One of the nation's fastest-growing drive-through coffee chains that also features a variety of wild and sugary drinks is expanding into Chattanooga with a new outpost near Northgate Mall.
Dutch Bros Coffee, which operates more than 750 units in 14 states, is building its newest storefront at 5102 Hixson Pike and is looking at adding other units in the Chattanooga market, according to officials with the Grants Pass, Oregon-based company.
When it opens this fall, Dutch Bros will join more than a half dozen other national and local coffee retailers with drive-through locations in the market as Chattanooga continues to brew up more coffee options.
"We're so excited to join the Chattanooga community and can't wait to show everyone what Dutch Bros is all about," company spokesperson Madison Fahey said in an email statement Friday.
Dutch Bros is popular for coffee and tea concoctions like chocolate crunch cold brew coffee, which comes with Oreo cookie crumbles, and Palm Beach tea, which is flavored with pomegranate and peach syrups. The company also serves beverages with its proprietary energy drink, Rebel. Orders are taken by attendants who come up to car windows.
Dutch Bros particularly appeals to the under-35 age group with its Instagram list of energy drinks that the younger generation puts on their feeds, Sharon Zackfia, an analyst for William Blair Equity, said in a research note.
Dutch Bros Coffee started as a pushcart business in 1992 in Grants Pass, Oregon, just north of the California-Oregon border. The two brothers who founded it, Dane and Travis Boersma, are of Dutch descent and grew the company throughout the United States until its initial stock offering in 2021.
The company expects to add at least 150 new units this year and generate about $1 billion in company revenues in fiscal 2023, according to company financial filings. While Dutch Bros remains only a fraction of the size of Starbucks with its more than 40,000 locations, Dutch Bros has more than doubled its number of locations in the past five years and has set a goal of having 4,000 stores in the next 1o to 15 years.
Dutch Bros already has shops in Oak Ridge, Maryville and Murfreesboro in Tennessee.
Christine Barone, the president of Dutch Bros who will become CEO of the company in January, said the company's brands and people are fueling its growth and appeal.
"We have incredible people systems and a rock-solid brand, two of the hardest foundational elements to replicate, which gives me confidence in our competitive positioning," Barone told analysts during the company's second quarter earnings call. "The team has worked diligently over the course of more than 30 years to build a one-of-a-kind culture that radiates through our front line and is the key enabler of our success."
The new Chattanooga unit, which will be managed by Destiny Musgrave, is being built on an out parcel in front of the former Crazy Buffet hibachi grill buffet-style, which opened in 2018 and shut down within a couple of years after its opening. The 10,994-square-foot restaurant building that housed the Crazy Buffet was originally a Ryan's Steakhouse restaurant and is now being remodeled to consolidate and expand the offices for the Hitchcock Family Medicine practice.
The new Dutch Bros unit will be the third new drive-through coffee and drink outlet to open in Hixson in the past year.
The Arkansas-based 7 Brew expanded into the Chattanooga market this spring with a drive-through unit in the Northtowne Square shopping center on Highway 153, just a mile away from the new Dutch Bros. Last December, Starbucks opened a new store on Highway 153 — one of at least 15 Starbucks storefronts in Hamilton County.
Two years ago, Scooter's also entered the Chattanooga market with plans to eventually build up to 15 of its drive-through coffee stands.
Last fall, a Valdosta, Georgia, coffee chain known as Red Owl Coffee expanded into the Chattanooga market with its first local drive-through coffee kiosk in East Brainerd. Red Owl, which is relocating much of its operations to Chattanooga, is planning at least four area outlets.
Three local coffee chains also have been started in the past five years and continue to add more storefronts.
Be Caffeinated, a chain of drive-through coffee shops launched in 2018 in Red Bank, has grown to include four drive-through units. Sleepyhead Coffee, which started in 2019 as a coffee cart, is expanding its storefront in the downtown James Building. In December, a Montreal bagel shop known as Honey Seed opened on South Market Street.