Coffee Companies Perk up at Opportunity to Break Big on Public Market Following Dutch Bros.’ IPO Success

Dutch Bros.

Coffee companies have seen Dutch Bros.’ success on the public market, and they are taking note. Seven weeks after the drive-thru coffee chain went public via initial public offering (IPO), a rousing success by most accounts, Black Rifle Coffee Company (BRCC), a coffee company focused on military veterans, announced on Tuesday (Nov. 2) that it plans to go public via a special-purpose acquisition company (SPAC) in a roughly $1.7 billion deal that is expected to close in the first quarter of 2022.

In addition to the company’s own-brand physical coffee shops and its placement in retail stores, BRCC also runs a direct-to-consumer (D2C) eCommerce business, selling its coffee for one-time purchase as well as by monthly subscription. Also included in this D2C online shop is BRCC- and military-themed apparel and gear. The company states that this online shop has been growing at a 218% CAGR since it began.

Overall, the company is emphasizing its omnichannel efforts, touting sales opportunities online and in physical spaces as well as its quickly growing wholesale business.

Certainly, Dutch Bros.’ instant popularity with investors could be encouraging other emerging coffee brands to try their luck on the public market. The drive-thru coffee chain’s stock prices rose almost 60% on the first day of trading and an additional 30% on its second. The price has continued to trend upwards in the weeks since the IPO.

In some ways, BRCC’s model resembles that of Nestlé-owned Blue Bottle Coffee. While the former appeals to a militaristic customer base with firearm-themed branding and the latter targets a more coastal crowd, aiming to project an aura of culinary authority, both emphasize an omnichannel approach that includes a subscription service, a D2C eCommerce storefront and company-owned coffee shops. Aditi Jain, senior director of global eCommerce for Blue Bottle, spoke with PYMNTS about the importance of emphasizing accessibility.

“It’s all about, how do we create this unified experience across our cafes, mobile and online to truly meet guests where they are — whether they are at home, or just in a cafe to pick up their mobile order, or they want to engage in a cafe and sit down and have a cup of coffee,” Jain explained. “So, I think for us, it’s not either/or. It’s this unified experience.”

Read more: Nestle’s Blue Bottle Coffee Caffeinates D2C Subscription Model

The ripples of Dutch Bros.’ IPO success can be seen around the world. In October, Bloomberg reported that Manner Coffee, a Chinese coffee chain based in Shanghai, is considering going public via IPO in Hong Kong, looking to raise at least $300 million.

Coffee shops have been faring well in recent months. Starbucks announced on Thursday (Oct. 28) that its global comparable store sales increased 17% in the quarter that ended Oct. 3 and increased 22% in North America. Restaurant Brands International (RBI) announced last week (Oct. 25) that Tim Horton’s comparable sales were up 9% in the third quarter. Coca-Cola announced on Wednesday (Oct. 27) that its coffee category grew 19%, “primarily driven” by the reopening of its Costa coffee shops in the United Kingdom.