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Starbucks Corp. is celebrating its 50th anniversary, and even after so many decades Kalinowski Equity Research says the company can learn a thing or two from newly public Dutch Bros. Inc.
“What struck us in particular is that Dutch Bros. Coffee generates about 24%
of its sales via energy drinks,” wrote Mark Kalinowski in a note published Wednesday.
Kalinowski highlights energy drinks’ appeal to younger consumers and the fact that it is a growing category.
Dutch Bros.
BROS,
which began trading on Sept. 15, is known not just for its drive-through coffee, but for its Blue Rebel drinks, which the company says are a driver for afternoon traffic.
Dutch Bros. net income in 2020 totaled $5.73 million, down from $28.39 million in 2019. Revenue rose to $327.4 million from $238.4 million.
Dutch Bros. was trading Wednesday at about $44.79, nearly double the IPO issue price of $23.
Dutch Bros. was the “third-largest coffee concept in the U.S. last year” behind Starbucks
SBUX,
and Dunkin’ Brands, Kalinowski said. Kalinowski said Starbucks’ full-year 2020 U.S. system sales were about $18.5 billion, Dunkin’s was about $8.8 billion, and Dutch Bros. was at $687 million.
Starbucks offers beverages like its Refreshers and Doubleshot espresso drinks in a can. But Kalinowski suspects that its energy business lags far behind Dutch Bros.
“In fact, it would not surprise us at all if the sales mix for energy drinks at Starbucks is less than 10%,” the note reads.
“We believe the Starbucks brand equates to much more than just ‘coffee’ in consumers’ minds, and see no structural reason why Starbucks couldn’t sell more energy drinks in its stores — and potentially, with much of those sales incremental.”
Starbucks is celebrating its 50th anniversary, and National Coffee Day, by offering customers with an empty, reusable 20-ounce cup a free Pike Place roast.
Starbucks shares are up 4.6% for the year to date while the S&P 500 index
SPX,
has gained 16.1% for the period.
