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Will Dutch Bros' Loyalty Program Cement Its Transaction Growth Runway?

By Mrithunjoy Kaushik | October 01, 2025, 10:01 AM

Dutch Bros Inc. BROS is sharpening its focus on customer loyalty at a time when beverage category competition continues to intensify. With system same-shop sales growth expected to be approximately 4.5% in 2025, the company is increasingly relying on its Dutch Rewards program to drive engagement and sustain traffic momentum.

In the second quarter of 2025, Dutch Rewards accounted for 72% of system transactions, up five percentage points from the prior year. Management credited stronger segmentation and more personalized offers for deepening engagement across customer cohorts.

The program has also supported uptake of newer initiatives, with order ahead now representing 11.5% of transactions and a food pilot in 64 shops delivering incremental ticket and transaction lift. Both levers are gaining traction most rapidly among Rewards members, underscoring the program’s role as a catalyst for adoption.

The company is layering new functionality on top of this growing base. Enhanced dashboards are providing shop-level teams with speed and throughput metrics, while ongoing app improvements are aimed at smoothing the mobile order journey.

Management sees significant headroom in the morning daypart, where mobile ordering and food options are beginning to lift frequency. By embedding Rewards into these initiatives, Dutch Bros is positioning loyalty as a structural driver of transaction growth rather than a standalone marketing tool.

How It Stacks Up to Competitors

Starbucks Corporation SBUX represents the mature end of the loyalty spectrum, with Starbucks Rewards serving as a monetized growth driver. The company reported approximately 34 million 90-day active Rewards members in third-quarter fiscal 2025 and highlighted that nondiscounted transaction growth within this cohort remains robust, reinforcing the program’s ability to influence both frequency and average ticket. Looking ahead, Starbucks is preparing major Rewards enhancements and app upgrades slated for 2026, designed to deepen personalization and engagement. By integrating loyalty with service enhancements, Starbucks aims to translate product innovation and operational consistency into higher repeat purchases and sustained traffic gains.

Sweetgreen, Inc.’s SG recent loyalty overhaul illustrates both the promise and the near-term pain of program resets. Sweetgreen’s transition to SG Rewards weighed on performance in the second quarter, creating an estimated 250 basis point drag on same-store sales. The headwind reflected deferred revenue recognition and a temporary dip in frequency among former Sweetpass+ subscribers. Management, however, expects this impact to flip into a tailwind as active membership expands and 90-day frequency strengthens through personalized CRM-driven offers. Sweetgreen is explicitly using loyalty to broaden value perception and drive frequency while simultaneously addressing in-store execution and portioning.

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This article originally published on Zacks Investment Research (zacks.com).

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