Dutch Bros and CAVA: A Tale of Two Growth Stories

Dutch Bros and CAVA are fast-casual upstarts with different growth strategies. Dutch Bros is focusing on drive-thru convenience, digital engagement, and menu innovation, while CAVA is executing a disciplined, operations-led growth strategy anchored in strong unit economics and menu consistency. Dutch Bros is accelerating expansion with impressive shop productivity and deepening loyalty engagement, while CAVA is opening new restaurants and planning 100 new units in 2025. Both companies face challenges, with Dutch Bros facing rising occupancy and preopening costs, and CAVA facing labor scheduling issues during peak hours.

Dutch Bros Inc. (BROS) and CAVA Group are two fast-casual upstarts with distinct growth strategies and financial performances. Dutch Bros is focusing on drive-thru convenience, digital engagement, and menu innovation to drive its expansion. Meanwhile, CAVA is executing a disciplined, operations-led growth strategy anchored in strong unit economics and menu consistency.

In the second quarter of 2025, Dutch Bros reported adjusted EBITDA of $89 million, representing a 37% year-over-year increase and a meaningful outperformance relative to 28% revenue growth, according to a Nasdaq article. The company's shop contribution margins reached 31.1%, up 30 basis points (bps) from the prior year, supported by dairy cost relief and a 60-bps reduction in labor expenses as a percentage of revenues. Despite near-term input cost headwinds, Dutch Bros framed its margin trajectory as structurally improving, with a focus on labor efficiency, supply-chain optimization, and capital-light development.

CAVA Group, on the other hand, has faced challenges with labor scheduling issues during peak hours and is currently down 46% year-to-date, according to a Yahoo Finance article. However, CAVA is planning to open 100 new units in 2025, indicating its commitment to expansion. The company's valuation score is currently 0 out of 6, suggesting it may not be undervalued according to traditional valuation metrics. A Discounted Cash Flow (DCF) analysis concluded that CAVA Group may be overvalued by 96.2%, while its Price-to-Earnings (PE) ratio stands at 51.2x, notably higher than the industry average.

Both companies face challenges, with Dutch Bros facing rising occupancy and preopening costs, and CAVA facing labor scheduling issues. Despite these challenges, Dutch Bros guided to third-quarter shop contribution margins of roughly 28.5%, implying modest sequential compression as commodity benefits wane. CAVA Group, however, has a long-term narrative anchored in its expansion plans and technology investments.