Dutch Bros is staying cold to attract Gen Z. While Starbucks still owns nearly half of U.S. coffee chain sales, Dutch Bros is now coming in third (behind Dunkin’), despite the fact that staples like hot coffee are hardly a focus. Instead, they’re capitalizing because of young people’s affinity for iced drinks whether it’s iced coffee or customizable energy drinks—the latter of which is so popular that Starbucks and McDonald’s are taking a page from this book. Plus, customers are coming more in the afternoon than for their morning buzz, something other chains aren’t winning at. They’re also succeeding with customization being the central appeal, encouraging endless combinations. (No secret menu needed.) But with all the add-ins to track, ordering can take a while. The brand is now encouraging loyalty by offering order ahead only to members—pair that with some quirky merch, and they’ve got Gen Z’s attention. (WSJ)
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