Coffee Chains Add Major Expansion To The Menu
Oregon-based Dutch Bros is on track to serve up 150 new stores this year, one of the many coffee chains brewing aggressive expansion plans in the U.S.
Dutch Bros was the fastest-growing U.S. coffee chain last year, expanding 28%, according to World Coffee Portal. This year, it opened 39 stores, bringing its footprint to 800 locations across 16 states, a 23% year-over-year increase. More growth is percolating: The coffee chain plans to open 4,000 stores by 2034.
Scooter's Coffee is on its way to taking the fastest-growing title this year, with plans to add 200 locations to its 600 stores by the end of 2023 as part of its mission to hit the 1,000 mark by 2025.
Biggby Coffee is following suit with aggressive expansion plans of its own to reach 1,000 locations by 2028. Biggby has 371 stores and 153 on the way, including 97 new openings in 2023, Restaurant Dive reported. Part of its growth is attributed to flexible store models, including kiosks, modular units and drive-thrus.
Caribou Coffee, the third-largest coffee chain in the U.S., is planning to double its 470-store footprint by 2030. Franchising is a major part of that growth. Prior to starting its franchise program in 2021, the company was opening fewer than 25 stores a year. Now 300 franchised locations are expected to open within the next seven years.
Drive-thrus are a focus of coffee store growth. Caribou reported that 90% of its customers prefer getting coffee from a drive-thru. Dutch Bros and Scooter's Coffee have carved drive-thru locations into their growth plans, and Starbucks said in 2022 that 90% of its new stores would have a drive-thru, which allowed it to accelerate growth. Starbucks is planning for 4% net new store growth annually by 2025.
Consumer demand for branded coffee shops has grown exponentially over the last 12 months, expanding their market value by 8% to $49.5B, which is 104% of their pre-pandemic value, according to World Coffee Portal. There are more than 40,000 coffee shops in the U.S., and the sector is expected to add another 5,200 by 2028, with a compound annual growth rate of 2.5%.
