Dutch Bros Coffee, which has over 1,140 locations in the U.S., reportedly serves 90% of its drinks cold, reported The Wall Street Journal. Iced is how young people like their beverages, Dutch Bros chain executives said.
Dutch Bros is now the third-largest coffee chain by U.S. sales and locations, behind Starbucks and Dunkin’, according to market-research firm Technomic. “Gen Z has flocked to Dutch Bros for its eye-popping energy drinks and other cold beverages that people can customize, like an OG Gummy Bear Lemonade and the Shark Attack Rebel, with layers of green, red and yellow fruit flavors—and 111 grams of sugar for an iced large,” WSJ wrote.
Customized energy drinks account for roughly 25% of Dutch Bros’ $1.6 billion business, according to WSJ. Starbucks has taken note—in January, it announced it would introduce its own customizable energy drinks.
“I see [Dutch Bros] as the creators of customizable, made-to-order energy. It evolved from guests coming and wanting to add flavors to energy drinks. Over time, we’ve built our own proprietary energy-drink brand, Rebel. We flavor it, we let you add whatever toppings you want. The energy market is growing at a faster rate than coffee,” said Dutch Bros’ Chief Marketing Officer Tana Davila.
“It’s been central to the brand from the very beginning. With our coffee, energy, lemonade, tea and sodas, you can basically build whatever you want. It’s 40-plus flavors and you can mix and match them and build your own custom creations,” Davila added.
Davila also acknowledged that the QSR does most of its business in the afternoon and later in the day, and is now attempting to win the morning daypart. The company plans to offer breakfast across its stores this year.
“One of our opportunities is to drive that habitual routine. We asked loyalty customers what else they wanted, and ordering ahead was the No. 1 thing they requested. They didn’t know if they could get in and out on their morning commute, it wasn’t predictable enough for them, and they didn’t have time to wait in the long line. … We want to provide a different way for people to use the brand. You have to be a loyalty member to order ahead, so it serves in the broader loyalty strategy. Right now, it’s about 14% of orders,” she said.
Dutch Bros has plans to operate 2,000 stores by 2029, and has been looking at new markets to reach the milestone.
“In 2024, cold dispensed beverages was the only category to outpace the NACS generated convenience foodservice CPI of 7.8%,” said Emma Tainter, research analyst and writer for NACS. “Gross margins decreased year over year, but the category still managed a high margin of 51.38%.”
Read more about cold dispensed beverages in the NACS Magazine March 2026 feature “Coming Inside for the Cold Beverages.”