As coffee prices hit record highs and consumers tighten belts, sales of on-the-go coffee could take a hit. That may be one reason behind the decision by drive-thru coffee chain Dutch Bros (BROS) to launch its own brand of packaged beverages for the retail market for drinking at home.
Dutch Bros today announced plans to launch a line of Dutch Bros packaged coffee and related products to be sold in retail outlets in partnership with Trilliant Food & Nutrition. Trilliant specializes in single-serve cup and ready-to-drink coffee and has products available in more than 50,000 retail stores across the country. The company is behind the Victor Allen coffee pods and Nurri protein shakes brands.
It’s the latest move in a succession of fast-food and dine-out brands launching products for at-home consumption. It also reflects a growing market for speciality coffee at home, particularly as work-from-home arrangements during the pandemic have persisted, albeit the most recent trends are shifting once more. Coffee consumption outside the home reached its highest level since before the pandemic, according to the latest edition of the United States National Coffee Association‘s biannual consumer trends report. But rising prices of coffee and declining consumer sentiment could send this into reverse once more.
Diversification is one element, but it’s also about getting the brand in front of more people, which can support engagement with the core business. Dutch Bros CEO Christine Barone said the move into the consumer packaged goods market will enable the company to reach its customers more often by offering an at-home range. “We believe this offering will build brand awareness, especially in newer markets by providing exposure to new potential customers,” she added.
BROS also anticipates entry into the CPG market will allow it to further its commitment to giving back by helping to fund its philanthropic efforts. “A portion of the proceeds from the CPG business will be donated to the Dutch Bros Foundation to help support compelling futures for those in the communities we serve,” added Barone.
Is BROS a Good Buy?
On Wall Street, BROS has a Strong Buy rating based on 11 Buys and one Sell. The average BROS price target of $82.55 implies about 21% upside.
