BROS' Order Ahead Gains Steam: Will It Drive Morning Daypart Growth?

Dutch Bros Inc. BROS is gaining momentum with its Order Ahead initiative, a digital convenience strategy that appears to be resonating with customers, particularly in the competitive morning daypart. The feature accounted for 11% of total transactions in the first quarter of fiscal 2025, marking a sequential increase of 300 basis points and highlighting early customer adoption.

The initiative is particularly effective in new markets, where Order Ahead penetration is nearly twice the system average. This aligns with Dutch Bros’ broader strategy to increase frequency, remove operational friction and strengthen loyalty, especially in high-traffic windows. Historically, traffic has been evenly distributed across morning, midday and afternoon. However, Order Ahead is beginning to shift that dynamic by increasing engagement in the morning hours, when consumers are most time-constrained.

Management emphasized that the program is not only boosting convenience but also preserving the brand’s hallmark “broista” experience. From a back-end standpoint, Order Ahead is contributing to improved throughput by better utilizing the walk-up window and balancing production zones. The company is also piloting real-time speed dashboards and shop-level deployment strategies aimed at streamlining operations.

This digital push comes at a time when Dutch Bros is simultaneously scaling other foundational initiatives — including innovation in limited-time offerings, targeted paid media in new markets and deeper engagement through its Dutch Rewards loyalty program. As the company continues to grow its store base — targeting 2,029 units by 2029 — it has a runway to further integrate digital and operational enhancements across the portfolio and drive growth.

How It Stacks Up to Other Industry Players

Starbucks Corporation SBUX is executing a more expansive digital turnaround through its “Back to Starbucks” plan, which integrates mobile order optimization, labor scheduling algorithms and digital menu boards to win peak traffic periods. The company recently began rolling out a new service model to 2,000 U.S. locations aimed at reducing wait times and improving the order experience, including a scheduling algorithm that cuts average café wait times by up to two minutes. Starbucks plans to enhance its app by allowing customers to schedule mobile pickup and view real-time pricing, which could improve conversion during peak hours.

Meanwhile, Sweetgreen, Inc. SG is ramping up its tech stack with Infinite Kitchen formats that boost throughput and consistency, and is reporting stronger digital engagement concerning the same. The company is reporting solid feedback concerning its new loyalty program, SG Rewards. Infinite Kitchen units are also driving higher native digital sales and outperforming on margins. Sweetgreen is investing in AI-powered workforce management and personalized CRM to better align labor deployment with traffic and deepen customer relationships.

Compared to Starbucks' scale and Sweetgreen’s automation-centric formats, Dutch Bros is earlier in its digital maturity but is rapidly closing the gap. Its emphasis on balancing operational gains with brand personality gives it a distinct position in the digital race.

BROS’ Price Performance, Valuation & Estimates

Shares of Dutch Bros have gained 2.4% in the past three months against the industry’s fall of 2.8%.

BROS Three-Month Price Performance

From a valuation standpoint, Dutch Bros trades at a forward price-to-sales ratio of 6.57X, above the industry’s average of 4.04X.

The Zacks Consensus Estimate for BROS’ fiscal 2025 and 2026 earnings per share (EPS) implies a year-over-year uptick of 24.5% and 33.7%, respectively. The EPS estimates for fiscal 2025 and 2026 have remained unchanged in the past 30 days.

Dutch Bros stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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