Dutch Bros at Baird Conference: Strategic Expansion and Growth Plans

On Thursday, 05 June 2025, Dutch Bros Inc (NYSE:BROS) presented at the Baird Global Consumer, Technology & Services Conference 2025. The company outlined its strategic plans for growth amidst both opportunities and challenges. Dutch Bros emphasized its drive-through model and cultural strengths while acknowledging the pressures of coffee inflation and competition.

Key Takeaways

• Dutch Bros plans to expand to 7,000 shops in the U.S., focusing on drive-through locations.
• The company reported strong Q1 performance, driven by transaction growth and mobile ordering.
• Dutch Bros is testing an expanded food program and aims to enhance morning sales.
• Despite coffee inflation, the company aims to manage margins through strategic pricing.
• Mobile ordering and the Dutch Rewards program have significantly increased transaction frequency.

Financial Results

• Dutch Bros targets over 20% revenue growth and aims for shop-level margins around 30%.
• Q1 performance was strong, with continued strength into April.
• The company anticipates 110 basis points of margin pressure from coffee costs in 2025.
• Dutch Bros expects about 90 basis points of leverage in G&A efficiencies this year.
• The company plans to turn cash flow positive next year.

Operational Updates

• Dutch Bros operates over 1,000 shops and focuses on drive-through service.
• The company launched mobile order and pay nationwide in Q4 of last year.
• Mobile orders accounted for 11% of transactions in Q1 2025.
• Dutch Bros is piloting an expanded food program in 32 shops.
• The company is using a speed dashboard to improve drive-thru efficiency.

Future Outlook

• Dutch Bros plans to reach 2,029 shops by 2029, with a total addressable market of 7,000 shops.
• The company is refining market planning to optimize new store performance.
• Despite strong recent openings, Dutch Bros does not expect this trend to continue at the same pace.
• The company is managing competitive pressures through strategic initiatives and cultural strengths.

Q&A Highlights

• CEO Christine Barone emphasized the importance of Dutch Bros’ unique culture and internal growth.
• CFO Josh Genser discussed the benefits of mobile ordering in balancing demand across production zones.
• The company highlighted its differentiation through strong brand recognition and employee-driven operations.

For more details, please refer to the full transcript.

Full transcript - Baird Global Consumer, Technology & Services Conference 2025:

David Tarantino, Restaurant and Coffee Analyst, Baird: Afternoon, everyone. Welcome to the session for Dutch Bros. I’m David Tarantino, the restaurant and coffee analyst at Baird. Dutch Bros is an operator and franchisor of just over a thousand beverage focused shops. The brand is very unique, mostly drive through operation and delivers that with exceptional hospitality.

And that has led to really good returns on capital for their locations and a lot of room for growth in our view. We have two members of the management team with us today, president and CEO, Christine Barone, and and CFO, Josh Genser. So welcome to both of you. Glad you’re here.

Christine Barone, President and CEO, Dutch Bros: David, thank you so much for having us.

David Tarantino, Restaurant and Coffee Analyst, Baird: Yeah. Great to great to see you. So I thought maybe a good place to start, there’s a lot of generalist investors in the audience.

Josh Genser, CFO, Dutch Bros: Maybe

David Tarantino, Restaurant and Coffee Analyst, Baird: you can just frame up the Dutch Bros story and and and what makes the brand special, if you will, please.

Christine Barone, President and CEO, Dutch Bros: Awesome. And I have a couple of slides I can go through to help us answer that as well. So we do have our usual disclaimers. If you can read really fast, I won’t read that out loud. So a little bit of just who we are.

So as as David shared, we have just over a thousand shops. We are a drive through only beverage concept. We were founded over thirty years ago in 1992 in Grants Pass, Oregon. And we have a lot of customization, and we’re really known for our service and and how how we provide it to our customers. If you look at why and what builds actually our culture.

And our culture is really key to the success that we’ve had. So one of the things we talk a lot about is our core values and who we are. Radiate kindness, we hire for that. We bring people on board and have that expectation of all of us to radiate kindness. Get up early, stay up late.

That means that we we do what it takes to get the things done that we wanna get done and serve our customers in the most awesome way possible, and then change the world. So we have a lot of philanthropic giving that we do as a company. We have three national givebacks that we do every single year, and most of our shops do three local givebacks as well to really become part of our community. It’s one of the things our broistas, who are making and serving our drinks, most love about the brand is that philanthropic giving and their ability to participate in it and to give back to causes that they care about. So when you look at our overall strategy and how we’re growing, it always starts with our people.

So we grow from within. And when we open a new market and a new shop, we’re doing so with an operator, which is our level that sits just above shop, who’s been with the brand, knows and loves the brand. We have a pipeline of over 400 operators who have been with the brand an average tenure of seven years, and that really drives our success. So all of our operations leadership, all of those operators started as Broistas. We’re also growing our shop base rapidly.

So we shared during our investor day that we we would love to grow to twenty twenty nine shops in 2029 as our short shorter term goal, and then overall believe we have a TAM of 7,000 shops in The US that are drive through focused. We’re also looking at growing our transactions. So I’m sure David will have a question or two for me about food and mobile order and some of the marketing initiatives we have. So I’ll hold those for you. And and then we’re also growing our margins.

So we expect to be able to leverage our g and a as we as we continue to grow. And then finally, again, I’m sure that this is something we’ll talk more about through this half hour, but we believe that we we have multiyear layers of of sales growth and initiatives that can help drive that. So kinda starting with those base marketing initiatives, we very recently launched mobile order and pay. We’re also for focused on driving throughput, helping customers get through the lines more quickly. And then finally, we’re at the very early stages of testing a broader food program within our shops.

And so with that, I’ll turn it over to you.

David Tarantino, Restaurant and Coffee Analyst, Baird: Great. Thanks for the overview. Josh, I think you shared some of this recently at the Investor Day, but for those that might have missed it, could you just maybe talk about how some of this translates to annual financial targets, so revenue growth, profit growth, that kind of thing?

Josh Genser, CFO, Dutch Bros: Yes, you bet. So we outlined it in our Investor Day. As you pointed out, our long term growth algorithm being 20% plus revenue growth. We are targeting shop level margins at the 30% range. We’re right around that now, feel like it’s a very healthy place for us to be.

So 30% shop level margin. We’re targeting comp growth. So to go back to revenue pieces of that comp growth in the low single digits, unit growth in the mid teens. So a big part of our growth, as Christine pointed out, will be continuing to grow our shop base towards the 7,000 shop TAM and EBITDA growth at north of 20%. So growing EBITDA at a rate faster than our revenue growth.

David Tarantino, Restaurant and Coffee Analyst, Baird: Great. Thank you for that. Maybe before I ask about some of the specific growth drivers, I wanted to ask if you can talk about how the business has been faring more recently. You had a good Q1 performance. I guess how are you viewing the current trajectory of the business?

And also maybe if you can comment on how you’re viewing the current consumer environment given there’s been mixed messages from a lot of companies even at this conference. Yeah.

Christine Barone, President and CEO, Dutch Bros: And so what we’re what we’re sharing today is really what we shared in our q one earnings call. So we had a really spectacular q one driven by that transaction growth. We were the second quarter into launching mobile order and felt that was was helpful in driving, as well as just, I think, the general brand and how all of our marketing initiatives are working. We also shared that that strength continued into April, so we were really happy with what we were seeing. And I think in this environment, we’re we’re in a unique position in a number of different ways.

One, we have a very strong value proposition. That value proposition is driven by a number of things. So one, I think we’ve been super thoughtful about about taking price. But maybe just as importantly, I think that what we provide from a service perspective really is a lot of value. When you feel better once you’ve gone through our drive through and received your drink than when you came in, and that level of connection and service is something that’s super super special.

We also this is a medium sized drink for us. In this cup, it’s 24 ounces. So I think the sizing of our drinks actually provides substantial value to our customers. And then our rewards program, that within beverage that rewards and that when the day you get your free reward and go get your drink, it’s something that is really it’s it’s special to you as a customer. So I think all of those things are providing kind of strength in the brand.

And then you add to that, I think, these idiosyncratic growth drivers that we have to drive the business. So mobile order has been in the beverage industry for quite some time. So we’ve just launched that nationwide in q four of last year. We’re testing an expanded food program. And some of our marketing initiatives like Dutch rewards, we’re still in the early innings of that where we’re doing primarily mass offers now, but have an opportunity over time to better personalize that and and even use that data to help us understand how to better drive transactions and frequency with our customers.

David Tarantino, Restaurant and Coffee Analyst, Baird: I definitely wanna come back to a couple of those topics. But but before I do, I wanted to explore unit growth, which is the biggest driver of the business. And perhaps the first question is the 7,000 unit target and how you arrived at that target and your kind of degree of confidence in the analytics around that number.

Josh Genser, CFO, Dutch Bros: Yes. Yes. So we spent a lot of time actually evaluating a variety of seed points. So as we built out our TAM, we’ll take a variety of inputs based on how our shops have performed over recent openings and over the years. And we’ll take a look at different trade areas, specific sites throughout the nation that would allow for drive thru, the drive thru concept.

But we’ll so we’ll run that through a variety of different models to provide an output of where we think we can open sites that would meet our target thresholds. We target $1,800,000 for year two AUVs, which we think a very healthy level of volume given the returns we see at that level. So when you kind of run it through those various models, it gives you the nice output. We’ll do some higher level math as well. If we were just to look at the penetration of some of our most densely penetrated markets and extrapolate that across the country, you actually get quite a bit higher number than the 7,000 shop TAM, but I feel really good about kind of that bottoms up build that we did to arrive at the number we have.

David Tarantino, Restaurant and Coffee Analyst, Baird: And one question I get a lot is there’s just a lot of competition trying to replicate what you’re doing. So there’s Seven Brew, there’s scooters, there’s probably a lot more that I don’t even have time to name here. So I guess, how do you think about the competition, you know, relative to that TAM, you know, and and and, you know, do you do you worry at all about the space getting too crowded?

Christine Barone, President and CEO, Dutch Bros: Yeah. I think if you look at competition over time, we’ve been around for a very long time, so I’ve seen many different waves of beverage competition as as we’ve grown. I think that it that beverage and coffee in particular has always been one of the most highly competitive spaces in the market. And and then when you look at, I think, any any great brand that’s doing something interesting, you would you would guess that you would have some folks who are doing something that looks similar to you. I do think with what we’re trying to do, we have a very strong point of view on the market.

I think we have a very unique point of view on the market. And we’re growing from within with our people. And so, you know, I think when you when you take a step back, like food and beverage looks like it’s easy to do from the outside. But the great enduring concepts and the great enduring brands really bring a unique point of view, and it’s always about the people. And I think the fact that all of our shops in new markets are opened by our our people is just something that’s incredibly differentiated versus where the rest of the market is.

And then I think it’s also with in the age of social media and TikTok and all of those things, I think that Dutch Bros, when we go into a new market, we are often fairly well known. People will drive for miles and miles to come see and experience that new shop. And I think we hear a lot from our customers. Well, Dutch Bros is the OG. And I think that’s really important to to the market.

David Tarantino, Restaurant and Coffee Analyst, Baird: Yeah. Makes sense. You made some refinements to your go to market approach in terms of how you’re building the units and how you’re entering the markets. Can you describe kind of what changes have been made and what you’re seeing as a result of those?

Josh Genser, CFO, Dutch Bros: Yes. So certainly, over the last eighteen months or so, really have taken a revised approach towards our market planning. So as you think about how the brand has grown over the last thirty years, it was very slow, steady growth primarily on the West Coast and started expanding rapidly across the country over the last five or six years. And with that rapid expansion, you start ingesting a lot more data and a lot more insights. So we were able to capture a lot of insights from those more recent openings and feed that into our our various tools that we use to evaluate site selection.

What we learned from that is is it’s, one, it’s helped inform our understanding of how a site will open when we open in in new markets and new places. It also we took some learnings back that while we have a lot of customer demand and people are really looking for convenience for from us and being close to to where they live and work, when you open a site right next to another one within really close period of time, it doesn’t allow for the allow enough time for the site to develop the brand awareness and customers to really get excited based on the long lines that we often get at our shops. So what we’ve adjusted as we’ve refined and taken in new data is that we have we will space them out initially within time a little bit more before we go in and put that site a little bit closer to the one we had opened in the past. So it’s allowed us to be certainly improve our overall new shop productivity. We’ve seen that in more recent quarters.

We did make some adjustments to the pipeline in and around that time as well. So some of the first steps we took in that market planning approach was to take a few of the sites out of the pipeline, do a little bit of the culling of the pipeline. We saw that play out here as we’ve got a slightly lower opening cadence in the first half of the year than we’re expecting for the back half of the year as well. It takes some time for new sites to start working their way through the pipeline, and we’re starting to see that play out here as we get into Q3 and Q4.

David Tarantino, Restaurant and Coffee Analyst, Baird: You referenced that there was that was going be my next question about the sales performance for new units was very strong the last couple of quarters. And is that I guess, what do you attribute that to? Is that part of the strategy or is that something else?

Josh Genser, CFO, Dutch Bros: I think it’s really a result of those market planning efforts. As I said, we took some sites out of the pipeline. We left the ones that were the strongest in the pipeline. I think at the time when we made those decisions, we weren’t fully aware of the impact that all of the great initiatives we’ve been driving over the last eighteen months would have on overall shop performance. And that allowed for those sites to be incredibly strong performers.

We did have some fantastic openings that opened well above even our expectations. So I wouldn’t I wouldn’t at all suggest that what we saw in q four and q one is what we plan to do over the longer term. We still feel very good about the $1,800,000 year two AUV over the longer term. We had some really strong, really exciting openings, just as Christine pointed out, places where people were waiting for us to open some really long lines. We’d be happily open another one right next to some of these shops that we just opened, just given the excitement and demand.

But yeah, we’ve I would really attribute it mostly to the market planning efforts and the shift in the pipeline.

David Tarantino, Restaurant and Coffee Analyst, Baird: Got it. I was going to ask the guidance for this year does not assume that continues, it seems, based on Correct. Maybe I’m bad at math, but I don’t think you’re assuming that. I guess is that a conservative assumption or is that just what you think is more realistic?

Josh Genser, CFO, Dutch Bros: I think you have, in fact, two things. I think certainly, obviously, the sites we’ve opened are doing well and we expect them to continue performing strong. I think we have the sites that we’re opening Q1 and Q2, I pointed out, are benefiting from us pulling out some of those lower expected performing sites in the past. We’ll start introducing new sites into the pipeline coming into Q3 and Q4. So I wouldn’t expect Q1 and Q2 to continue into Q3 and Q4 for all new sites.

And certainly, that’s not the longer term expectation as well.

David Tarantino, Restaurant and Coffee Analyst, Baird: Got it. And on the $1,800,000 that is below the average. So can you just explain why you think the future openings are going to be lower than what you currently have? Yes.

Josh Genser, CFO, Dutch Bros: I mean if you think about what our customers are looking for is increased convenience. And a lot of that we can deliver through mobile order. We can deliver that through improving our throughput, but we can also do that by opening sites closer to where they are so that they can more easily access us. And as we think about creating that convenience across the country as we grow and expand. We want to make sure we’re creating that opportunity.

So that’s where that $1,800,000 would be, one where we feel really good about the returns we’re generating with the capital we’re deploying and creating the convenience for us to build that customer and that brand love.

David Tarantino, Restaurant and Coffee Analyst, Baird: Got it. Maybe shifting to some of the sales drivers for the business overall. Mobile order and pay has been, as you said, just introduced in the fourth quarter. Just wondering, Christine, if you could just talk qualitatively about what that’s done for the business and what the impact has been financially as well.

Christine Barone, President and CEO, Dutch Bros: Yes. So as we take a step back and look at our broader strategy, about a third of our transactions historically have been in the morning, a third midday, and a third in the afternoon. And as we look at the broader beverage market, that is typically more like 50% in the morning. And so as we looked at areas where we could really expand and help drive our AUVs, understanding kind of what is most important and what fits best with our brand in that morning daypart. So a couple of things.

One, it’s the convenience, build more shops. Two, mobile order is more important in the morning. And it’s it’s often a decision factor as to to where you’re going to go in the morning. And then food is important in the morning as well. And so when we look at at mobile order, in q four, we ended the the quarter with 8% transactions in mobile orders.

Our very first quarter, we were already at 8%. We ended Q2 at 11% of our total trend or Q1 at 11% of our total transactions being through mobile order. And strategically, it’s doing just what we thought it would do. So there, it’s heavier transactions in the morning. We also are set up where we have a drive through window on one side and a walk up window on the other side.

We have two production zones sitting right next to those windows. And so when you choose mobile order, customers are more often choosing to come to the walk up window. So that’s helping us balance our demand across our production zones in a helpful way. Because traditionally 90% of our volume would go out of the drive through window and with mobile order more than half of the volume goes to the walk up window.

David Tarantino, Restaurant and Coffee Analyst, Baird: And are you able to determine what’s incremental and what’s not with mobile ordering? Any way to frame up what the benefit you’ve seen so far, you know, in the first quarter, for example?

Christine Barone, President and CEO, Dutch Bros: So, yes. A couple of ways that we look, and we do believe mobile order is incremental. So the first thing is is 72% of our transactions in Q1 of twenty five were through our Dutch rewards program. So we can watch what a customer was doing before they made their first mobile order, when they make their first mobile order, and then what does their frequency look like afterwards. So we do see an increase in frequency in those same customers once they make that first mobile order.

The other piece is the Dutch rewards registrations itself. So you have to sign up for Dutch rewards in order to use mobile order. And we have seen from q one of twenty four to q one of twenty five, we saw a 500 basis point increase in the penetration of Dutch rewards. And many of those new rewards members who were signing up, their very first transaction was a mobile order. And so that again is someone either deciding to very much deepen their relationship with us or that’s a new customer coming in for the first time.

So and saw that acceleration both in q four and q one. So that that’s the incremental piece. I think the piece that we can’t that that we can’t measure, but, you know, could also be out there is that when a customer is no longer sitting in the drive through line, but now they’re coming to the walk up window, that line is now shorter for new customers to come into that line. That one’s harder for us to measure, but we do believe from what we’ve seen that those other two drivers really are part of the incrementality of mobile order.

David Tarantino, Restaurant and Coffee Analyst, Baird: And have you have you tried to add all that up and say this is lifting the business by x?

Christine Barone, President and CEO, Dutch Bros: We have, but we haven’t shared that. So we we look at that closely. And and what I do think is there is there is a lot of interaction actually between the things we’re doing. So if mobile order is actually driving customers more quickly into Dutch rewards, and at the same time, we’re getting better at sending the right offers at the right time in Dutch rewards. There’s just a lot of overlap in how all of these different initiatives work together.

David Tarantino, Restaurant and Coffee Analyst, Baird: Sure. So it went from 8% to 11%. Where do you think it can go over time?

Christine Barone, President and CEO, Dutch Bros: Yeah. So so we haven’t shared a number for that. And and really the way that we’re thinking about it is what we’re most interested in is the incrementality and where it drives and satisfying our customers. So if they wanna use that channel, we wanna make it as easy as possible for them to use that channel. And so what we are doing is looking at where do we think it’s differentially helping to add extra demand, and then how do we focus our efforts on those pieces of it.

David Tarantino, Restaurant and Coffee Analyst, Baird: How are you, I guess, you know, another brand you compete with and used to work there, had issues kind of balancing the mobile ordering and the, you know, the hospitality and the in restaurant or in in store experience. How do you plan to balance this and make sure it doesn’t, I guess, affect what’s special about the Dutch Burger experience?

Christine Barone, President and CEO, Dutch Bros: Well, I think as we start looking at anything that that could be in our future, the very most important question we ask is how does this impact our work environment? How does this impact our broistas? And who who are we at our essence? And how do we make sure that we keep those things intact? And so with mobile order, we are known for service.

We’re known for that very quick connection and that smile or that special birthday cup that we give you on your birthday and things like that. And so how do we keep that intact? So every single time a customer comes for a mobile order, we’re actually handing you your drink. And our broistas are just really great at figuring out, well, do you want that drink quickly or do you want to have a conversation? And so we still continue to have that very high level of service with Mobile Order because every beverage is being handed to a customer.

David Tarantino, Restaurant and Coffee Analyst, Baird: Food is another way you could grow the morning daypart or maybe all of your dayparts. If you would, please give us an update on what what you’re seeing in the pilot and sort of how you think about the potential rollout of a broader food offering.

Christine Barone, President and CEO, Dutch Bros: Yeah. So on our q one call, we shared that we had moved from an eight store pilot to a 32 shop pilot. And that really allows us to test a number of things that we’re trying to look at. So from a strategic standpoint, we’re trying to do a couple of things. One, we do believe that there is a part of that morning day part that is really important to have food and specifically warmed food and eggs in that in that morning day part.

The second thing we’re testing is trying to make sure that we we never wanna slow down our throughput or our lines. So ensuring that the cycle time of the food actually fits below the cycle time of the beverage. And as we’re testing, we’re also testing something that’s quite simple. We have four food SKUs across our shops today. There are some franchisees who have some unique programs.

But for the most part, we have four four SKUs, which are three muffin tops and a granola bar. The test that we’re doing is moving that to eight SKUs. So just going from four to eight. And what we’re adding is four hot hot food items. So two sliders, a chorizo wrap, and a Dutch waffle.

David Tarantino, Restaurant and Coffee Analyst, Baird: And I guess any insights on the pilot in terms of your confidence in being able to roll this out as you get towards I think the target was to roll it out maybe towards the end of this year and into next year. Guess any update on that?

Christine Barone, President and CEO, Dutch Bros: Yes. So we haven’t really shared where we are from a rollout schedule. Think very similar to mobile order. It is our goal first to learn, ensure that we could be really successful with this in our environment before we kind of land on what a rollout schedule might might look like. And and haven’t haven’t shared updates, but I think we are obviously looking for some financial metrics as we roll this out.

We will be bringing in equipment to the shops, so want to make sure that that works. And most importantly, for how our breweries just feel about it.

David Tarantino, Restaurant and Coffee Analyst, Baird: Great. Look forward to hearing more about that. On another topic you’ve talked about is throughput. And I’m just wondering if you could give us an update on where you are in that journey. I think there were some metrics shared at the Investor Day about trying to get, you know, speed up to a certain level.

So perhaps you can give us an update on that.

Christine Barone, President and CEO, Dutch Bros: Yeah. And so from a throughput perspective, I would say like many other things, we’re kind of at that blocking and tackling level. So making sure that our labor deployment is right on, that we’re we are matching kind of demand where it is. We’re also have rolled out a speed dashboard. So we’re very focused on looking at our peak hour within every shop and giving visibility to what that peak hour looks like and then ways that we can help drive drive the speed during that peak hour.

We’re also still working on a pilot test where we’re looking at different deployment pieces and where are typically the bottlenecks that happen and how can we better deploy our teams or when is the right time to send someone who’s in production out to be a runner and how do we how do we do all of those interactions. So we have started a pilot test with that as well.

David Tarantino, Restaurant and Coffee Analyst, Baird: Got it. And and maybe I’ll segue to a different topic on margins. I think the 2025 outlook has embedded quite a bit of coffee inflation in that. So and yet you’re still getting towards the margins that you expect longer term. So I guess how do you think about sort of the margin structure when eventually coffee costs should come down and how do you manage that?

Do you let it flow back into the P and L? Or are there offsets that you consider making as that tailwind emerges?

Josh Genser, CFO, Dutch Bros: Yes. So I mean we are expecting, as we shared, we are expecting about 110 basis points of COGS margin pressure this year just given elevated coffee costs and now the impact of what we’re expecting for tariffs on those coffee imports as well. So certainly, that and that is just for clarity, too, we clarified on Q1 is we have priced in the majority of our need for 2025. So we have pretty good line of sight to what that impact will be this year now. Certainly, if this is transitory and comes down, certainly, that would be something we benefit from in future years.

It’s one that’s still very volatile and moving around quite a bit, so certainly not one we’re providing a specific pinpoint of what that could look like over the time. But as we think about broader margin leverage, so as we’ve shared in our long term growth algorithm is we would be targeting that 30% level SHOP contribution margin, really driving any of leverage that we’d otherwise get on comp strength into back into our people so that we’re really creating those compelling features that Christine talked about for our broastas. And that could be in the form of compensation, could be in the form of hours and making sure we have a great work environment for our team.

David Tarantino, Restaurant and Coffee Analyst, Baird: Great. At the enterprise level, you have a big opportunity to leverage your G and A. So I guess, do you have a sort of G and A ratio in mind as you get to scale in terms of where you think the business can eventually get to?

Josh Genser, CFO, Dutch Bros: Yes. Still haven’t shared a specific G and A long term target. What I would say is with that revenue growth, and I should make sure we’re clear, 20% revenue growth, the we would expect that we can drive leverage in G and A. We are anticipating about 90 basis points of leverage in G and A this year and would expect that we can continue driving leverage. We do have a lot of the foundational kind of elements set in our G and A structure.

We’ll, of course, scale elements of our support structure as the business grows. So think of marketing, think of our field leadership, certainly in construction and development as well as we continue to open more shops. But we do see an opportunity to meaningfully continue leveraging G and A.

David Tarantino, Restaurant and Coffee Analyst, Baird: Got it. I guess maybe one other way to ask this and maybe you don’t want to comment. But as you get to 7,000 units, a lot of scaled company operated businesses have G and A ratios in the single digits. Is that is there any reason why Dutch Bros couldn’t achieve that at 7,000 plus locations?

Josh Genser, CFO, Dutch Bros: Yes. I think certainly we look at a lot of other peers and how they operate and have targets that we’ll be going after. But we haven’t shared a specific number that we’re going after for

David Tarantino, Restaurant and Coffee Analyst, Baird: ourselves. Fair enough. You’re turning cash flow free cash flow positive, I think, next year. So I guess, can you just maybe talk about your capital allocation philosophy once you’re at free cash flow positive? Are you how do you plan to use the excess cash?

Josh Genser, CFO, Dutch Bros: Yes. I mean, certainly, we’re using it for our continued CHOP growth. So that’s a primary use of our cash. We have shared in overall cash issues. We have tax obligations that will, in the shorter term, consume some of that free cash.

We do have debt on the balance sheet that we’d consider paying back at some point as well. So lots of opportunity, lots of flexibility. I think our biggest focus right now is continuing to grow and open new shops and take advantage of that investment.

David Tarantino, Restaurant and Coffee Analyst, Baird: Makes sense. Well, with that, we’re out of time. So please join me in thanking Christine and Josh for being here. Thank you. Thanks, Amy.

We’ll be the team will be available in a breakout session right down the hall here in the Astro Room in a few minutes. Thanks, everybody.

Christine Barone, President and CEO, Dutch Bros: Thank you. Awesome. Thanks so much.

David Tarantino, Restaurant and Coffee Analyst, Baird: Thank you.

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