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Stock Analyst Note

A difficult macro backdrop hasn’t dulled consumers' quest for cold, customizable caffeine, and Dutch Bros' drive-thru model has reaped the benefits, with system sales surging 26% on average over the past six years. However, fat margins and lofty demand have lured formidable competitors.
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We don’t see a lasting competitive advantage for Dutch Bros, which we believe lacks the scale and brand cachet to withstand intensifying competition in beverages. Emerging and established brands are racing to capitalize on consumers’ penchant for convenient, customizable beverages with alluring margins, which could crimp Dutch Bros' fast-paced growth.

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