Bear Hunting Diary 20241212 Thursday Coffee addiction is hard to quit, coffee price hikes promote the competitiveness of the Dutch Brothers coffee business model, maintaining RSP.
I used to be mistaken, thinking that the Dutch Bros model of not getting off the car to buy coffee to drink had limited opportunities, and I was skeptical about the rise in Starbucks. However, with global climate change leading to the deterioration of coffee growing environments, I realized that coffee prices will irreversibly continue to rise in the next fifteen years. Drinking coffee is like smoking or drinking, difficult to give up, a lifelong consumer habit. Therefore, the Dutch Bros coffee business model is feasible.
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In recent years, the price of coffee beans in the international market has continued to rise to the highest level in 47 years. The main reasons include supply shortages caused by abnormal global climate, especially in major production countries such as Brazil and Vietnam. Brazil has suffered from severe droughts and heavy rains, affecting the output of Arabica coffee beans, while Vietnam's Robusta beans have also decreased production due to extreme weather conditions. In addition, the increase in global coffee consumption demand, tightening inventories, and speculative activities have also driven prices up.
The Dutch Bros business model demonstrates significant competitiveness in the highly competitive coffee market, mainly in the following aspects:
- **Product Positioning and Portfolio**: Dutch Bros focuses on blended coffees and cold drinks, catering to consumers' demand for premium coffee and diverse beverages, especially attracting young consumers.
- **Store Model and Strategy**: Using a DRIVE-THRU model for small stores to reduce operating costs and improve efficiency. At the same time, by adopting a "fortress" strategy to densely open stores in the region, enhancing brand influence and customer experience.
- **Culture and Community Engagement**: Dutch Bros values company culture and community interactions, cultivating a loyal customer cohort, maintaining a low employee turnover rate, thereby enhancing brand loyalty.
These factors make Dutch Bros highly competitive in the US coffee market, and they have continued to grow even during the pandemic.
Dutch Bros' expansion strategy mainly includes the following aspects:
- **Rapid Store Expansion**: The company plans to open as many as 165 new stores in 2024, aiming to reach a scale of about 4,000 stores in the next 10 to 15 years.
Global Expansion: Starting from Oregon, gradually expanding to the south and west, and planning to enter more new states.
Innovative Services: Promoting mobile ordering function to enhance customer experience and operational efficiency.
Product Diversification: Focusing on non-coffee beverages to attract a wider range of consumers.
Finally, I would like to end my journal with a quote from the Bible: "He has shown you, O mortal, what is good. And what does the LORD require of you? To act justly and to love mercy and to walk humbly with your God." (Micah 6:8) This quote reminds me to always maintain integrity and humility in both investment and life.
Sources
The Dutch Bros business model demonstrates significant competitiveness in the highly competitive coffee market, mainly in the following aspects:
- **Product Positioning and Portfolio**: Dutch Bros focuses on blended coffees and cold drinks, catering to consumers' demand for premium coffee and diverse beverages, especially attracting young consumers.
- **Store Model and Strategy**: Using a DRIVE-THRU model for small stores to reduce operating costs and improve efficiency. At the same time, by adopting a "fortress" strategy to densely open stores in the region, enhancing brand influence and customer experience.
- **Culture and Community Engagement**: Dutch Bros values company culture and community interactions, cultivating a loyal customer cohort, maintaining a low employee turnover rate, thereby enhancing brand loyalty.
These factors make Dutch Bros highly competitive in the US coffee market, and they have continued to grow even during the pandemic.
Dutch Bros' expansion strategy mainly includes the following aspects:
- **Rapid Store Expansion**: The company plans to open as many as 165 new stores in 2024, aiming to reach a scale of about 4,000 stores in the next 10 to 15 years.
Global Expansion: Starting from Oregon, gradually expanding to the south and west, and planning to enter more new states.
Innovative Services: Promoting mobile ordering function to enhance customer experience and operational efficiency.
Product Diversification: Focusing on non-coffee beverages to attract a wider range of consumers.
Finally, I would like to end my journal with a quote from the Bible: "He has shown you, O mortal, what is good. And what does the LORD require of you? To act justly and to love mercy and to walk humbly with your God." (Micah 6:8) This quote reminds me to always maintain integrity and humility in both investment and life.
Sources
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InGodITrust OP : Sources
[1] Dutch Bros stock price hits a 52-week high, reaching $43.64, strong growth - Investing.com https://cn.investing.com/news/company-news/article-93CH-2552548
[2] Dutch Bros stock price soars to a 52-week high, reaching $50.26 - Investing.com https://cn.investing.com/news/company-news/article-93CH-2571251
[3] Dutch Bros Coffee, 'Starbucks Rival' Expands Nationwide - TradesMax Stock Investment Network https://www.tradesmax.com/component/k2/item/11329-dutch-bros
[4] 5 reasons why Dutch Bros stock is a solid Buy today https://asset.org/zh-CN/5-reasons-dutch-bros-stock-is-a-solid-buy-today
[5] What is your opinion on $BROS (Dutch Bros) - moomoo Community https://www.moomoo.com/hans/community/feed/107165694296477
[6] Coffee chain Dutch Bros expected to debut on NYSE on Wednesday, receives investment from private equity fund TSG - Moomoo https://www.moomoo.com/hans/news/post/5941100/us-stock-ipo-encyclopedia-coffee-chain-dutch-bros-is-expected
[7] U.S. stock IPOs feast week! Dutch Bros Coffee surges 110% in 2 days, DICE soars 100% - Huashengtong https://www.hstong.com/news/detail/21091718273153735
[8] Unleashing Potential: Three Trends Shaping the Net Lease Retail Market - Peachtree Group https://www.peachtreegroup.com/zh/news-insights/three-trends-shaping-the-net-lease-retail-market