And Here's Another Reason to Buy Dutch Bros Stock

Dutch Bros Coffee (NYSE: BROS) has been a standout performer in the fast-growing coffee and beverage sector, driven by aggressive expansion and a fiercely loyal customer base. But as the company prepares to release its Q1 2025 results, investors have an additional catalyst to consider: its entry into the consumer packaged goods (CPG) market, which could unlock new revenue streams and accelerate growth beyond its drive-thru dominance.

Financial Momentum Fuels Confidence

Dutch Bros has consistently delivered on its growth targets. In early 2025, the company reported 4.6% same-store sales growth year-over-year through March 24, driven by higher average ticket prices and steady transaction volumes. This follows a strong 2024, where revenue surged to $1.28 billion (+32% YoY), with net income jumping to $66.5 million from just $10 million in 2023.

The company’s expansion machine remains in overdrive. As of December 31, 2024, it operated 982 locations across 18 states, up from 876 a year earlier. Management aims to open 250 new shops annually through 2029, targeting 2,029 stores by the end of 2029 and eventually 7,000+ locations nationwide. This aggressive rollout, supported by a “people-first” culture and operational efficiencies, positions Dutch Bros to capitalize on its $1.5 trillion TAM in the U.S. beverage market.

The CPG Play: A New Growth Lever

While Dutch Bros’ core drive-thru model is its bread and butter, its partnership with Trilliant Food & Nutrition to launch a line of packaged coffee products (e.g., roast-and-ground, K-Cups, and ready-to-drink formats) adds a critical new dimension. Slated for a 2026 launch, this initiative could diversify revenue and expand brand reach into grocery stores, where Trilliant already has distribution in over 50,000 locations.

Importantly, the CPG line aligns with Dutch Bros’ philanthropy goals, with proceeds funding its foundation. While the partnership won’t impact 2025 sales, it represents a long-term strategic shift that could elevate the company’s valuation. Analysts at JPMorgan and Morgan Stanley have already highlighted this move as a key driver for future growth, with price targets as high as $89 per share.

Analysts Are Bullish, but Risks Linger

The analyst community remains overwhelmingly bullish on Dutch Bros. As of April 2025, 14 out of 16 analysts rated the stock a “Buy” or “Overweight”, with a consensus price target of $76.57—a 20% upside from its April 25 closing price of $63.45. Morgan Stanley and JPMorgan recently raised their price targets to $80, citing strong same-store sales and the CPG opportunity.

However, risks persist. Dutch Bros’ high beta (2.71) signals volatility, and its debt-to-equity ratio of 0.77 could constrain flexibility if commodity costs (e.g., coffee beans, dairy) spike. Additionally, insider sales totaling $201.5 million in early 2025 have raised some eyebrows, though insiders still own 42.4% of the company.

Why Now Is the Time to Buy

Despite these headwinds, Dutch Bros’ fundamentals remain compelling. Its low 120-second average order time, 50% loyalty-program-driven sales, and mid-teens annual store openings create a moat against competitors. The CPG partnership adds a new layer of growth potential, while its adjusted EBITDA margin targets (20%+) suggest profitability will keep pace with expansion.

With its Q1 2025 earnings call on May 7 expected to reaffirm these trends—and analysts projecting $343.30 million in revenue—now is an opportune time to position for the long term. The stock’s 179.8 P/E ratio reflects aggressive growth expectations, but with a $9.4 billion market cap, Dutch Bros still has room to scale.

Conclusion: A Brewing Opportunity

Dutch Bros’ combination of rapid store growth, operational excellence, and the upcoming CPG pivot makes it a compelling investment. Even with risks like inflation and insider selling, the company’s $2 billion revenue target by 2025 and 2,029-store milestone by 2029 are achievable given its execution track record. For growth-oriented investors willing to look past short-term volatility, Dutch Bros offers a rare blend of near-term catalysts and long-term scalability—making it a stock to watch closely in 2025 and beyond.

Final Verdict: Buy Dutch Bros stock for its dual engines of drive-thru expansion and CPG diversification. The upcoming earnings call and 2026 product launch could supercharge this already compelling story.