Coffee and other specialty beverages are as popular as they’ve ever been, but expectations about how they should be sold are changing.
Consumers are increasingly looking for a more personal, authentic experience with the companies they do business with.
Although this stock hasn’t made any net progress in nearly a year, that only adds to the potential upside.
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Got some idle cash you’re looking to put to work for a while, but aren’t interested in any of the market’s many crowded trades right now? If so, you’re not alone.
Fortunately, you’ve got options. If you’re willing to look a bit off the beaten path at some lesser-known prospects, you’ll find plenty of opportunity at a price that makes sense.
And one of these more compelling prospects at this time is a fast-growing coffee and premium beverage chain called Dutch Bros(NYSE: BROS).
Image source: Getty Images.
Comparisons to prepared coffee powerhouse Starbucks(NASDAQ: SBUX) are almost required here, but not because Dutch Bros is so similar to the industry’s titan. Rather, it’s simply the best way to highlight what makes the up-and-comer so different from its well-established rival.
See, whereas Starbucks offers a sit-down coffee experience, Dutch Bros only operates drive-thru kiosks. Starbucks has also spent the past few decades perfecting a posh and polished uniform delivery of its service and product, while Dutch Bros’ employees are almost strangely casual.
And Dutch Bros is just a lot smaller, with only 1,081 locations as of September 2025 versus Starbucks’ 40,990 (16,864 of which are in the United States alone). For perspective, that’s more U.S. stores than fast-food restaurant chain McDonald’s currently operates.
Don’t be fooled, though. Size doesn’t always translate into advantage. Indeed, Starbucks’ sheer size may only add to its disadvantage by making it more difficult to produce meaningful expansion. Starbucks shut down 107 stores during the three-month stretch ending in September, in fact, while Dutch Bros opened 38.
The thing is, this disparity ultimately reflects a much bigger sociocultural one that’s apt to persist for a long, long while. That’s consumers’ appreciation for authenticity, and their growing disinterest in the impersonal way that too many organizations — including Starbucks — operate their businesses. Interactions between Dutch Bros’ “broistas” and its customers may be personal to the point of being unusual, but it works.
That’s what the numbers say, anyway. While Starbucks’ same-store sales were flat during the third calendar quarter of last year (extending long-established weakness), Dutch Bros’ same-store sales grew 5.7% year over year, also extending an established trend.
A somewhat static snapshot of the coffee chain doesn’t necessarily tell the whole story that growth investors may be interested in hearing, though. What makes BROS stock the ultimate growth stock to buy with $1,000 right now, or for that matter, any other amount of money?
There’s more than one reason, although they’re all interrelated.
Arguably, first and foremost, the authenticity thing. It will come as no real surprise that the younger the consumer, the more they demand this authenticity, not to mention true corporate responsibility. And as the current millennials become as old as Gen X presently is, they’ll bring these expectations with them. The same goes for Gen Z as they reach millennials’ current ages, and so on.
While Starbucks had a great multi-decade run, the world’s since changed in such a way that doesn’t really favor its premise anymore. Dutch Bros’ more casual feel is the new preferred norm that a growing number of consumers will support — with dollars — well into the future.
Then there’s Dutch Bros’ bold growth plan. Until last year, its long-term target was 4,000 stores. Since then, this plan’s been upped to 7,000 stores. Either figure would take years to reach, to be clear; the company’s still targeting a total of around 2,000 shops by 2029. The fact that Dutch Bros’ current CEO (and former Starbucks executive) Christine Barone has publicly committed to such a growth plan, however, speaks volumes.
Of course, it doesn’t hurt the bullish case that analysts’ current consensus price target of $76.95 is 26% above the stock’s present price. Although this is a relatively short-term-minded target, it’s certainly not a bad way to start out a new long-term trade. Bolstering this bullishness is the fact that the vast majority of the analyst crowd covering Dutch Bros considers it a strong buy at this time.
Don’t read too much into the message. While it’s a compelling growth prospect, there’s probably a little too much risk here — and certainly too much likely volatility — to make Dutch Bros a core holding for any growth portfolio. You’ll want to find something a little more established and stable to use a pillar position, even if it means a little less upside.
If you’ve got room in your portfolio for something new but aren’t finding much else you like with the proverbial usual suspects, though, this off-the-radar growth name’s lack of net forward progress since early last year is a buying opportunity. Just don’t tarry if you’re interested. Other investors are apt to begin connecting the same dots just connected here.
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James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Starbucks. The Motley Fool recommends Dutch Bros. The Motley Fool has a disclosure policy.
The Ultimate Growth Stock to Buy With $1,000 Right Now was originally published by The Motley Fool
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