Coffee consumption in the United States is at an all-time high, with approximately 66% of Americans indulging in a daily cup of joe. More than 80% of coffee drinkers consume two or more cups per day, making it a lucrative market that exceeded $100 billion in the past couple of years.
Two major players in the coffee industry are Starbucks and Dutch Bros. Starbucks, a global franchise, is working on reclaiming its status as a beloved “third place” in society, separate from home and work. On the other hand, Dutch Bros is a fast-growing drive-thru chain that is aggressively expanding its market share.
Dutch Bros saw a significant increase in revenue in fiscal year 2025, with a 27.9% year-over-year growth. The company opened 154 new shops across 22 states and saw a 31.4% increase in adjusted EBITDA compared to the previous year. To attract more customers, Dutch Bros is developing a hot food menu to compete with breakfast and coffee staples like Starbucks and Dunkin’.
Despite a decline of nearly 15% in the past 12 months, Goldman Sachs upgraded Dutch Bros from neutral to buy, indicating potential growth opportunities. On the other hand, Starbucks faced challenges in the 2025 fiscal year, with a 1% decline in global comparable-store sales and a decrease in operating margin due to store closures in North America.
Starbucks CEO Brian Niccol has implemented a restructuring plan called “Back to Starbucks” to revitalize the brand and create a welcoming coffee shop experience. The company expects to see a 3% or more growth in comparable-store sales in 2026, along with a slight improvement in margins. Starbucks is also planning to open between 600 and 650 new coffeehouses globally this year.
Both Dutch Bros and Starbucks offer unique opportunities for investors. Dutch Bros is rapidly expanding and improving its financials, making it an attractive option for growth investors. On the other hand, Starbucks, with its established global presence and dividend payouts, is more suited for value investors.
Ultimately, the choice between Dutch Bros and Starbucks depends on individual investment goals. While Dutch Bros shows promise for growth, Starbucks offers stability and potential modest growth in the coming years. Investors should carefully consider their objectives before making a decision on which coffee stock to buy.
