through its rewards program, but it doesn’t have digital ordering capabilities. If the company went that route, it would need to first ensure it could execute those orders in “a Dutch Bros way” with a focus on service and the customer experience.
Dutch Bros made a big push into Texas, a new market, starting in 2021 and has added dozens of stores since. It’s looking to make a similar effort in Florida, where its first store will open later this year in the Tampa area, and where it will deploy the wider-not-deeper strategy and aim to boost brand awareness.
Tana Davila joined the company as chief marketing officer last summer, and Barone said they’re focused both on growing fans of the brand and growing sales at existing units. As it accelerates new unit development, the company is likewise focused on alleviating pressure at those stores as they often deal with a crush of customers.
“We want lines, but we don’t want them to be so long that they discourage trial or that they discourage customers coming,” said Barone, and part of the effort is getting the second and third stores in a new area open quickly but not placing them so close together that they pull down traffic and sales from nearby shops.
Same-store sales grew 4 percent for the third quarter, according to the company’s earnings report, and Dutch Bros had record revenue of $264.5 million, up 33.2 percent from the same quarter the year prior. The systemwide average unit volume was $1.95 million for the nine-month period ending September 30.
The company will announce its fourth quarter and full-year 2023 results in February.