What’s as bad as being addicted to cigarettes? Coffee except it doesn’t seem to harm people next to you. Actually, coffee drinks are cranky as hell when they don’t get their dose so it’s beneficial for everyone that they have some unlike cigarettes.
On that note, let’s talk about coffee. Coffee chains to be more specific. The most common questions we get are
- Can Dutch Bros Coffee ($BROS) be as successful as Starbucks ($SBUX)?
- Whose coffee is better?
- Can both be successful or is it a zero-sum game?
Let’s get to the facts.
Fact 1: $BROS is expanding. So far, they are not in every little strip mall like Starbucks but they are opening outlets all over, at least all over DFW. And it looks like they are expanding a lot in Denver area, according to a close friend. Just check out all the locations in Dallas-Fort Worth area alone.
Fact 2: $BROS is so busy. No Starbucks I know is this busy. Check out a photo below. And the one I go to off Spring Creek and US-75 has at least 7-10 cars waiting to be served no matter when I go. My local Starbucks, there is hardly a wait when I go. The photo isn’t from DFW, btw.
Fact 3: I can’t tell you if $BROS coffee is better since I am not a coffee drinker but my wife is. She thinks it as good. Why do I go? Because they have delicious non-coffee drinks that’s catered to a taste bud of a 10 year old like myself, which brings to my Fact 4.
Fact 4: And the survey says…kids overwhelmingly love $BROS over $SBUX. Check out a short survey that was done. Another survey says the same. And another one. All they have to bring is some food and they will be a place where a whole family can bring drinks for everyone…and food.
Conclusion: Do I need to say more? And with their stock price down more than 60% from ATH, I think this might be a good buying opportunity and hence, we have been adding positions. But again, before you do any investments, do your own DD. Don’t forget. It’s your own decision.