How Dutch Bros. grew from a pushcart in Grants Pass to a $150M mainstay

How Dutch Bros. grew from a pushcart in Grants Pass to a $150M mainstay

Travis Boersma walked onto the stage at the Sentinel Hotel wearing a T-shirt, baseball cap turned backwards and flip-flops.

It’s not uncommon for guests of the Portland Business Journal’s Power Breakfast series to appear casually dressed, but most visiting executives take the hot seat in traditional business attire.

It turns out Travis Boersma’s version of a power suit conveys exactly the right message about Dutch Bros. Coffee, the $150 million coffee empire he formed with his late brother, Dane, in Grants Pass in 1992: comfortable, engaging, accessible and low-key.

Travis was 21 and Dane was 38 when the brothers decided the coffee business would be their next career. The family’s dairy farm was struggling, a casualty of rough times in the late 1980s and early 1990s. Neither knew the first thing about the coffee industry and the brothers were at distinctly different places in their lives.

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At 21, Travis wasn’t too focused on the future. Failure was an acceptable option. But 38-year-old Dane was married with three children. He talked of taking a job with Fred Meyer or Walmart to support his family.

In spite of their 17-year age difference, the Boersma brothers were incredibly close.

They’d dreamed together of taking over the family dairy and stocking it with high-end livestock. They strategized over the best way to increase milk yields. They thought about launching their own ice cream.

When that didn’t pan out, their entrepreneurial conversations took a different turn. It helped that Dane had some money stashed aside from a Dairy Queen franchise he’d owned in his 20s.

Travis suggested a coffee cart to sell espresso. Dane didn’t know what espresso was so he ordered a shot at a local Italian restaurant.

He frowned as he sipped at the strong, dark brew served in an elf-like cup.

“Nobody’s going to buy that s---, dude,” he told his brother.

Undaunted, Travis took him to a drive-in coffee stand operated by a friend down the highway. He ordered a couple of vanilla lattes. When he saw Dane licking vanilla-flavored foam off the lid, he knew he was hooked.

Dane was diagnosed with Lou Gehrig’s disease in 2005, about a year after he began exhibiting symptoms of something amiss. He died in 2009 after becoming bedridden and unable to communicate. But at Thursday's breakfast, Travis was clear that Dane's influence lives on. The company’s quirky, often unbelievable rise from two-man pushcart in downtown Grants Pass to seven-state coffee empire is a tribute to his bold thinking and commitment to studying business practices. The company and its operators employ more than 1,700 people and generate more than $1 million annually for charitable causes.

Travis said his brother was a prodigious reader who devoured business books. He wrote the company’s franchise agreements after reading up on franchise law — it helped that he’d been a Dairy Queen franchisee in his early days.

Even when his health was failing and he was no longer able to communicate, Dane lit up when Travis told him he was fulfilling a long-held wish to attend a Tony Robbins seminar.

Dutch Bros. began small, but Dane Boersma’s vision was always on the long-term. It was still a one-cart operation when he announced the brothers would follow the Tony Robbins recommendation to develop ambitious 1- 3-, 5-, 10-, 15- and 20-year plans for their personal and professional lives. They did.

Nearly 25 years later, Travis Boersma says he’s achieved most of the goals he laid out, with one notable exception. “I never became a helicopter pilot."

Travis attributes the company’s success to his brother’s commitment to taking bold steps, recognizing mistakes and adapting when needed. Indeed, the company’s first location on a site by the Grants Pass post office wasn’t the first choice.

The Boersmas wanted to launch at the local Fred Meyer store. They opted for Plan B when the approval process took longer than they expected. The downtown location was an immediate hit. The brothers were thrilled.

“Some things work out the way they’re supposed to,” he said.

Two developments transformed Dutch Bros. from cart operator to regional powerhouse.

It carved out a niche in the drive-through market — its stores are typically trailer-sized outlets with drive-through as well as walk-up windows.

Second, it found that it could retain its focus on culture by awarding franchises only to current employees. Dutch Bros. doesn’t sell franchises — the only way to become a franchisee is to work for the company and demonstrate a commitment to its culture and operations.

“The first thing I look for is character and integrity,” Travis said.

Dutch Bros. honors the late co-founder with its annual “Drink One for Dane” event, which dedicates proceeds to the Muscular Dystrophy Association, a leader in fighting Lou Gehrig’s disease. The campaign has raised more than $900,000 for MDA since 2007.

Individual store owners routinely raise funds to support medical causes on their own as well.